AUCKLAND, Today: New research shows the sustainability surcharge is officially dead, with consumers across Australia and New Zealand rejecting the idea that they should fund corporate green efforts through higher prices.
A study of more than 2,200 people found 65% of Australians and 63% of New Zealanders want businesses to absorb sustainability costs through profit, not pass them on. Only a small minority think shoppers should pay.
Even more telling, 74% of Australians and 66% of New Zealanders support government action if companies won’t move voluntarily, signalling real regulatory pressure for brands waiting too long.
The findings challenge a decade of purpose-led marketing. Outside the most sustainability-driven audience segment, sustainability ranked fifth or lower against price, quality and other practical product benefits.
“This research exposes a fundamental miscalculation in how Australian businesses have approached sustainability pricing,” says Matt Thomas, Founder of Stake: The Reputation Company. “CMOs have been building strategies on consumer sentiment that no longer exists.”
“This research exposes a fundamental miscalculation in how Australian businesses have approached sustainability pricing.” – Matt Thomas, Founder of Stake
The study by Stake and research consultancy Palladium Insight used MaxDiff analysis to force real-world choices between product attributes, revealing what people prioritise when trade-offs matter.
“We’re measuring what people actually choose when forced to trade off,” said Steph Karayannis, Palladium Insight Founding Partner. “And the gap between stated values and revealed preferences is enormous. People care about sustainability until cost or product quality intervenes.”
“Even consumers willing to pay more for sustainability cap their tolerance at 4-5% on average – barely enough to cover the cost of green certification, let alone meaningful operational change,” explained Karayannis.
With cost-of-living pressure mounting, affordability is the main barrier for 47% of Australians and 55% of New Zealanders, reshaping how businesses think about sustainability strategy.
“The question for CMOs is no longer ‘how do we monetise purpose?'” Thomas said. “It’s how do we embed sustainability without triggering consumer backlash or regulatory intervention?'”
“As start-ups, we’re building our practices around the problems clients are actually facing, not historical models.” – Steph Karayannis, Palladium Insight Founding Partner
The research mapped trust across 15 industries, revealing which sectors face the biggest credibility gap:
- Grocery retail: 70% say sustainability is important, but only 22% trust the industry to use premiums responsibly (67% importance vs 14% trust in NZ)
- Mining: 79% importance rating, 19% trust – the worst gap of any sector (77% importance and 11% trust in NZ)
- Energy: 80% importance, 21% trust (83% importance and 19% trust in NZ)
- Technology: 67% importance, but 22% trust (67% importance and 16% trust in NZ)
“High expectations plus low trust equals regulatory exposure,” says Karayannis. “These sectors face the greatest pressure to redesign their approach before government forces their hand.”
Stake and Palladium created the study after seeing brands invest heavily in sustainability credentials but struggle to turn them into real trust or commercial value.
“As start-ups, we’re building our practices around the problems clients are actually facing, not historical models,” says Karayannis. “This research provides CMOs and communications directors with the empirical foundation to redesign their approach before the market punishes them for getting it wrong.”
“The era of sustainability as brand theatre is over,” says Thomas. “Businesses need to shift from premium pricing strategies to operational embedding of sustainability, funded through margin absorption and efficiency gains, rather than consumer surcharges.”
“The businesses that understand this early will define competitive advantage in the next five years. Those that don’t will face forced compliance at much higher cost,” he concluded.
- More info here: stakereputation.com/unwillingnesstopay
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