What Green Professionals Need to Know About LOHAS 1

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Tuesday, November 10th, 2015
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If you are in the green building or product sector, whether you know it or not, your business depends on the behaviour and potential of a large and diverse group of people characterised by market researchers as the LOHAS sector.

LOHAS stands for ‘Lifestyles of Health and Sustainability’ and it is fundamentally the key driver behind increased demand for green properties and products.

It may be the biggest market you most have never heard of. In Australia alone in 2015, it is worth $26 billion, more than doubling from $12 billion since 2007, and it is projected to be worth $30 billion by 2017.

When you peel back the layers, the major driver in the green property sector has been the increase in shareholder value due to the increased value in green assets held. This has been primarily because of the ‘greening’ of finance and the stock market, due to bpth demonstrably better returns and demand created by Superfund portfolios preferring to invest in future-proofed investments.

More recently, we have seen the launch and strong performance of green bonds. This was largely due to increased stock market values generated in large part by shareholder and member activism that created the momentum for major property trusts, banks and portfolio holders to move toward sustainability as they saw shareholder value climbs as a consequence of early actions.

Share value climbs as companies engage more deeply with sustainability because more people intentionally buy shares that are good for people and the planet. As more people enjoy occupying buildings and using products that are good for their health and don’t trash the planet, rents and lease values rise, asset values rise, assets retain their value longer, all because of ‘people power.’

These people are the heart and core of the LOHAS sector; people living their lives, creating businesses, engaging in jobs, occupying buildings and buying products all based on their values and exerting intentional innovation, purchasing or increasingly intentional sharing. They don’t come from any particular demographic sector age or ethnicity; they are truly across all age groups. They are characterised by a shared set of values and, whether we know it or not, we in the green building sector are almost certainly amongst the group ourselves if we put into practice what we preach to our clients.

The key data that defines the LOHAS sector has been mapped as a result of extensive social research globally, and in Australia specifically by the Mobium Group and their team of researchers led by Nick Bez and Andy Baker. Mobium’s Living LOHAS reports were first published in 2007 and then in five separate reports since then. Mobium surveyed over 40,000 Australians on 250-plus measures related to values, attitudes, behaviours and consumption patterns, and has undertaken over 850 in-depth discussions with individuals in their homes, workplaces, leisure and educational environments.

The 2015 Living LOHAS report provides a detailed review and analysis of the Australian consumer market for healthier, more sustainable products and services from 2007 through 2015. The rapid doubling of growth despite the GFC is spread across a wide range of consumer product and service categories. Many LOHAS products have outperformed their conventional competition over the study period.

The Living LOHAS report shows the major environmental concerns, values and attitudes toward sustainability issues and actions at a personal, community, business and government level. It also looks at market composition, size and growth; consumer segmentation and participation rates; roadblocks to further uptake and key barriers; and it provides an understanding and awareness of eco-labels and certification marks. The insights generated provide an unparalleled depth of understanding about the motivations of Australians to engage in healthier, more sustainable lifestyle choices.

One of the key Mobium findings is that LOHAS consumers are very suspicious of manufacturer claims. They are sick of greenwash. They want to support businesses (buildings) and products that can prove to them that they are genuinely healthy, ethical and good for the planet, but look to ‘trusted advisors’ to support their decision-making. This translates into an increasing demand for third party certification and ecolabels.

Look at the explosion of eco-labels, social trust marks and environmental logos in the product sector and especially for high volume products with strong ethical issues attached, such as FairTrade, Rainforest Alliance and Responsible Palm Oil by the likes of Starbucks, McDonalds, Unilever, Cadburys, Mars, Nestle and others. The majority of shoppers support stores stocking products that use eco-labels, generating an implicit expectation of retailers to stock products with eco-labels if they are choosing to sell products that make environmental claims. Certified product sales have over five times as much growth as uncertified products in those sectors. This is because consumers have been educated by those brands and understand the meaning of the labels.

Whether we realise it or not, this behaviour and the views of the LOHAS sector have translated into the building sector and are what has underpinned the rise in labelling schemes for buildings and other kinds of assets such as Green Star, the Infrastructure Sustainability Tool, EarthCheck, EnviroDevelopment, LEED, WELL, Living Building Challenge, One Planet Living and so on.

These schemes rely on third party certification out of a need for the schemes to be able to rely on independent assessment of environmental and health claims. They do so for the same reason that LOHAS consumers do, they have been burnt by ‘greenwash’ by product marketeers.

One of the most interesting facts about the LOHAS sector is that they have a strong intention to buy healthy and green products and services. There is, however, a disconnect between their intention to buy and their actions, namely the rate at which they do buy such products and services. The ‘gap’ to purchase is centred around distrust, confusion and a lack of understanding how, or on what information to base their decision making. Ecolabels and Trust Marks are a key solution to this barrier.

Product certification schemes that use quantitative scientific metrics like life cycle analysis (LCA) to underpin the awarding of the Certification Mark and that have been through formal assessment processes by the Australian Competition and Commission (ACCC) have the potential to stand out in the space as the kind of true ‘Trusted Advisor’ the LOHAS sector seeks.

What is needed now is for manufacturers to stop thinking that consumers and professionals don’t care, because a very large sector of the market does. They just need to have widespread access to, be educated about, and be made aware of the tools available to them. As professionals and producers, you have a critical role to play in educating your clients about what Certification and Trust Marks are, how they work and how to use them.

If you do, you will benefit; it will be the key to seeing your business grow. The LOHAS market is massive and largely untapped except for the food sector. Jump in with both feet!

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  1. Mary

    This article is interesting but it should be indicated that the writer, David Baggs, is the CEO of Global Green Tag, as he does the promotion of his product in his article.