Until the pandemic, I enjoyed hitchhiking as a way of meeting interesting and often generous likeminded folk happy to share their stories, as well as their cars or trucks, and talk about life, religion, politics and other subjects we generally try to avoid for fear of falling out with people we would rather not fall out with. Meeting people you’ll probably never meet again brings with it unique opportunities for genuine dialogue and exploration. In these post-pandemic times you don’t see people hitching lifts. I’ve also given it up… for the time being.
My new version of hitching is staying in traditional bnb’s. Basically a room in someone’s house and an opportunity to chat. A bit like hitchhiking, but it costs money and hopefully you get a good night’s sleep – and possibly breakfast!
The other day, I stayed with Abigail, a 70 year actress who many of the older generation will remember. She lets a room in her lovely home for wandering travellers like myself. At this point, I hear cry’s of “what’s her age got to do with anything!?”. Well, I think there is a general perception that concern for the environment is largely restricted to the younger generation and that’s just not true. This is evidenced by Ayres Punchard’s clients who range in age from their 20’s well into their 80’s and 90’s, with the majority over the age of 60.
Our conversation inevitably turned to the environment, as my clients will attest they often do! She told me that she and her circle of friends are actively trying to make changes to their lifestyles and really want to do all they can to stop climate change and generally do right by the world. But, and here’s the rub, they often feel shame, regret and moreover guilt about the goods and services they buy, and their desire to travel the world, all of which they perceive as conflicting with their sense of what urgently needs to be done to call time on climate change.
The illusion of choice
Living with this sense of intrinsic conflict is the reality for most people. We call it ‘consumer choice’ and I want to say, it is an illusion.
Decisions about what car to buy or whether to fly for a holiday have become a source of great guilt for many people. Our choices as consumers constantly conflict with the messages we get regarding the environment. We are being made to feel guilty and, worse still, are beating ourselves up and becoming depressed. Climate anxiety is very real for a lot of people and it’s only getting worse.
I feel this anxiety too, but my rational response is that we mustn’t feel guilty because, as I say, consumer choice is largely an illusion. Virtually every buying decision we make will have been influenced by the marketing efforts of one sort or another. We’re being sold things almost every second of the day, and most of us don’t even know it’s happening. Sometimes the culprits are whole industries, sometimes governments or other organisations. The one thing they all have in common is a total lack of responsibility for what they manufacture and sell to us. I mean that corporately as well as personally when it comes to their executives and senior leadership.
From no-win to win-win
In our world of sustainable finance we call the environmental and human cost of commercial and industrial activity, externalities. That is to say, the costs that these corporations, and others, do not actually pay, despite those costs arising as a result of their money making activities. They instead offload these externalities onto us, the consumers. They blame us for our choices, leaving us to feel guilty for their corporate externalities, and charging us with the financial costs through higher taxes, insurance premiums and raised healthcare costs.
Consumers even suffer the burden of correctly recycling their waste in accordance with a bewildering postcode lottery of rules and regulations that make everyone’s recycling different depending on where they live. Overall it’s a no-win situation for consumers, and win-win situation for those who profit from the situation. Governments are free to lay the blame at someone else’s door having contracted the private sector to profit from our guilty consumer choices.
If this sounds somewhat glib, then please let me explain…
29th October 2019 found me at the first sustainability conference organised by the world’s leading professional society for finance professionals, CFAUK (Chartered Financial Analysts UK). The unfortunately titled ‘ESG Conference’ had some impressive speakers, including the then Governor or the Bank of England, Mark Carney.
The reason this is notable is that this was happening over 4 years after the legally binding Paris Climate Accord had been signed in 2015, and after decades of climate damage had already been inflicted on the planet as a direct result of human industrial activity, often financed by members of the CFA and the companies they work for. This was not lost on those of us who have been involved in sustainable finance for most of our careers and are also proud members of the CFA.
