65% of consumers want to shop sustainably, but only a quarter actually do so. What can be done about this?
We reprinted this article from Harvard Business Review and supplemented it with additional facts
At first glance, it seems that there has never been a better time to launch a sustainable product portfolio. Consumers—especially millennials—are increasingly saying they want brands that support their social mission and sustainability. In fact, a recent report revealed that certain product categories with sustainability claims are growing at twice the rate of their traditional counterparts. Yet a frustrating paradox remains at the heart of green business: Few consumers who have a positive attitude toward eco-friendly products and services actually back that up with their wallets. In a recent survey 65% of respondents saidthat they want to buy purpose-driven brands that promote sustainability, yet only 26% actually do so.
Closing this "gap between intention and action" is important not only for achieving corporate sustainability goals, but also for the planet. Unilever estimates that nearly 70% of its greenhouse gas footprint depends on which products customers choose and whether they use and dispose of them in a sustainable manner—for example, by conserving water and energy when doing laundry or by properly recycling containers after use.
When we ask consumers whether they care about buying environmentally and ethically sustainable products, the overwhelming majority answer in the affirmative: In a consumer sentiment survey conducted by McKinsey in the U.S. in 2020, more than 60% of respondents said they would pay more for a product with sustainable packaging. A recent NielsenIQ study found that 78 percent of American consumers say a sustainable lifestyle is important to them. Yet many executives report that one of the challenges for their companies’ environmental, social, and governance (ESG) initiatives is the inability to generate sufficient consumer demand for these products. There are many stories of companies that launched new products featuring ESG claims, only to find that their sales fell short of expectations.
How can both of these things be true? Do consumers really care whether products include ESG-related claims? Do customers actually buy these products when they’re standing in front of store shelves or browsing online? Do their real-life purchasing decisions differ from their stated preferences? The potential costs—especially in the context of inflation—of manufacturing and certifying products that meet ESG claims are high. Accurately assessing the demand for products that feature these claims is essential for companies considering where to invest in ESG initiatives within their businesses. Companies should therefore seek to better understand whether and how these types of claims influence consumers’ purchasing decisions. Is a customer more likely to buy a product if an ESG claim is printed on its packaging? What about multiple claims? Do certain types of claims resonate more than others? Does a claim carry more weight if it’s attached to a more expensive product? Is it less significant if it comes from a large, established brand?
The good news is that academics have already learned a great deal about how to align consumer behavior with their stated preferences. Much of the research has focused on public interventions by policymakers, but the findings can be applied by any organization that wants to encourage consumers to adopt sustainable shopping and behavior. Based on a synthesis of these findings, we have identified five measures that companies should consider: leveraging social influence, fostering good habits, harnessing the domino effect, deciding whether to appeal to the heart or the mind, and prioritizing experiences over ownership.
Use Your Social Influence
In 2010, the city of Calgary, Alberta, faced a problem. It had recently launched a program called “grasscycling,” in which residents leave their grass clippings on the lawn to decompose naturally after mowing, rather than bagging them and taking them to a landfill. The city launched an information campaign about the program that highlighted its benefits: recycling grass returns valuable nutrients to the soil, protects the lawn, and helps the soil retain moisture. What’s more, this sustainable practice actually required less work on the part of the individual. But the initial adoption rate was lower than the city had expected.
Calgary was advised to try to change residents’ behavior through “social norms”—informal agreements within a social group about what constitutes acceptable behavior. Dozens of studies have shown that people have a strong desire to fit in and conform to the behavior of those around them. To harness this motivation, White and her colleague Bonnie Simpson collaborated with the city on a large-scale field study in which notes were left on residents’ doors: “Your neighbors ride their bikes on the grass. You can, too” and “Most people are looking for ways to reduce the amount of material that ends up in landfills—you can help by recycling your grass.” Within two weeks, this simple intervention led to nearly a twofold increase in the number of residents practicing grasscycling compared to the control group.
Harnessing the power of social influence is one of the most effective ways to encourage environmentally friendly behavior, including in consumer spending. Informing online shoppersthat other people are buying eco-friendly products led to a 65% increase in the number of people making at least one eco-friendly purchase. By informing cafeteria patronsthat it is the norm not to take too much food at once (and that it’s okay to go back for seconds) reduced food waste by 20.5%. The main predictor of whether people will install solar panels is whether their immediate neighbors have done so. And perhaps the most dramatic finding is that when college students were toldthat other commuters were giving up their cars in favor of more sustainable modes of transportation (such as cycling), they began using sustainable transportation five times more often than those who were merely provided with information about the alternatives.
