For years, managers were sold a compelling idea: doing good can mean doing well. Surveys have suggested that consumers are increasingly willing to pay more for products that are perceived (or marketed) as the best in the world. Counselors reinforced the message. Investors reward environmental responsibility. Companies have launched a wave of sustainable products, expecting customers to reward their efforts in the payment space.
The research seemed to justify the confidence. In 2020, the consulting firm Kearney reported that 70 percent of consumers they said they were willing to pay up to 10% more for sustainable products. Another consultant, Bain, surveyed more than 23,000 consumers in eleven countries in 2023 and found that 64 percent reported high levels of anxiety about sustainability. McKinsey went further, declaring that consumers not only cared about sustainability but had it support that concern and their bags.
The problem is that they weren’t there. When McKinsey tested actual willingness to pay using an auction-based method, consumers were willing to pay money. average premium of only 2.2 percent to save on all three daily products: yogurt, shampoo and t-shirts. Similarly, a survey conducted by European retail company Zalando involving 2,500 consumers found that while 60 percent said sustainability is important to them, only. 20 percent were actively seeking that information at the time of purchase. This is what researchers call the say-do gap: the distance between what people tell voters and what they actually do in stores.
The gap reflects a fundamental truth about how people buy things: customers buy products to get a job done. No one buys dishwasher tablets to save the planet. They do that to clean the dishes. No one buys farm products to reduce carbon emissions. They want to run a highly productive farm. Sustainability may be a reason to carebut rarely a reason for purchase. These two are not the same thing, and mixing them up has been one of the most costly strategic mistakes of the last decade.
This is a central finding of our research. But the story does not end with failure. The most interesting finding is that many commercially successful sustainability strategies in recent years have quietly abandoned the premium model and replaced it with something much more sustainable: using sustainability to improve customer outcomes.
For most of its history, John Deere sold farm equipment. But recently, we have moved into selling farm produce. With precision technology, farmers can now reduce fuel consumption, fertilizer use and herbicide injections, thereby simultaneously improving yields, reducing costs and simplifying regulatory compliance. Although the environmental benefits are many, sustainability is not the driving force behind the purchase. Farmers use this technology because it helps them run better businesses.
This represents a very different mindset from the one that dominated sustainability thinking for much of the last decade. The old model assumed that the environmental benefits themselves would create enough value to justify higher prices or, in some cases, lower performance.
John Deere’s approach does the opposite. It uses sustainability to the better performance, so that customers get better results and environmental benefits follow automatically. The company does not need to persuade farmers to take care of the planet. It is necessary to convince them that the technology works. Sustainability is not just a choice; it is not visible to those who do not care about it.
We have encountered this pattern over and over again. Take the dishwasher detergent. Even with a machine, washing dishes was a chore. For years, consumers have been accustomed to washing dishes before loading them in the dishwasher, a practice that can consume 75 gallons (19.8 liters)
Finish engineers created a tablet that is efficient enough to eliminate the need for cleaning altogether, saving customers an average of 57 liters (15.1 liters) of electricity.
Electrolux offers a consumer version of the same logic. The company’s care drum, which is a pillow-like device inside washing machines, is designed to be gentle on clothes and reduce wear and tear, helping clothes last longer. For customers, that means lower replacement costs and the ability to keep the clothes they need longer.
The environmental benefits are also real, although that is not their main selling point. Electrolux estimates it extends the life of clothes by just nine months reduces pollution, waste and
This is what we call resonance: leveraging sustainability to increase customer value rather than simply demonstrating environmental commitment. Innovative companies understand something that eludes most sustainability strategies: that not all customers care about sustainability, and it’s not their job to change that. What they can do is use sustainability as a lens for innovation, finding ways to improve what customers already value while reducing environmental impact. The best sustainability strategies embed environmental benefits within the results customers already want.
The same principle applies to business-to-business markets. Schneider Electric has built a large part of its value proposition on helping customers reduce energy consumption and improve operational efficiency. Its customers don’t buy sustainability information. They buy lower costs, greater durability and better performance. Sustainability is the result of solving those problems. This is one of the reasons that sustainability has proved to be more commercially viable in industrial markets than many expected: when environmental improvement is accompanied by a structure of economic output, the business case becomes more difficult to challenge.
The experience of plant meat shows the opposite. Consumer interest in reducing meat consumption is still important. Yet growth has slowed significantly as many brands struggle with a common set of challenges: high prices, questions about taste and concerns about the level of processing involved.
Customers often sympathized with nature’s work. They were less willing to compromise on the attributes that drove the initial purchase decision. The lesson is not that sustainability doesn’t matter. It is that sustainability is most important when promoting things that customers already value and fails when asking them to accept less of those things in exchange.
This change can end up being healthy in the sustainability effort itself. For years, the top question in business has been: How much will customers pay for product liability? Increasingly, winning companies ask for something more productive: how sustainability can help us create more value?
Framed that way, the question leads to very different answers. It encourages companies to act differently, focusing on eliminating waste or improving product performance, or in some cases, reducing ownership costs or strengthening customer loyalty. These actions are not seen as trade-offs for sustainability, but as manifestations of it. This new lens transforms sustainability from an added feature to a source of competitive advantage.
This is where the next phase of sustainable business will be won or lost. The future does not belong to companies that ask customers to choose between sustainability and economics. It belongs to companies that have made sustainability that makes the economy better.
Clean Winners: A Sustainability Strategy That Puts Customers First with Goutam Challagalla and Frédéric Dalsace is out now, published by Harvard Business Review Press.
