Consumers and Climate Change

Ben Page, Chief Executive Ipsos MORIben.page@ipsos.com

0

4

8

12

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May1997

May1998

May1999

May2000

May2001

May2002

May2003

May2004

May2005

May2006

May2007

May2008

May2009

May2010

Only one person in 20 really worried

Cameron’s “Vote Blue, go Green”

campaign at 2006 local elections

9/11 London Bombs

Buncefield Oil Depot fire – toxic cloud reaches northern Spain

Wettest Autumn since records began – widespread flooding

across the UK

EC proposes carbon emission

cuts of 20% by 2020

Hurricane in Kensal Rise

Brown becomes

PM

Stern report

Base: representative sample of c.1,000 British adults age 18+ each month, interviewed face-to-face in home

What do you see as the most/other important issues facing Britain today?

Source: Ipsos MORI Issues Index

Cameron becomes

PM

22

41

60

42

Uncertainty about the science and impacts

Q. To what extent do you agree or disagree that……?

Many scientific experts stillquestion if humans are contributing to climate

change

% Disagree % Agree

I sometimes think climate change might not be as bad

as people say

Base: 1,039 GB adults aged 15+, interviewed f-2-f and in home, 23-29 May 2008

17

20

33

27

25

26

15

14

7

9

3

4

Half of the British public are sceptical of politicians’ motives

Base: Online survey, 1043 British adults aged 16-64, February 2010

% Strongly agree % Tend to agree % Neither / nor% Tend to disagree % Strongly disagree% % Don't know

Below are a number of statements that other people have made about climate change/global warming. To what extent do you agree or disagree with each of these statements?

Source: Ipsos MORI / Euro RSG

Politicians make a fuss about climate change in order to distract us from other issues

Climate change is being used by the government as an excuse to raise taxes

50

47

14

56

12

114 3

% Neither agree nor disagree

% Strongly agree% Don’t know / no

opinion

%Tend to disagree

% Tend to agree

% Strongly disagree

Base:1,822 British adults, aged 15 and over, 6 th January-26th March 2010

Source: Cardiff University / Ipsos MORI

The British public are uncertain about what the effects of climate change will be

To what extent do you agree or disagree with each of the following statements about climate change?

It is uncertain what the effects of climate change will be

69

44

30

28

38

47

43

12

14

19

3

9

8

3

2

Concern around climate change remains high..

2005

2008

2010

How concerned, if at all, are you about climate change, sometimes referred to as ‘global warming’?

Source: 2010 and 2005: Cardiff University / Ipsos MORI

Source: 2008 Ipsos MORIBase: 1,822 British adults, aged 15 and over, 6th January-26th March 2010;

1,491 British adults, aged 15 and over, 1st October – 6th November 2005

% Not at all concerned% Not very concerned% Fairly concerned% Very concerned

% Don't know/No opinion

What about business?

8 40 31 9

% Strongly agree % Tend to agree % Tend to disagree % Strongly disagree

Public split on importance of CSR to brand choice

I am more likely to choose one brand over another if I know they take their social and environmental responsibilities seriously

5921

33

43

36

1810

1997 1999 2001 2003 2005 2007 2009

% Strongly disagree % Tend to disagree % Tend to agree % Strongly agree

Large increase in proportion saying they try to buy Fair Trade in just three years

2008

I try to buy ‘Fair Trade’ products where possible

2005

Views of packaging have hardened over time

‘Amount of packaging’ a bigger consumer concern than food miles, Fair Trade, overall carbon footprint

In the same vein, more people now agree that packaging is "a major environmental problem"

79

82

68

71

%

% think food is over packaged

% agree packaging is a “major environmental problem”

1997 2008

Plenty of evidence that short-term concerns win over ‘green’ issues

Source: Advertising green products today: A view from The Futures Company July 2010