Sometimes, however, social motivation can backfire. If only a few people engage in sustainable behavior, it may appear that it is not socially accepted, which can discourage others from adopting it. In such cases, companies can enlist advocates to promote the positive aspects of a product or activity. Advocates are most persuasive when they practice the behavior themselves. One study foundthat when an advocate explained why they had installed solar panels in residential buildings, 63% more people followed their lead than when the advocate had not actually installed the panels.
Social norms can also deter certain consumer segments. For example, some men associate sustainability with femininity, which leads them to avoid sustainable options. However, if a brand is already strongly associated with masculinity, this effect can be mitigated. For example, the Jack Daniel’s brand incorporates sustainability into many aspects of its business. Slogans such as “With all due respect to progress, the world could use a little less plastic” (accompanied by a series of wooden barrels) and “Even Jack Daniel’s waste is too good to be wasted” link sustainability with quality and great taste. Because the company sells byproducts and unused resources to other industries, it sends no waste to landfills. And whiskey fans can purchase used charcoal from aging barrels in the form of barbecue briquettes for home grilling, thereby reaffirming traditional masculine values. All of this underscores the company’s commitment to work ethic, the land, the air, and the community in which Jack Daniel’s operates. To maintain its status as a rugged, masculine brand, it has skillfully integrated sustainability into its existing branding.
Another example is that people who lean to the right on the political spectrum are sometimes less open to environmentally friendly behavior because they associate it with liberal political ideology. For example, in the United States, Republicans were less likely to purchase a compact fluorescent light bulb—which they knew was more energy-efficient than an incandescent bulb—if it was labeled “Protect the Environment” than if it was not.
The solution is for the messaging to resonate with Republicans’ political identity—for example, by appealing to duty, authority, and conformity to in-group norms. In one field study, Republican residents recycled more after being told: “You can join the fight by recycling alongside those who are like you in your community. Your actions help us fulfill our civic duty, because recycling is the responsible thing to do in our society. Thanks to people like you, we can follow the advice of prominent leaders when it comes to recycling. YOU CAN join the fight!” This appeal did not resonate as strongly with Democrats, who were more responsive to messages related to social welfare. Another approach is to focus on values shared by everyone, such as family, community, prosperity, and safety.
Consumers often have negative associations with sustainable products, which they perceive as being of lower quality, less aesthetically pleasing, and more expensive. In one example, when people evaluated a product’s durability—such as car cleaners—they were less likely to choose sustainable options. One way to counterbalance these negative associations is to emphasize positively perceived product attributes—such as innovation, novelty, and safety. For example, Tesla focuses more on the innovative design and functional features of its cars than on their environmental attributes—a message that resonates with its target market. This also helps overcome the concerns of some men that green products are “feminine.”
Social influence can be increased in three ways. The first is simply to make sustainable behavior visible to others. In some of Katherine White’s studies, people were asked to choose between an organic granola bar (which had the slogan “Good for you and the environment”) and a traditional granola bar (“A healthy and tasty snack”). When others were present, they were twice as likely to choose the organic option as when they made the decision in private. Other researchers have observed a similar effect with various products, ranging from eco-friendly hand sanitizers to high-performance cars. The city of Halifax, Nova Scotia, found that when residents were required to place household waste in transparent bags—making the contents of their trash (which often included items meant to be recycled or composted) visible to neighbors—the amount of waste sent to landfills decreased by 31%.
A second way to increase the impact of social influence is to publicize people’s commitments to eco-friendly behavior. For example, asking hotel guests to hang a card on their room door to indicate that they agree to reuse their towelsincreased towel reuse by 20%. In a similar study, hotel guests were asked to wear a badge symbolizing their commitment to participating in an energy-saving program, which increased towel reuse by 40%. And a study aimed at reducing vehicle idling time when picking up children from school asked some parents to place a sticker on their window reading, “For our air: ‘I turn off my engine when parked.’” This measure resulted in a 73% reduction in idling time.
