Green Consumer Confidence Index Reveals Reserve, Optimism

The Green Confidence Index, a monthly index designed to measure Americans’ confidence in the green efforts of leaders and institutions and track the change in consumer understanding of green issues and their willingness to buy green, launched today. The index creators say it is the first comprehensive monthly tracking of consumers' green attitudes and purchasing.

The initial results are no surprise: Green product purchases remain flat due to the anemic economy. But confidence in all things green rose slightly in September.

The Index was produced by GreenBiz.com in partnership with marketing research firm Earthsense, and national polling company Survey Sampling International. It is based on a monthly survey of more than 2,500 adults who are nationally representative of the U.S. adult online population and calculated using responses in three areas:

1. Responsibility: Consumers rate how well various groups are addressing environmental issues, information. Groups include the U.S. government, state and local governments, major corporations and the respondent’s own employer, neighbors and self. Each is rated on a simple scale including too much, enough or too little.
2. Information: Respondents report whether or not they feel they have enough information environmental issues and solutions to make informed decisions when both “small ticket” items (groceries, personal care, apparel, household care, office supplies) and "big ticket" items (household appliances, electronics, and cars), as well as when voting and investing.
3. Purchasing: Respondents report on green purchases made over the past year as well as anticipated green purchases over the next 12 months for the same categories specified under Information.

Each area is assigned a weighted score: responsibility at 40 percent, information at 20 percent and purchasing at 40 percent for a total confidence score based on an index of 100.0 set in July 2009. A score above 100 indicates increased confidence, while a score that falls below 100 shows less overall confidence in the greening of America. Today’s report shows consumer confidence stands at 103.8 at the end of September.

The Index provides a broad view of environmental perceptions in the U.S. and more important, it provides a regular sampling of data making it possible to spot changes in consumer attitudes over time. By surveying monthly, the Green Confidence Index can illuminate real-time shifts and nuances that annual or occasional studies can't see.

For example, appliance manufacturers, retailers and U.S. Department of Energy, may find it valuable to use the date to determine the impact of its upcoming Cash for Appliances program, the follow-up to the government’s automobile rebate program, which generated 700,000 new car sales between July 27 and August 24.

The federal government is preparing to roll out Cash for Appliances, a $300 million program offering rebates to buyers of more energy efficient appliances and other products with the Energy Star label. Each state is responsible for managing its program. New York will be one of the first to launch the appliance program, scheduled for Feb. 12 – 21, California and Florida will start later in the spring.

Joel Makower from Greener World Media said, “It [The Green Confidence Index] will provide a reality check for green optimists and pessimists alike: tracking the mood of Americans while shining a light on the faith they put in business, government, and other institutions to address our environmental challenges -- and how, and how well, those institutions are perceived to be doing their jobs.”

Consumer confidence rose slightly in September, and the report indicates consumers are looking ahead to a better economic climate come 2010. Major findings:

1. Consumers have higher perceptions of the efforts of themselves and their employers. Half feel they are doing enough, but say that only 22.7 percent of major companies (exluding their own employers) are doing their fair share.
2. Green information is seen as being more readily available for energy-guzzling products such as vehicles (58.7 percent) and household appliances (56.6 percent). No surprise there, with the run of the government’s Cash for Clunkers rebate program during the summer and the publicity surrounding its follow-up appliance program.
3. Green product purchases remain flat. The biggest barrier to purchasing green items is cost. In the present economy, consumers have tightened their belts, and even environmental concerns can’t overcome the harsh reality of shrinking spending for 41 percent of the respondents. But consumers are hopeful for better times in 2010. More than three in five who haven't purchased green say they are considering doing so in the coming year.

With consumers looking forward to 2010, retailers are right to be cautious about the upcoming holiday shopping season. Although the Consumer Electronics Association, predicts an eight percent rise in electronics purchases, research firm NPD Group Inc. recently released their annual Holiday Retail Outlook 2009. The verdict: Consumers intend to spend four percent less this holiday season over last year, and will spend a mere one percent more on electronics. Even green can’t save Christmas.

• The Language of Going Green