• by Sarah Mahoney  @mahoney_sarah, June 5, 2008

For months now, marketing experts and activists alike have maintained that consumers' commitment to the environment could withstand a lousy economy. But a new survey finds that more consumers are cutting back on often-pricier green purchases, and plan to spend even less in the coming year.

"There's a little bit of a pullback," says Russ Meyer, chief strategy officer of Landor Associates, a strategic brand and design consultancy, and one of the WPP Group agencies that conducted the study.

Last year, he says, 44% of people say they planned to spend more on green purchases--and this year, that number has fallen to 38%. "It's not a huge decline, nor is it much of a surprise, considering what's happening with gas prices and the housing market," he says. "But still, it's a change in trend--in four years, we've seen interest in green causes and purchasing go up and up. This is the first time we've hit a pause."

Overall, the 2008 Image Power Green Brands Survey, which tracks perceptions of green in the U.S. and the U.K, found that the environment has taken a back seat to the economy for more than 75% of Americans and 66% of Britons.

It also turned up a severe streak of environmental pessimism: Two out of three Americans believe the environment is in worse shape than it was five years ago. And lower-income consumers have greater concern for the direction of the environment than wealthier consumers. And global warming, last year's No. 1 environmental concern, is less worrisome now than energy and resource issues.

As was true last year, consumers still rank body care and grocery as the "greenest" product categories, with travel and energy remaining at the bottom. Consumers were asked, unaided, to name the greenest brands, and the top 10 were Whole Foods; Burt's Bees; Trader Joe's; Tom's of Maine; Toyota; Seventh Generation; Honda and GE (tied); Whirlpool; Aveda and Method.

One big surprise, Meyer says, is that Wal-Mart--once loathed by environmentalists--was frequently mentioned as a green brand, although it didn't make the top 10. "Clearly, there is a perceptual benefit to getting out in front of this issue for consumers. It's not going to have an immediate payoff in the next quarter. But these brands are gaining traction."

The study results "have helped us realize that green needs to put in the context of consumer's lives," he says. "Whether it's 44% of consumers or 38%, that's still a fair amount. So it brings us back to the classics of branding--we have to ask, what is the relevance to consumers' lives right now?"