Interest in the general, aversion to the specific

Percentage of people who…

…are concerned about climate change

83%

…prefer to buy environmentally friendly products

77%

Source:Defra Tracking Report 2006; Green and Ethical Consumers, Mintel, 2007; British Airways

…report using carbon offsetting for their flights

2%

…regularly carbon offset their flights

0%

…would pay more for environ-mentally friendly products

39%

…claim to take action to reduce environ-mental impact of their travel*

19%

*Proportion of respondents who report taking one or more of the following steps: using more environmentally friendly transport, cutting down holiday flights or carbon offsetting flights

Sustainability remains a key issue – but needs to link to brand choices

Source: Marketing, 29/9/10

General attitudes and good intent count for little at the moment of choice in-store

Hence increasing activity being brand-focussed, not CSR in the conventional sense

We need to balance out the need for sustainability with other key goals for brands – visibility, consumer acceptance

– At times there will be a conflict

Which behaviours? Perceptions of impact on climate change

84%

7%

10%

10%

11%

16%

17%

22%

34%

40%

26%

8%

7%

17%

38%

11%

33%

29%

7%Recycling

Developing cleaner engines for cars

Base: All respondents 2,037. Fieldwork dates: 14th – 20th June 2007

Q Which of the actions on this list, if any, do you think will do the most to help reduce climate change?

Avoiding creating waste in the first place

Making fewer car journeys

Using less electricity

Taking fewer foreign holidays

Walking or cycling

Using public transport

Buying locally-grown food

People having fewer children

General public

Experts

Need legislation plus social marketing. ….to overcome the challenge of cognitive polyphasia…

Successful behavioural change campaigns use a mix of informing, enabling, incentivising and enforcing

Source: Websites, press search

– Publicise perils of climate change for next generation

– Publicise benefits of reducing greenhouse emissions (e.g., Action Blue Sky in Hong Kong)

– Make energy saving easy

– Give them the tools

– Invest in public transport

– Identify energy-efficient devices

– Discounts on energy saving light bulbs

– Tax petrol and aviation fuel

– Subsidise R&D into sustainable fuels

– Create car pool lanes– Fines for not

recycling – Ban use of CFCs and other greenhouse gases

Influence

Incentivise

Inform

Enable

Enforce

But you can also learn from behavioural science

Influence

Incentivise

Inform

Enable

Enforce

– People make choices without going through a full ‘rational’ decision-making process’

– Certain innate biases pre-dispose people to short-cut decision-making processes

– Applying these biases in a systematic way can make behavioural change campaigns significantly more likely to succeed

18

Short-circuiting the rational decision making process

Gather pertinent information

Process pertinent information

Calculate optimal choice

Rational

process ‘Rational decision’

Decidebased on faulty cal-culations

Decide without fully

processing the facts

‘Irrational decision’

Short- circuits

of the ‘rational’ process

Decide

without all the data/using irrelevant

data

Question

What percentage of

African countries

are members of the

United Nations?

Evidence – anchoring

Source: Kahneman and Tversky, 1974

Numbers

shown on

“roulette”

wheel

Mean

estimate of

respondents

10

65

25%

45%

Example bias – anchoring

People’s estimates are swayed by data suggested to them beforehand, even when they know the data is irrelevant or false.

Source:Daniel Kahneman, Daniel Tversky (1974); McKinsey synthesis

Case study – anchoring

Source:5 a Day campaigns in Argentina, Chile, Germany, Japan, Mexico, Spain, UK, US

Case study – anchoring!

Source:6 a Day campaign in Denmark

Example bias – Social norms

Source:Bandura, Grusec and Menlove (1967); Milgram et al (1969); Cialdini; McKinsey synthesis

People tend to follow their peer group – if they see many people doing something, they aim to do it too.

