How will the economic slowdown affect
the green consumer?
􀂄 Conventional wisdom holds that green sentiment is a luxury
Increasing consumer awareness and commitment to green issues over the past
couple of years has led to changing spending patterns and high growth rates in
these areas relative to the overall market. However, conventional wisdom holds
that green sentiment is a luxury, affordable when times are good, falling down the
list of priorities as economic reality bites. Hence, in this report, we ask ‘how will
the economic slowdown affect the “green consumer”’?
􀂄 UBS survey of G7 countries supports green/cost synergies
We have engaged the expertise of the UBS sector teams most likely to be impacted
by green consumer trends. We also present the results of a UBS proprietary survey
of consumer attitudes towards green concerns. In total, we asked 2,800 respondents
across the G7 about their attitudes, in the following broad segments: transportation;
food and consumer goods; financial products and household energy. We suggest
that the results highlight an increasing synergy between green and cost savings.
􀂄 Sustainability a key theme for 2009
In our view, the impact of the slowing economy will lead to differentiation
between ‘green themes’, towards a focus on both environmental and financial
sustainability. We anticipate a move away from costlier green options in favour of
products and services involving lower resource use, less waste and greater energy
efficiency, which can thereby lower costs to the consumer.
􀂄 Green consumer still drives growth, but investors need to differentiate
The best-placed firms are those for which ‘greening’ leads to corporate cost savings
and consumer price savings. They include: retailers with innovative energy efficiency,
recycling and packaging systems such as Kroger, Wal-Mart, Church & Dwight and
Tesco; energy-saving technology groups like Hewlett Packard and Tandberg, and
innovative auto firms making energy-efficient value cars, such as Honda.

Contents page
Executive summary 3
— What do we mean by Green?...............................................................................3
— Sustainability – a key theme for 2009...................................................................4
— Green sentiment: A luxury we can no longer afford? .......................................................4
— Preferred stocks...................................................................................................6
Green economics 8
Green consumption in an economic slowdown 9
— Consumer spending in the good times .................................................................9
— Consumer spending in a credit crunch ...............................................................10
UBS consumer survey: Summary and sector round-up 12
UBS survey of consumer attitudes 13
Sustainability as a business driver 17
— Sustainability an internal strategic priority...........................................................17
— Green not just for green’s sake ..........................................................................18
All companies: Green consumer list 20
Green themes by sector 23
Transport 24
— Autos .................................................................................................................24
— Results of green consumer survey: Autos ..........................................................26
— Airlines...............................................................................................................30
— Green consumer survey results: Airlines and holiday travel................................33
Leisure 37
Food, beverage & consumer products 39
— Food retail..........................................................................................................39
— Consumer beverages.........................................................................................44
— Green consumer survey results..........................................................................50
— Retail case studies.............................................................................................52
Packaging 55
— Packaging and the green movement – volume vs content..................................55
Green household & personal care 56
— Compaction in US liquid laundry detergent.........................................................56
— ‘Natural’ products ...............................................................................................57
— Green consumer survey results..........................................................................58
Finance 63
— Global SRI Investing ..........................................................................................63
— SRI investors......................................................................................................66
— Green consumer survey results..........................................................................67
IT 69
Energy 70
— Case study: Centrica..........................................................................................70
— Green consumer survey results: Energy and consumer electronics....................72
Environmental KPIs for preferred stocks 80