The founder of the global sustainability and responsibility practice at Bain & Company on whether sustainability has a perception issue, if it is right to get consumers to pay more for eco-conscious products, and how businesses can use sustainability as an opportunity for innovation
Jenny Davis-Peccoud, partner and founder of the global sustainability and responsibility practice at Bain & Company
Indian companies have an exciting opportunity to go deeper in their sustainability journey because of the growing economy, and the earlier they get into it, the bigger will be the business benefits, says Jenny Davis-Peccoud, partner and founder of the global sustainability and responsibility practice at Bain & Company. During her recent visit to India, she sat down for an exclusive interaction with Forbes India to discuss how business can move towards sustainable practices even in the absence of policy support. She spoke about how companies, particularly in the FMCG industry, can approach sustainability from an innovation lens, and how the perception of sustainable practices can go from something that costs money to something that makes money for businesses.
Davis-Peccoud, a globally recognised expert in sustainability and ESG with an MBA from Harvard Business School, has deep expertise in areas, including food systems transformation, circularity, nature and biodiversity, and carbon transition. She has over 30 years of advisory experience, focusing on sustainable business and value chain transformation. Her expertise is in linking sustainability to value creation, leadership alignment and sustainability venture creation. Edited excerpts from the interaction:
Q. Is it right to expect consumers to pay more for sustainable products or is it a cost business can bear, given the long-term benefits?
It is a nuanced question, because not all consumers are the same. In our research, we see that there are about 15 percent consumers in India who are what we would call ‘sustainability champions’; they care, buy and pay for sustainable solutions. Then there are another nine or 10 percent, who are champions in specific categories. Maybe they care about food, sustainable fashion. These two categories put together is already 25 percent, which is a big chunk of consumers who are willing, certainly to buy, and possibly to pay, for sustainable products. Of course, that leaves a big chunk of consumers who are not willing [to pay more for sustainability]. Every company will need to understand who their consumers are, what they are interested in, what they are willing to pay for, and how much they are willing to pay. What companies put on the shelves as sustainable products can be two to three times more expensive. Even I look at some of those products and think, ‘Why on Earth would I pay that much more for, say, a bottle of shampoo?’ So, companies have to be careful how much they are getting consumers to pay, and then communicate, clearly, why they are expecting them to pay that much. Transparency is important.
Q. You work a lot with FMCG companies. Many of them have different strategies for rural and urban areas. In rural areas, for instance, they introduce smaller packs. From purely an environment and waste generation perspective, how sustainable are small packs?