The problems of global warming and excessive use of natural resources are common concerns throughout the world. Hong Kong, as a global citizen, has to play its part in supporting, responding to and promoting sustainable consumption and production. We need to pursue economic development and improved living standards in a manner that does not jeopardise the next generation's well-being. This is critical for Hong Kong to remain as a liveable city in the future. Please click here to read the report.
The First Assessment on the State of Sustainable Consumption for Hong Kong
Commissioned by the Consumer Council, this baseline survey aims to provide insights into local consumers' knowledge and priorities about sustainable consumption (SC). Based on the questionnaire framework, the Council has constructed a set of Sustainable Consumption Indexes (SCI) to keep track of development and progress over time. The SCI encompasses three indices covering "Awareness", "Behaviour" and "Readiness" for SC.
Hong Kong consumers have score well in most "Awareness" (average score: 74) and "Behaviour" (average score: 69) sub-indexes, except for a relatively low score (48) on a sub-index in the willingness to purchase SC products in the "Readiness" index. This implies there is a sizable gap between purchasing actions and their belief in the importance of SC.
Hong Kong Consumers: Knowledge and Action Is Out of Synch
Our survey found that Hong Kong consumers are highly aware of sustainable consumption and are willing to pay extra for it. However, they are hesitant and less willing to undertake behaviours that are either bring inconvenience to their lifestyle or require more adjustment to their current habits.
Respondents say they have already adopted simple SC behaviours like: switching off lights (40% always and 36% usually), only start using washing machine when fully loaded (35% always and 40% usually). But behaviours that cause discomfort or require extra effort are less practiced such as reducing the use of air conditioners (19% always and 39% usually) or water saving (14% always and 56% usually). There is room for significant improvement by persuading people to change behaviours that they practice currently "sometimes" or "seldom" to "always".
Fairly Good Awareness of Sustainable Consumption
The survey results indicate a high level of SC awareness amongst Hong Kong consumers, arising from education and environment protection campaigns that have taken place over the years. While most respondents may not fully assured on their understanding of the term "sustainable consumption", their intuitive understanding is highly consistent with the United Nation's official definition. It embraces concepts like: thinking about future generations (76%), looking after the environment (75%) and society consuming more efficiently (64%).
However, a few non-environmental and more remote ethical concepts like fair trade (52%) and space for farm animals (51%) were less frequently associated with SC.
Consumers Are Aware of SC, But Actions Are Inadequate
Around 38% of the respondents say they are concerned about the environment and 39% realise their consumption has an impact on the environment. However these views are not universal with 22% saying they were unconcerned.
When comparing people's concern with their behaviour, there is a noticeable gulf between their intellectual agreement that SC is an important issue, and the limited extent to which they are practising pro-SC behaviours. Recycling is a good example, respondents said they believed waste separation to be beneficial and effective at protecting the environment, they were honest enough to admit most did not themselves separate and recycle their waste. Interviewees mentioned that in incorporating sustainability into their lives a balance had to be struck with issues like comfort. If the temperature was 30°C, the air-conditioner was needed to sleep comfortably.
Consumer Will Do Easy Changes but Are Less Keen to Adopt More Challenging SC Life Styles
Respondents were asked about the extent to which they undertook sustainable behaviour. In only six of the purchasing behaviours did more than 60% of respondents strongly agree or agree in practicing the proposition. These were: buy energy-efficient appliances (78%), bring own shopping bag (69%), buy water-efficient product (69%), refuse to eat meat (64%) or purchase clothes (62%) produced from endangered species and repair and continue using domestic appliances (64%). Consumers could undertake these actions either at no extra cost, or utilising easily understood information available at the point of sale.
In contrast, few respondents chose to purchase more expensive sustainable products such as eco-labelled products, organic foods or fairly trade goods. Consumers also find difficulties in undertaking more challenging actions that affect their living quality. An example is reducing travel by plane.
Relationship between Consumers' Age and their SC Tendency
Looking at the different age groups, the youngest group (15 – 24) were the most concerned about the impact of their consumption on the environment, while the older age group (55 – 64) was the least concerned.
