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By Kim Sung-woo
What was the most popular search term in 2022? Perhaps many would think "Extraordinary Attorney Woo," the Netflix top-chart Korean drama, or "Qatar World Cup." Surprisingly, the answer was "climate change." Announcing that the No. 1 search term of the year was "climate change," Google Korea noted last December that environmental issues have been garnering increasingly more attention from the public.
The third-most popular search term was "ultra short-term rain forecast," a weather service provided by the Korea Meteorological Administration that predicts precipitation only six hours ahead. The top search terms suggest that a lot of people hit by heavier rains, typhoons and forest fires in 2022 were perhaps realizing that climate change was to blame. (For those who are wondering, "Extraordinary Attorney Woo" ranked second.)
The search terms were ranked based on how much search traffic increased for the particular term compared to the previous year. We can see that the number of people, who are becoming increasingly alarmed by climate change and calling for actions to address the climate crisis, has also significantly increased compared to the past. In particular, corporate players have never been under more pressure before, with Millennials and Generation Z (collectively known as the MZ Generation or "MZers") rising as the next generation of consumers.
The MZ Generation accounts for more than a third of the Korean population. Compared to older generations, the MZers tend to be more sensitive to the climate crisis as they have first-handedly witnessed abnormal climate events such as heavy typhoons, rains and forest fires more often than the previous generations.
Their fear is reinforced and multiplied via various social networks they connect to, where they can easily share their experiences and thoughts on climate issues. This experience often leads young consumers to think about why this crisis is taking place and what they can do to address it, such as reducing carbon emissions. Turning their eyes to the things in their vicinity, MZers started posing questions on whether various products they use on a day-to-day basis are actually environmental-friendly.
According to Deloitte, a global accounting firm and consulting advisor, the MZ Generation's consumer spending in the Asia-Pacific region is expected to reach $32 trillion by 2030. This generation's tastes determine the future direction for many companies' business. When buying a car, for example, MZers would think about the carbon emissions of the car and would want to minimize aggravating the climate crisis by choosing a model with the least amount of carbon emissions.
A Korea Consumer Agency survey of 1,000 consumers that was released last September supports this observation. Of the 737 respondents who said that environmental assessment information from the Korea Consumer Agency helped them select and purchase eco-friendly products, 588 (79.8 percent) indicated that they took into account how environmental friendly the product is prior to purchasing it, because of the potential to "contribute to protecting the environment."
In addition, according to the survey released by the Korea Chamber of Commerce and Industry in the same month, 60 percent of survey respondents expressed that they highly regarded companies' efforts to develop eco-friendly technologies and products. These surveys indicate that environment-conscious consumers' perception on whether or not a particular company is a "green" company may depend on the products sold by the company. This consumer behavior drives companies to respond to climate change through eco-friendly (i.e., low-carbon) products.
Some consumers go the extra mile. To make sure that products they use are eco-friendly throughout the life cycle of the products, these consumers check whether the products' ingredients or parts are also environmentally friendly and whether the products have any negative impact on the environment during their use. Taking an example of a car again, they would check how eco-friendly the vehicle's steel plates are (which is determined even before the car manufacturing processes begins), and how eco-friendly the vehicle would be while he or she actually drives it (post-sales experience).
The ever-increasing concern about the climate crisis among consumers was why Unilever, a global household goods company, has already declared in 2020 its commitment to net-zero carbon emissions for all of their products by 2039, and announced in March 2021 a climate change action plan to share carbon footprint information with consumers for all products sold.
Companies should adapt to changes in their market environment. In the past, emissions from factories were blamed for most of the carbon emissions and climate crisis. Now, we are at the stage of reducing "product emissions." Reducing the product's life-cycle emissions will require reducing the factory emissions as well. In the past, carbon reduction was part of companies' cost-saving strategy. However, now and going forward, low-emission products can directly contribute to the companies' bottom line by increasing their sales volume.
Predicting the future has never been easy. None of the Korean companies invented smartphones or has predicted in advance that smartphones will change every aspect of our lives. Notably, however, the world's largest smartphone seller for the past 10 years is a Korean company. Korean companies must strive to develop low-carbon products as their next competitive advantage, as it is obvious that the MZ Generation will continue to demand products that inflict less pain on the earth or the generation's future life.
Kim Sung-woo is head of the Environment & Energy Research Institute at Kim & Chang.