13%

21%

12%2%

39%

14%

Social norms - Support for collective action

Strongly agree

I would do more to try to stop climate change if other people did more, too

Tend to agree

Tend to disagree

Strongly disagreeDon’t know

Neither/nor

Base: 2,037 British adults, 14th – 20th June 2007

People often stay with the status quo, even if it costs them more to do so

Example bias – status quo

Source: Kahneman, Knetsch and Thaler (1991); McKinsey synthesis

Case study – status quo

Evidence – status quo

Source:Benartzi and Thaler, Save More Tomorrow: Using Behavioral Economics to Increase Employee Saving, 2001

11.6

3.5

Month 28 Month 0

In 28 months average savings increased by more than 300%

Each time an employee receives a pay rise….

….An additional 3% of his/her income is channelled into a savings scheme

Average savings per employee (% of income)

“Save More Tomorrow” Plan

You are more likely to obtain a large commitment if you obtain a small one first.

Example bias – reciprocity

Source:Festinger, 1957; Cialdini (2006); McKinsey synthesis

Evidence – Encouraging Reciprocity

Source: Influence: the psychology of persuasion, Cialdini, 2006 edition, Ipsos MORI research

Ask neighbour to “watch my things”

Leave without asking

2. Leave the radio to go swimming

1. Experimenter sits on beach with a radio

3. Thief tries to steal the radio

20% try to stop

the thief

95% try to stop

the thief

4. Test public reaction

Behavioural Norms you might exploit….

Decide without all the data/using

irrelevant data

Decide without fully processing

all the facts

Decide

based on faulty calculations

Short-circuits of rational decision-making process

Reciprocity Liking

Consistency Scarcity Endowment

Social norms Authority

Status quo

Availability/ recency

Choice overload Justifiability Anchoring

Breakpoints

Certainty preferenceLoss aversion Probability

misassessment

Regret aversionFraming/ contrast

Hyperbolic discounting

Mental accounting

Biases

False memory

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1925 1935 1945 1955 1965 1975 1985 1995 2005

AIDS awareness change in the UK

Source: Health Profile of England and Wales

Number of diagnoses of gonorrhoea

Thousands, in England and Wales

Action across multiple fronts to reduce STIs

Influence

Incentivise

Inform

Enable

Enforce

BBC programming about AIDS

Distribution of free condoms

“Tombstone” campaign

Use of numerous biases including Authority, Liking, Hyperbolic Discounting, Probability Misassessment and Social norm

None

Social norm: James Bond and the decline in STIs in the 1980s

Source: Avert; BBC; www.universalexports.net

0

1

2

3

Average Bond girls per film by actor

Connery

Lazenby

Moore

Dalton

Brosnan

1960 1970 1980 1990 2000

Three questions that need a “yes” answer

Define the shift

you want to see

Devise the actions

to deliver the shift

Execute and

monitor the results

Do you really understand your target audience and what drives their behaviour?

How are you going to define and measure success?

Have you lined up the right partners to help reach and influence the target audience?

Bottom line – have to show consumer benefit (and nudge) Concern is not rising…

Socially and environmentally responsible shopping appears to have plateaued and brands can no longer charge more for this

While there is an increasing expectation that brands offer such options, but need to illustrate the pay-off for consumers

– Consumers want ‘fair trade’ and expect it in many ways, but they will not want to pay more for it, especially for smaller ticket items

– Emotional pay-offs are important, but it needs to be more than just ‘feel good about our brand’; consumers want to know what it does for them

Still huge potential for nudging, and remember internal benefits as well – people want to do the right thing…

ben.page@ipsos.com

Daily Mail

DailyExpress

The Sun

The Mirror

Daily Record

Financial Times

The Metro

Other

Daily TelegraphNone of these

Evening Standard

Daily Star

The Independent

The ScotsmanThe Guardian

The TimesThe Herald (Glasgow)

02468

1012141618202224

% pollution/environment is important issue

Pollution/environment: by daily readership

Base: 8,848 GB adults, 18+ Source: Ipsos MORI Political Monitor: Annual aggregate 2007