How Gen Z Is Motivating Brands to be More Sustainable - Public Goods Blog

How Gen Z Is Motivating Brands to be More Sustainable

It seems like the “Change Generation” is making social good an essential part of doing business.

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Known as the “the first generation of true digital natives”, Generation Z, or Gen Z for short, encompasses people born roughly between 1995-2010. The defining quality of this generational category is that its members have been exposed to the internet, social networks and mobile systems from birth.

According to Bloomberg, “Gen Z will comprise 32% of the global population of 7.7 billion in 2019.” Over the past decade, this generation has begun entering the workforce, voting and comprising a growing proportion of the consumer market. NPD points out that Gen Z is the most diverse generation ever with $44 billion in buying power that’s expected to expand as they age.

In a study of Gen Z consumer behavior, McKinsey found that at the core of the primary behaviors of this generation is an anchoring element: the “search for truth.” According to this report:

“Gen Zers value individual expression and avoid labels. They mobilize themselves for a variety of causes. They believe profoundly in the efficacy of dialogue to solve conflicts and improve the world. Finally, they make decisions and relate to institutions in a highly analytical and pragmatic way.”

A 2015 study from Nielson discovered that 72% of Gen Z respondents are willing to pay more for products and services from companies that are committed to positive social and environmental impact. Specifically, a 2017 report from NPD mentioned that this generation is willing to spend as much as 10 to 15% more on sustainably produced clothing.

McKinsey has also learned that 65% of Gen Z respondents try to investigate the origins of anything they buy. About 80% will forgo purchases from companies involved in scandals, highlighting a preference for brands perceived as ethical.

Recently, while analyzing data from over 2,000 fashion retailers, McKinsey found the use of the word “feminist” on homepages and newsletters grew over five-fold between 2016 and 2018. Ad campaigns — like Nike’s supporting Colin Kaepernick’s “anthem protests”, Levi’s campaign against gun violence and even Jeremy Scott’s “Tell your senator no on Kavanaugh” t-shirt statement — present further evidence of the apparel industry’s embrace of Gen Z’s heightened expectation that their social values and views be reflected in their purchasing decisions.

Companies like Uniqlo have donated millions to support refugee initiatives, H&M launched a Pride collection in support of the LGBTQ+ community, and the apparel industry has begun incorporating more diversity across the board.

Gen Z consumers are driving the growing number of B-Corporations that incorporate social good into their business decisions.

Gen Z consumers are driving the growing number of B-Corporations that incorporate social good into their business decisions. According to the same 2019 McKinsey report, the number of B-corps rose from just seven in 2010 to 200 in 2018. Companies like Athleta, Allbirds, Eileen Fisher and Kering SA (which owns Gucci, Yves Saint Laurent and Alexander McQueen) have promised to make as much as 40% of their products from recycled and sustainable materials. Also, a growing number of brands are choosing to donate returned used shoes to charity.

Focus on sustainable impact has also grown in the tech industry. Recently, Samsung announced that it plans on ending its reliance on single-use plastic packaging by 2030. The company hopes to be using 500,000 tons of recycled plastics and have collected 7.5 million tons of discarded products by the goal year. Uber has committed $10 million to sustainable transportation, and Apple’s facilities are now 100% powered by clean energy.

Business Insider found that Apple is Gen Z’s favorite tech brand, with 94% of teens saying they had iPhones. According to a New York youth-marketing firm, Apple ranks 13th in the Top 100 Gen Z brands list. The firm also found that a unique quality among members of this generation “is their preference to buy from brands with expressed stances on social causes.”

Global survey research company, Morning Consult, lists Google at the top of its Gen Z’s Most Loved Brands list. Nike is number 12, followed by Marvel Studios at 13.

From 2000 to 2018, Google’s unofficial motto was “don’t be evil.” Though the company has removed that statement from its corporate code of conduct language, the company announced that it reached 100% renewable energy for global operations in 2017. Google’s cafes embrace ugly produce, and the company creates ecologically focused landscapes on its campuses.

One demonstration of Google’s embracement of Gen Z’s social impact values is a 2017 study on Gen Z by the company’s Marketing and Digital Research team called “It’s Lit: A Definitive “Guide to What Teens Think Is Cool,” that states, “Gen Z is the most informed, evolved, and empathetic generation of its kind.” Though it’s unclear what Google means by “its kind,” it seems Google understands that Gen Zers care about how companies impact the world.

Groundbreaking Marvel films like Black Panther, which grossed $1.344 billion worldwide, and Captain Marvel, which brought in $1.127 billion, have changed Hollywood’s expectations of what constitutes a box-office success. Altogether, Marvel films have made a staggering $21.389 billion.

According to the LA Times, “Marvel Studios head Kevin Feige says, the company’s recent wave of superhero titles led by global hits ‘Black Panther’ and ‘Captain Marvel’ is only the start of a more inclusive Marvel Cinematic Universe.” Feige also references the legacy of the late Stan Lee, a legendary Marvel creative, editor and publisher, who said in a 1968 column, “Bigotry and racism are among the deadliest social ills plaguing the world today.” The studio’s consistent and evident dedication to this ethos, as well as its use of film to showcase a more just and inclusive world, is most likely tied to its popularity with Gen Z.

As the market influence of younger generations grows, brands face increasing pressure to embody the values of these consumers. This dynamic paints a potentially promising future for the growth of companies that aim to integrate social and environmental impact into their bottom lines. After all, what better motivation is there for businesses to be more sustainable?

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