The 1.5ºC limit agreed at the Paris Climate Accord was largely ignored by speakers whose large financial institutions had already decided that the 2ºC limit set by Paris as an absolute maximum was a more ‘realistic’ target and one they could work with, even if humanity (chiefly those in the Global South) will struggle to live with the consequences.
A short aside
Before I move on to my main topic of ‘consumer choice’, let’s first remind ourselves about what was agreed at Paris, directly from the horse’s mouth:
The Paris Agreement is a legally binding international treaty on climate change. It was adopted by 196 Parties at the UN Climate Change Conference (COP21) in Paris, France, on 12 December 2015. It entered into force on 4 November 2016.
1. This Agreement, in enhancing the implementation of the Convention, including its objective, aims to strengthen the global response to the threat of climate change, in the context of sustainable development and efforts to eradicate poverty, including by:(a) Holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change;
(b) Increasing the ability to adapt to the adverse impacts of climate change and foster climate resilience and low greenhouse gas emissions development, in a manner that does not threaten food production; and
(c) Making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.
From the Paris Agreement, United Nations (2015)
Now, let us for a moment reflect. If a law was passed to make it illegal for ordinary folk like you and me to kill people, and we then spent three years ignoring that new law, blithely murdering all and sundry, and only decided to take it just a tiny bit more seriously after that, we should not be surprised to find ourselves in jail for quite a long stretch.
Not so the global business community, led by the global bankers and their professional bodies. Paris 2015 was the law that time forgot, until 2019. And even so, since then it hasn’t really caught on. To say it’s not popular would be an understatement.
It’s all the fault of consumers
During the conference, a number of speakers, possibly the same ones who held on to 2ºC as their preferred temperature with which to cook the planet, used ‘consumer choice’ as the number one reason why manufacturers and service providers were finding it hard to comply with Paris. It’s all the fault of consumers. If they didn’t keep demanding such polluting goods and services, we would not need to produce them and we could all rest easy in our beds at night.
Marketing budgets are big for a reason: They work to drive up sales, increase revenue, and direct spending to the most profitable products. Another institute, the Institute of Practitioners in Advertising (IPA), reported that “Total UK marketing budgets were revised up to their strongest level in almost a decade in Q4 2023”. Their Director General, Paul Bainsfair said: “on this point, with the evidence showing that investing in advertising helps protect sales when businesses raise prices, it may prove more profitable for companies to increase their advertising than reduce their pricing.”
Most consumers haven’t got a clue when it comes to the right sort of toilet paper to buy or which car to buy. This is a evident from the vast numbers of toilet paper brands and car makes and models out there. These are mostly controlled by just a few monopolistic corporations such as Unilever and Ford and their marketing budgets are equally vast.
Austerity, what the Tories quaintly called (or marketed as) the cost of living crisis, and what has now been rebranded by Labour as “securonomics”, has compounded the lack of choice available to consumers. It has also encouraged manufacturers and retailers to rely even more heavily on transferring those externalities to consumers, driving up profits whilst at the same time blaming consumer choice for the products they sell.
A far better candidate for the blame in this regard is the corporations themselves who are squeezing more and more margin out of their products. British Gas is a very good example of this, with a 700% increase in profits over the last year as consumers ‘chose’ to buy more and more expensive gas and electricity. Tesco is much the same in this regard.
Modern economics and politicians of most complexions, in a weirdly paradoxical acknowledgement of Marx’s theory of capital, portray the problem as one of greedy employees (labour) demanding higher and higher wages from employers (capital), who are just trying to do the right thing to prevent those pesky workers from pushing up the cost of everything, AKA the cost of living.
Of course, what employers are doing, is trying to protect their margins (profits). The transfer of external costs of production to everyone else but themselves is simply an extension of this.
Marketing: a responsible job
Marketing is actually a career and in the UK it has it’s own chartered institute, the Chartered Institute of Marketing. Sales also has its own institute. It is possible for those with the right qualifications and skills and experience to become chartered members of the Chartered Institute of Marketing (CIM). They have the responsible job of ensuring that each and every one of us spend every last penny on their companies’ products.
