Forget buying a lottery ticket, the future is looking green. As the United Nations’ environmental agency (UNEP) reported this week, the global market for low-carbon and environmentally-friendly goods and services is projected to triple to $2.2 trillion by the year 2020. While “green trade” still only represents a fraction of the global market, the numbers don’t lie: trade in certified products and environmental goods and services is on the rise.
The new report, Green Economy and Trade-Trends, Challenges and Opportunities, says that there are six main economic sectors that identify “green trade” opportunities – agriculture, fisheries, forests, manufacturing, renewable energy and tourism. Top growth areas are reported to include organic food and beverages, which are projected to reach $105 billion by 2015 (up from $62.9 billion in 2011). Next is seafood farmed according to sustainability standards, which is projected to rise to $1.25 billion, up from $300 million in 2008.
Looking at these industry sectors, one can’t help but see the convergence of a consumer base that is increasingly environmentally-focused and the implication of working in an industry with constricted natural resources.
According to UNEP, developing countries with abundant renewable resources are well-positioned to increase their share in international markets for sustainable goods and services. UNEP’s executive director Achim Steiner says that would help “reverse the global decline in biodiversity, mitigate the release of greenhouse gases, halt the degradation of lands and protect our oceans."
However, green marketers should take note – while “green trade” may be on the rise, new research published in the Proceedings of the National Academy of the Sciences found that some politically conservative shoppers actively avoid products that advertise and tout how environmentally friendly they are.
In particular, the study found that the more conservative respondents were less likely to support energy-efficient technology, such as LED lights. In the studies, researchers looked at purchasing behavior of people when they were aware of the relative “greenness” of a product. The study points out that while labeling products as “green” or “energy efficient” is a common marketing strategy today, in some instances, labeling something as “green” may not actually help.
And then, there are those consumers who are not driven by political persuasion, but are swayed by image / brand building. Recent research from global market research firm Mintel found that consumers are being persuaded to use more “green” products and maintain a good shape.
Mintel found that of those who believe it’s important to be seen as green (a category that I, myself, probably fall into), 24% admit to having purchased a green product just to demonstrate their environmental concerns (vs. 9% on average) and 20% "admit to having concealed recyclable trash in with their regular garbage so that others can't tell they didn't separate their recycling” (vs. an 8% average).
The facts are that whether consumers like it or not, the market is embracing sustainable products and services – in part because they have to, and in part because it’s smart business. Study after study finds that imbedding sustainability into one’s business model is not only the right thing to do, but it’s profitable in the long run. And for some of these resource-restricted industries, it’s the only way that they will survive.