Are Generational Divides Shifting Sustainable Demand?

Consumer demand is reshaping procurement strategies as sustainability becomes a key purchasing factor.

Companies are adapting their sourcing, production and logistics to align with changing preferences, ensuring their supply chains are more ethical and environmentally responsible.

A study from Vlerick Business School examines how different generations approach sustainable consumption.

It surveyed 24,798 individuals across 20 countries and Hong Kong, focusing on two brand types: those positioned as exclusive and trendy, and those committed to inclusivity and sustainability.

The research reveals that Gen Z consumers are far more likely than older generations to pay a premium for brands that prioritise sustainability and inclusivity.

Frank Goedertier, Professor of Marketing at Vlerick Business School, explains: “Traditionally, many companies have invested in creating brands that are perceived as ‘exclusive’ or trendy, luxurious, high-status.

"A core motivation for this is that there is the conviction that such brands trigger a high willingness to pay a premium.

“We wanted to find out whether positioning a brand around ‘inclusivity’ and a commitment to be sustainable and contribute positively to society, could nowadays also trigger such a consumer willingness to pay a premium, especially when targeting new generation Gen Z consumers.”

Sustainable sourcing and retail procurement

Sustainable sourcing involves selecting suppliers and materials that uphold ethical labour practices, minimise environmental harm and support long-term resource availability. Companies committed to this approach prioritise traceability, ensuring transparency and accountability across their supply chains.

The report indicates that women are more inclined to support sustainable and inclusive brands and are less willing to pay a premium for exclusive, high-status brands. This suggests ethical values often outweigh luxury appeal in purchasing decisions.

Fashion retailer H&M has embraced sustainability by integrating responsible materials into its supply chain. In 2023, 85% of its materials came from recycled or sustainably sourced sources, with a goal of reaching 100% by 2030.

Leyla Ertur, Director of Sustainability at H&M, states: "We continue our work with improving conditions for people working in fashion supply chains. As a global fashion retailer of our size and scale, we can and want to have a positive impact on communities that are connected or impacted by our industry.

"We can see the difference this approach makes already. Through the Future Supplier Initiative, which is organised by The Fashion Pact, we are working with likeminded brands on a project in Bangladesh to help shared suppliers reduce their emissions.

"We are currently onboarding suppliers to the project and the next steps will be to identify individual investments for the most impactful abatement measures on a factory level. So, we urge more brands to join forces in strategic levels to see what we can achieve together."

Logistics and distribution in a sustainable economy

Beyond sourcing, sustainable logistics is becoming a critical component of supply chain management. Brands are exploring ethical warehousing, carbon-neutral distribution and circular economy models to meet growing consumer expectations.

E-commerce company eBay exemplifies this shift through its commitment to re-commerce—the resale and repurposing of goods to extend product life cycles and reduce waste. By promoting second-hand shopping, eBay minimises the demand for new production, reducing environmental impact and fostering a more sustainable supply chain.

Jamie Iannone, President and CEO of eBay, states: “Creating a more sustainable future has been a cornerstone of eBay for more than 25 years.

“As longtime champions of re-commerce and the circular economy, we are leading the way toward a healthier planet and a more inclusive economy.

“I’m proud of the progress we are making on our climate goals and the positive impact this has on our planet. Today, eBay is leveraging new technologies more than ever to create trusted experiences for customers to sell and buy pre-loved goods.

"Our team is committed to helping people make meaningful choices about how they shop and do business. Together, we are building a better future for our global community.”

Regional variations in consumer preferences

Consumer willingness to pay for sustainability varies across regions. The study highlights:

• South Korea and Singapore show the highest demand for sustainable and inclusive brands
• China, South Africa and Thailand favour on-trend, exclusive brands
• European countries show the least willingness to pay a premium for sustainable and inclusive brands

As demand for sustainability grows, companies must refine their sourcing and procurement strategies to remain competitive. Aligning supply chains with ethical, environmentally responsible practices will be essential for brands looking to engage future consumers.

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