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Gen Z’s Desire for Sustainability and the Rise of Greenwashing

CGK President Jason Dorsey speaks to CNBC about this trend

Gen Z planting a tree

America’s youngest generation—now up to age 25—is rapidly emerging and flexing their influence on brands, industries, and marketplaces. This new generation not only impacts a company’s bottom line with their spending but also with their vocal opinions on what brands and leaders should make a priority outside of profits. This is a trend we’ve been studying for years at The Center for Generational Kinetics and in our State of Gen Z® annual study.

One consumer trend Gen Z is not only driving but redefining is a deep expectation for sustainability from brands, retailers, merchants, supply chains, manufacturers, and all contact points in between (including payments!). As companies recalibrate and adapt to fit Gen Z’s quest for sustainability and improving the planet, a new and overlooked but important reality has emerged: greenwashing. 

What is greenwashing? This is when companies put on the public appearance of being focused on improving the environment, minimizing their environmental footprint or impact, and generally saying that they are ‘going green’—yet under the surface, it’s a facade, misleading, or at best overmarketing the real actions they are taking. This is a little talked about but fast-emerging issue in marketing, and it’s very much worth exploring, which is why CGK President Jason Dorsey was excited to cover this topic in his recent interview with CNBC. 

In the CNBC interview, Jason was excited to talk about Gen Z’s desire to create a more sustainable world and why this is so important to the generation. We also think understanding Gen Z’s focus on sustainability is a priority insight for leaders at organizations of all sizes and industries. The importance of this strategy will only grow as Gen Z’s spending power and influence increase every day, along with this new generation now driving consumer trends that influence the behaviors of older generations.

In the article, CNBC shared that according to a recent Deloitte survey, climate change and protecting the environment is the No. 1 concern for Gen Z, with unemployment and health care/disease prevention coming in at a close second. We’ve seen similar results from our State of Gen Z® annual study, as well as research we’ve led for clients in multiple industries.

Gen Z’s desire for sustainable products and businesses is robust and growing. In the Deloitte study, 73% of Gen Z consumers say they are willing to pay more for sustainable products—more than any other generation. Despite being the youngest generation, many of whom are still in school, 54% of Gen Z say they are willing to pay an increase upwards of 10% or more on sustainably made products.

Deeper into the Deloitte study, it shows that more than a quarter of Millennials and Gen Zs worldwide say that their buying decisions are being influenced by the impact businesses have on the environment—and their green practices. Gen Z is having an influence on companies and holding them to a higher standard. At The Center for Generational Kinetics, we expect Gen Z’s vocalness around this topic to only increase as their spending power grows (not to mention their ever-increasing voting power).

Beyond consumer spending with green companies, Gen Z wants to know that the companies they work for are environmentally friendly, from the supply chain and carbon footprint to volunteering in their local communities. This emerging generation wants their spending and their workplace to align with their values, and they are shifting their career and purchasing power choices to match. 

As the shift to a more sustainable economy takes place, if companies aren’t addressing sustainability, they are likely to face an increasingly difficult situation when it comes to both employing and selling to Gen Z. Failing to address Gen Z’s concerns about improving the environment won’t just put a company’s reputation and future revenue at risk, it will affect their future workforce as well.

As many companies are adapting to meet the demands and priorities of Gen Z to ensure their future, some companies are talking about their environmental improvement efforts in a way that may not be entirely accurate at best or, at worst, inaccurate.  

The act of inaccurately or deceptively talking about a company’s efforts toward sustainability or improving the environment is called “greenwashing.” This is when a company exaggerates its commitments or takes superficial actions to improve the environment to cover up much less environmentally-friendly behavior or priorities. Greenwashing appears to have grown as the focus on being environmentally friendly has risen, particularly with Gen Z.

″‘Greenwashing’ is very real and appears to be growing every day. The reason is that Gen Z — who is now up to age 25 — has made it clear that protecting the environment and combating climate change is a priority for them, not only as consumers but also as employees and even as shareholders and voters.” [Dorsey] said. “The combination of pressure and expectations from Gen Z as trendsetters along with a desire to ‘be greener’ is not only being used to cover up past actions by companies that harmed the environment but also as a reason to charge more for products.”

So how can you tell if a product or a company truly values being environmentally friendly and has its focus on sustainability? Transparency is the answer. It is easy to put a green tag on a product or use eco-friendly jargon about a service to entice consumers—but if a company doesn’t have transparent information to back up its claims, it might be worth taking a deeper look into its environmental-friendly actions and strategies. It’s clear that Gen Z will.

While our work at The Center for Generational Kinetics exploring Gen Z as emerging adults, employees, consumers, and trendsetters continues to evolve with the generation, one thing is sure: Gen Z has a deeply rooted passion for improving the planet and believes that companies of all sizes and industries can play a role. 

If you’ve enjoyed this perspective and are curious to know more, please check out our annual State of Gen Z® research study, which provides an interesting comparison of Gen Z to Millennials. You can also hire Jason as your Gen Z speaker!

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