However, a significantly higher proportion of older consumers (age 45-64) than younger consumers said they found energy efficiency (65%) and waste separation (55%) doable. In our survey, 71% of this group will pack uneaten food for eating later (71%) and recycling instead of disposing of waste (63%). Such pro-SC behaviours might be due to frugal habits developed when they were younger.
The younger generation needs to learn to adopt these behaviours if they wish to build a greener world for themselves and their children.
Education is needed to improve consumers' understanding of SC and instil the confidence that they, as consumers, can help sustainability through their purchasing choices. Better recycling infrastructure and a broader range of suitable sustainable products would also assist consumers translate their beliefs into actions.
Market opportunity for SC products
There is a strong correlation between sustainable purchasing behaviour and personal earnings. The higher income group (personal monthly earnings of more than $20,000), the more educated and families with children are more inclined to purchase sustainable products like energy-efficient appliances.
A large majority, around 75% of consumers are prepared to pay a reasonable price premium for SC products, especially when the product provides greater safety or economy in-use. 77% are willing to pay 5% more for products made from non-toxic material, 23% even say they are prepared to pay 20% to 50% more.
Even though younger consumers and students claimed they would be prepared to pay more, this did not translate into action. Factors holding them back are lack of suitable information, high prices and lack of suitable products.
Consumers are interested not just in the characteristics of the products they buy, but also in the SCP performance and behaviour of the companies that they purchase from. Based on the survey, almost 2/3 of the respondents preferred to buy products and services from companies that care about environment and engage in environmental protection.
This finding suggests commercial opportunities for businesses that capitalise on the "green dollar" market. But success will require the establishment of trust between the manufacturer and consumer to build confidence that the claimed SCP characters of the good will be delivered.
ESG Reporting of Listed Companies Is Not Sufficiently Disclosive
The report also features results from a review of sustainability reports published by a hundred randomly selected companies that provide consumer products and services, listed on the Hong Kong stock exchange. Although almost half the companies provide some form of environmental information, but the quality of the reported information is far poorer than international disclosure standards.
It is worth noting, of the 41 companies which provide some sort of environmental information, 5 made only general remarks without any reference to specific policies or results, such as measures to reduce the sustainability impact of their operations on the environment and natural resources.
Of the sampled companies 18 produced or provided environmentally friendly goods or services, which were sold to the public or other companies. The study found that 5 of these (28% of the 18 companies) did not report any information about their sustainability policies or performance either in their annual reports or through other means. It was good for these companies to provide environmental friendly options to consumer, but the Council is keen to see an improvement in transparency.
In general the Council would like to see the reporting of policies and measures to reduce the businesses impact on environment and a set the performance targets and KPIs on conservation and emission reduction to allow longer term tracking.
The Council recommends businesses improve the quality of the information about their sustainability performance to help gain the trust and business of consumers. The Council also sees the importance of having a single user-friendly platform which holds the ESG, CSR and sustainability reports of companies, and which can be easily accessed by stakeholders to allow them to easily locate up-to-date information.
Government and Businesses Offer Incentives
"The Government, the business and consumers all have distinct roles to play. Their actions reinforce one another and together will achieve a more effective outcome. A systematic approach in education and provision of infrastructure can help convert consumers' good intentions into action. Provision of green choices with accurate and credible information by businesses can also help galvanise consumer support", said Professor Wong Yuk-Shan, BBS, JP, Chairman of the Consumer Council.
To close the gap between their awareness and behaviour, around 60% of respondents believed that more information and the commitment of Government and business would better motivate them and increase their confidence to act.
The survey findings also revealed the need for stakeholders to work together to bring about a sustainable economy. International experiences showed that collaborative, stringently and effectively policed regulation has helped remedy some global environmental issues.
"The survey is an important strategic step in the Council's advocacy of SC in Hong Kong. In late February we will organise a forum so that like-minded organisations can discuss how we work together", added Prof. Wong.
Recommended actions
"Consideration for future generation" (76%) and "looking after the environment" (75%) are key drivers for consumers to support SC, particularly among those married with children. Respondents opined that the society should use resources more efficiently (55% for 8% against), were not persuaded that SC means either they (39% for; 24% against) or society as a whole (38% for; or 25% against) should consume less.
