When it comes to sustainability, there’s often a perceived disconnect between what consumers say they want and what they do – particularly when it comes to price. People will say they want to buy products that are better for the environment and have a socially responsible ethos, but companies report that launching products with environmental, social and governance (ESG) claims struggle to gain a foothold.

To get to the bottom of this disparity, management consulting firm McKinsey & Co. partnered with NielsenIQ and looked at five years of U.S. sales data from 2017 to June 2022, covering 600,000 individual products (worth $400 billion in annual revenue) that came from 44,000 brands across 32 food, beverage, personal-care and household categories. The expansive study found that, in fact, products making ESG claims grew at a higher rate than counterparts without such claims.

Though this study is on the retail side, it’s instructive for promotional products companies to delve into consumers’ attitudes and behaviors – since there’s a correlation between that and what a distributor’s clients care about.

Take a look at some of the highlights from the recently released McKinsey study.

78%
The percentage of U.S. consumers that says a sustainable lifestyle is important to them.

28%
Products making ESG-related claims averaged 28% cumulative growth over the past five year-period, versus 20% for products that made no such claims.

Six Types of ESG Claims

The McKinsey study broke down ESG claims on packaging into six categories:

1. Animal welfare: This includes claims like “cruelty-free” and “not tested on animals.”
2. Environmental sustainability: This encompasses things like “compostable” and “eco-friendly.”
3. Organic positioning: Products that indicate organic certification of some kind.
4. Plant-based: This indicates “vegan” items and other such claims.
5. Social responsibility: “Fair wage” and “ethical” fall in this category.
6. Sustainable packaging: This category includes claims like “plastic-free” and “biodegradable.”

Who’s Purchasing Sustainable Goods?

• Higher-income households
• Urban and suburban residents
• Households with children

Though these demographics were more likely to buy products with ESG claims, the research shows that a wide range of consumers across income, age, race and geography are buying products with ESG-related labels, according to McKinsey.

32%-34%
Brands that get more than half their sales from products with ESG-related claims had a repeat customer rate of 32% to 34%, whereas brands with less than 50% of sales from products with ESG-related claims had repeat rates of less than 30%.

Combining Claims = More Authenticity

On average, products with multiple claims across the six ESG categories established by McKinsey grew more quickly than other products. Products making multiple types of claims grew about twice as fast as those that made only one type of claim.

5 Insights From the Study

1. Ensure ESG claims support a broad strategy of environmental and social impact.
2. Embrace ESG in product design.
3. Invest in ESG through both existing brands and new products.
4. Study ESG patterns and dynamics specific to various categories and brands.
5. Look at ways to create products that address multiple ESG concerns, since consumers tend to reward such items.

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