Japan ESG Consumer: New values & social impact importance spread, led by Gen Z

Following one in 2020, UBS Evidence Lab conducted another ‘Japan ESG Consumer PulseCheck’ survey of 1,000 consumers nationwide. Given the high level of market interest in the previous report, survey questions were updated and time series analysis and overseas comparisons were added. Conscious consumption (i.e., taking into account environmental and social impacts) among Japanese consumers is growing steadily, led by Gen Z consumers. For consumption related companies, we think enhanced ESG measures will lead not only to higher valuations from investors and support from consumers long term, but also directly to corporate value.

The results of this survey both confirm the increasing importance of environmental and social considerations as factors in making consumption decisions and also show a trend from the previous survey of willingness to pay higher prices for products that are eco-friendly and socially responsible. In particular, the average price premium for social responsibility rose from +7.7% in 2020 to +9.0% in 2021, and from +12.5% to +13.9% among young people. Consumers may be requiring more from companies in terms of their social impact with Covid.

In the latter part of this report, we examine implications for related industries from various angles, including from the perspective of ESG-related efforts by individual companies and assessments of those efforts. In particular, we examine the retail industry, the foods industry, consumer products, small  and  mid-cap  stocks, and the financial industry.