This is in line with the Council's stance on promoting "Rational Consumption" that SC and economic growth should be promoted and achieved hand in hand. It is about consuming more wisely and bearing in mind the interest of future generations who deserve the same breadth of products and consumption opportunities.
The Council recommends an integrated framework for the Government, the Consumer Council, the business community and consumers to build a more sustainable economy and lifestyle in Hong Kong.
Government
- Make better use of policy levers such as economic incentives, education, regulation and provision of infrastructure such as waste collection and recycling.
- Coordinated internally to avoid gap in policy coverage.
- Collect, aggregate, analyse and release required information, to monitor and report work progress in SC to the public.
Consumer Council
- Educate behavioural changes through its functions like product testing, consumer education and information dissemination.
- Engage internationally and seek collaboration.
- Gauge communicate consumer view points
Consumers
- Understand the impact of their consumption on environment proactively, and challenge themselves to make more difficult changes in behaviour.
- Make purchase actions consistent with their belief.
Businesses
- Provide quality and trustworthy information on sustainable performance and report in line with international and the Exchange guidelines.
- Anticipate consumer demand to consume more sustainably, design, introduce and promote more sustainable products to local market.
Appendix
Definitions of Sustainable Consumption and Production (SCP)
"The use of services and related products, which respond to basic needs and bring a better quality of life while minimising the use of natural resources and toxic materials as well as the emissions of waste and pollutants over the life cycle of the service or product so as not to jeopardise the needs of future generations."
Oslo Roundtable on SCP, 1994
"SCP is a holistic approach to minimising the negative environmental impacts from consumption and production systems while promoting quality of life for all."
Key Principle of SCP
- Improving the quality of life without increasing environmental degradation and without compromising the resources needs of future generations.
- Decoupling economic growth from environmental degradation.
- Applying life-cycle thinking which considers the impact from all life-cycle stages of the production and consumption process.
- Guarding against the re-bound effect, where efficiency gains are cancelled out by resulting increases in consumption.
UNEP, 2011
Methodology of the consumer survey
The Council commissioned a research company to study consumer views about sustainable consumption.
The first part was a telephone survey of a thousand Cantonese-speaking Hong Kong people aged between 15 and 64. The interviews took place between 14 August and 13 September 2015. Individual responses were grossed up to the overall Hong Kong population by Age and Gender. Respondents were informed that the survey had been commissioned by the Council and on the topic area.
In designing the survey reference was made to several similar studies undertaken in Australia, UK and the Mainland. The survey questionnaire can be found in the report.
Most of the questions asked people to express their agreement to statements on a 1 to 5 scale. Analysis of the responses allowed the Council to judge the relative priorities consumers gave to different statements.
The second part of the study consisted of three 90-minute focus groups to gain a deeper qualitative understanding of consumers views about sustainable consumption.
Group 1: full-time students aged 15 to 24,
Group 2: employed people aged 25 to 44 and
Group 3: non-workers (home-makers, retired and unemployed) aged 15 to 64.
The survey also developed a set of summary statistic the Sustainable Consumption Index that integrated answers from many of the questions into a set of figures that could be compared either over time or between countries.
Methodology of the business environmental sustainability reporting exercise
The study looked into companies listed on the Hong Kong Stock Exchange from two categories, namely consumer goods and consumer services, according to Hang Seng Industry Classification System (HSICS), which were considered to have close relationship with consumers.
Amongst 656 firms (i.e. about one third of the total numbers of listed companies in Hong Kong as of July 2015) of two broad categories of companies, consumer goods companies and consumer services companies, a sample of hundred listed companies were chosen. Of the hundred companies, 69 and 31 companies were sampled from the categories of "Consumer Goods" and "Consumer Services" respectively.
A stratified random sampling approach was adopted with respect to the size of market capitalisation. In terms of size of market capitalisation, the standard classification of companies with respect to the size of market capitalisation is into groups of Very Large Cap (larger than $10 billion), Large Cap (between $ 5 billion and $10 billion), Medium Cap ($1 billion and $5 billion) and Small Cap (less than $1 billion). Corresponding proportion of number of companies of each group size amongst 656 companies is randomly sampled.
Not all firms listing in Hong Kong necessarily have substantial operations in Hong Kong. Of the 100 companies surveyed, 53 had business activities in Hong Kong.