Deloitte study suggests Canadians lack trust in brands' sustainability claims

A pedestrian walks past a Deloitte sign in downtown Ottawa on Tuesday, Sept. 20, 2011. While most consumers believe in rewarding companies that accurately deliver on sustainability promises, a new study suggests their trust is lacking in the "green" claims made by brands. THE CANADIAN PRESS/Sean Kilpatrick

While most consumers believe in rewarding companies that accurately deliver on sustainability promises, a new study suggests their trust is lacking in the "green" claims made by brands.

The report released Thursday by Deloitte Canada on creating value from sustainable products said Canadians expect sustainable buying options and crave transparency with respect to the claims brands make.

It found that in September 2021, nearly half of Canadian consumers had purchased at least one sustainably produced good or service in the previous four weeks. But by March 2023, that figure had declined to 37 per cent.

While that 18-month stretch marked a period of high inflation, the study points to a lack of consumer confidence as another key factor. Around 57 per cent of Canadian consumers said they don’t believe most “green” or sustainable claims that brands make, it found.

That appears to conflict with the perception of Canadian business leaders, 71 per cent of whom reported they believe the public has a significant level of trust in the authenticity of sustainability claims, along with 28 per cent who think consumers have at least a moderate level of trust.

Joe Solly, a partner with Deloitte Canada's risk advisory practice and national consumer leader for sustainability and climate change, said he was surprised by that "disconnect."

"There is no level of standardization around communicating sustainability and related product claims and therefore it can tend to be a little bit of a Wild West in that you could say almost anything you want about your product that you as a business might believe to be true," said Solly.

"But it's very difficult and confusing for consumers to understand, compare and contrast. And what it leads to is frustration and skepticism."

Despite many consumers tightening their wallets due to rising costs in recent years, 93 per cent of respondents indicated they do not think of sustainable products and goods as “just marketing.” More than 60 per cent of respondents said they are willing to pay a premium of 20 per or more on green products when companies can prove their authenticity.

But the survey found 46 per cent of consumers are unwilling to pay extra for sustainable products because of a lack of clarity, trustworthiness and authenticity from brands.

"A good claim is one that embodies a number of different attributes," Solly said.

"It's rooted in some standard and addresses regulatory and has verification programs. It's endorsed by reputable organizations and regularly assessed. When customers see some form of a seal or a certification … they tend to have higher degrees of trust, versus just a random statement or claim on a product."

Meanwhile, 41 per cent of Canadian businesses feel at risk of being accused of greenwashing — when companies deceive consumers into believing their products are environmentally friendly — if they pursue sustainability goals.

"Businesses need to be wary of potential greenwashing if they're not authentic, complete, transparent and represent attributes of the entire life cycle of a product, considering its ingredients and sourcing and manufacturing and distribution," Solly said.

"What happens at the end? Does it go into landfill, or is it recirculated? Is it taken back? Companies are needing to beware of the risks, but also be aware of the opportunity."

This report by The Canadian Press was first published June 22, 2023.