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Young consumers may drive the speed of environmental change

Young consumers may drive the speed of environmental change

The choices of consumers aged 16 to 40 will determine whether long-term emissions plans are likely to be met. They will have a significant influence on the environment, as soon they will be the group spending the most money on – potentially sustainable – products and services.

Sustainable choices of young consumers will have a key influence on climate

To what extent young consumers choose sustainable services and products likely will determine the speed of environmental change: They already make up 54% of the world's population and their share of total global consumer spending is 48%. More importantly, by 2040 Generation Y (Millennials) and Generation Z will be the highest earners and therefore potentially the biggest spenders (69% of total consumer spending).

Proportion of working age population 2000-2030
Total estimated consumer spending (USD trn)

Source: United Nations, Credit Suisse Research, 2022

Younger consumers in particular express a preference for sustainable goods and services and a strong desire to reduce consumption of unsustainable products. As this cohort expands its share of consumer spending, we see opportunities for robust potential growth in sustainable products and services.

However, despite their preference for more sustainable options overall, the younger generations have not yet fully embraced sustainability in every aspect of their lives. Interestingly, these aspects differ depending on the region and developmental level of the country.

Food consumption and production

Younger consumers across both developed and emerging economies want to improve the sustainability of their diets by eating more plant-based products and decreasing their consumption of fast food and meat. They attribute this choice to environmental, animal welfare, and health reasons.

In the future, how is your consumption of following food and beverage products likely to change? (%)

Source: United Nations, Credit Suisse Research, 2022

Though young consumers seem relatively less willing to move away from traditional dairy products compared to meat, all in all, around 65% of respondents expect to increase their consumption of plant-based meat and dairy alternatives in the future.

Getting smart about housing energy

Energy production is incredibly taxing to the environment. While the overall likelihood of investing in energy-saving technologies like solar panels and insulation appears relatively high among Generation Y and Z, this is overwhelmingly driven by respondents from emerging markets. Also, young consumers all around the world seem interested in investing in sustainable solutions like smart heating and cooling monitoring systems, and heat pumps.

During the next five years, how likely are you to invest in the following energy-saving technologies?

Source: United Nations, Credit Suisse Research, 2022

Travel and transport choices

To reach net zero by 2050, nearly all global light-duty vehicle sales would need to be zero-emission by 2040. We are seeing a rapid shift in consumer preference toward electric/hybrid vehicles: Nearly two-thirds of consumers expect to own one in the future, up from just 19% who own one today.

This suggests the transition from traditional internal combustion-engine vehicles toward electric/hybrid ones is well underway, although we note that it is currently driven primarily by emerging markets.

In relation to cars, which of the following options describes your situation? (%)

Source: United Nations, Credit Suisse Research, 2022

In contrast, reducing the amount of air travel was among the least likely to occur among the respondents, particularly in the developed markets where the majority do not intend to reduce how much they fly for non-business travel.

Thinking of environmental concerns and flying, which of the following options describes your future situation best? (%)

Source: United Nations, Credit Suisse Research, 2022

Decline of fast fashion

The textile industry involves millions of producers and billions of consumers globally, which means it is fertile ground for improvement. The past decade has seen the rise of fast fashion, with its significant environmental impact in terms of water intensity, pesticide usage, and waste generation.

It has also been often associated with social and labor-related issues. However, awareness seems to grow, and over 40% of the consumers believe the fashion industry is unsustainable. What is more, on a net basis, a greater number of consumers expect to decrease their consumption of fast fashion and luxury brands.

In the future, do you expect your usage of the following clothing retail channels to increase or decrease? (%)

Source: United Nations, Credit Suisse Research, 2022

Choosing more sustainable products and services with regard to fashion seems more likely to occur in developed markets when compared to emerging markets.

While the need to create a more sustainable future may appear apparent to many, the question is whether consumers will play their part and adopt a more sustainable lifestyle. With their increasing importance as consumers, younger generations could be the agents of change.

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