A current CIM webinar for their members is titled: ‘How to use neuromarketing to predict consumer behaviour’. Exactly what ‘neuromarketing’ is will no doubt be fully explained by the webinar. Even my spellcheck dictionary doesn’t know the definition of this newspeak terminology. According to the webinar’s blurb, “Your customer’s brain is a complex and unpredictable thing. Neuromarketing techniques and advanced neuromarketing technology can help decode how the brain interprets and responds to certain stimuli, enabling marketers to predict the reactions and outcomes of their campaigns.”
Where possible, companies will facilitate borrowing in order to achieve this important objective. Credit cards and personal loans are made available by bankers, many of whom are my colleagues in the CFA and CISI, to make sure we continue to consume. After all, what else are consumers for, if not to consume?
Looney’s cash machine
British Petroleum’s Bernard Looney famously described his company as a cash machine. In August 2022, the Mail reported:
“The boss of BP – which today reported profits had hit a 14-year high of £6.9billion – is said to be a ‘woke’ workaholic who last year took home £4.5million in pay. Bernard Looney, who rose through the ranks after joining as a drill engineer in 1991 to become CEO in 2020, could now be in line for an £11.7m pay packet – just as households across the country struggle amid a cost-of-living crisis. Irishman Looney, 51, who once called BP a ‘cash machine’ is often referred to as a ‘company man’, and boasts about his ‘green credentials’, commitment to diversity and humble beginnings on a dairy farm in Kerry.”
I think you get my drift! If even the Daily Mail is saying it, then it must be true.
But are we listening? Possibly, but it seems more likely that we’re not. The fact is, we like consuming things. The difficulty is, we consume what we’re given and what we are told is good for us. We’re told by marketing professionals what is right for the planet and the rest of humanity, even if nothing could be further from the truth. Companies hard sell their products and they always have, because that is their job. They are not there to save the planet or be nice to people unless there is profit involved.
That some of that profit might find its way into our pockets as shareholders (through our personal pensions and ISAs) is almost superfluous. It ignores the damage done in producing the goods and services the company misleadingly tells us we need. That damage (the externalities) ultimately becomes a problem for consumers. The only time it doesn’t is when it ends up being exported to countries in the Global South that don’t have the economic power to say no, or the legal ability to fight back.
Corporations have now become so large that they rival countries. Countries that have fought back against these corporations have found themselves in court, being sued or threatened for passing or even just considering passing laws. These laws would be in the best interests of citizens, but would be problematic for the companies that want to export their externalities into these countries.
Why do we believe it’s our fault?
Consider the alternative. Consider that we, hypothetically, have no choice, no free will. We lack agency. We’re passengers. Someone else tells us what to do and we do it. We’re hoodwinked, fooled, misled, taken for a ride. We’re told a pack of lies and we believe it. Idiots! Stupid idiots!
It’s like something out of a horror movie. It simply can’t be true. This can’t be happening, and we refuse to believe or accept it. Nobody likes the idea that they aren’t in control of their own life. So we pretend that we are in control. But the reality is that bad things keep happening and it’s not your fault because you literally have no choice.
Who can afford to be without a car? Who can afford to buy electric? Who can afford to lose their home? Who can afford their mortgage or rent? Who can afford not to eat? Who can afford ethically sourced organic produce? Who can afford not to be clothed? Who can afford ethically produced organic cotton and bamboo training shoes? We’re told how we should ideally live our lives, and then we’re told what’s financially possible.
We do what’s right for us in the end, given our financial constraints and the products and services offered by companies. We are then blamed by companies and governments for the consequences, even though it’s them who write the rules, construct the system and expect everyone else to comply with their “difficult choices”.
I’ll say it again, consumer choice is an illusion. You shouldn’t feel guilty, you should feel angered and encouraged to take action. With Ayres Punchard, and our new company Antithesis, we hope to help play a role in leading this action.
Chris Welsford, September 2024