The third approach is to harness healthy competition between social groups. In one example, the message was that another group of students was behaving in a way that was viewed positively (“We try to encourage students to compost. A recent survey found that computer science students are the most effective at composting compared to all other student groups”) led business students to compost their biodegradable coffee cups more than twice as often. When the World Wildlife Fund and its partner volunteer organizations sought to raise awareness of sustainable practices as part of Earth Hour, a global lights-out event, they initiated friendly energy-saving competitions among cities. The program spread through social media: From January to March 2018, 3.5 billion people mentioned it on social media, and during Earth Hour 2018 , nearly 18,000 landmarks turned off their lights.
Build Good Habits
People are creatures of habit. Many of our behaviors—such as how we commute to work, what we buy, what we eat, and how we dispose of products and packaging—are part of our regular routines. The key to promoting sustainable consumer behavior is often to first break bad habits and then encourage good ones.
Habits are triggered by cues found in familiar contexts. For example, the use of disposable coffee cups (a habit repeated an incredible 500 billion times a year worldwide) may be a response to cues such as the standard cup provided by a barista and a trash can marked with a picture of a cup, which are common in coffee shops.
Companies can use design elements to eliminate negative habits and replace them with positive ones. The simplest—and likely most effective—approach is to make sustainable behavior the default option. For example, researchers in Germany found that when green electricity was set as the default option in residential buildings, 94% of people stuck with it. In other cases, the introduction of eco-friendly options—such as reusing towels or receiving electronic bank statements instead of paper ones — has increased the use of more sustainable options. In California restaurants, , drinks are no longer served with plastic straws; customers must specifically request them. Another strategy is to make the desired action easier— for example, by placing recycling bins nearby, requiring less complicated sorting of recyclable materials, or by providing free public transit passes.
Three simple techniques can help foster positive habits: using prompts, providing feedback, and offering incentives.
Prompts can take the form of text messages that remind people to behave in a desired way—for example, to bike to work, go for a run, or commute using another eco-friendly method. Prompts work best when they are easy to understand and delivered at the location where the behavior takes place, and when people are motivated to engage in that behavior. In one study, simply placing prompts near recycling bins increased recycling by 54%.
Feedback sometimes tells people how they performed on their own, and sometimes compares their performance to that of others. Household energy bills that show how consumers’ usage compares to that of their neighbors can encourage energy savings. If a behavior is repeated—such as driving a car under various traffic conditions—real-time feedback, such as that provided to Toyota Prius drivers regarding fuel consumption, can be effective.
Adopting sustainable behaviors leads people to make further positive changes
Incentives can take various forms. In the United Kingdom, Coca-Cola is partnering with Merlin Entertainments to offer “reverse vending machines,” through which consumers receive theme park tickets at half price if they recycle plastic beverage bottles. Incentives should be used with caution, as the desired behavior may disappear if the incentives are removed. Another concern is that they may undermine consumers’ intrinsic desire to adopt certain behaviors. In a study published in the *Journal of Consumer Psychology* titled “Are Two Reasons Better Than One?”, researchers found that combining external incentives (“Save money!”) with internal motives (“Save the environment!”) led to a lower preference for a sustainable product than internal appeals alone. The authors hypothesized that this occurred because external motivation can “crowd out” internal desires.
Even when using these tactics, it is almost always difficult to break habits. Major life changes—such as moving to a new neighborhood, starting a new job, or making a new group of friends—may be an exception, however, because during such changes, people are more likely to consciously evaluate and experiment with their habits. One study examined 800 households, half of which had recently moved. Half of the participants in each group (half of those who moved and half of those who did not) received an intervention consisting of an interview, a selection of eco-friendly items, and information about sustainability. After the intervention, those who had moved were significantly more likely to engage in environmentally friendly behavior than those who had not moved.
Leveraging the Domino Effect
One of the benefits of supporting consumers in developing desirable habits is that it can have a positive side effect: Once people adopt one sustainable behavior, they are often willing to make other positive changes in the future. After IKEA launched a sustainability initiative called Live Lagom (lagom means “just the right amount” in Swedish), it conducted a detailed study of the path to sustainability among its core customer base. The company found that although people may start with a single step—such as reducing food waste at home—they often go on to take action in other areas, such as energy conservation.
IKEA also observed the snowball effect: People started with small steps and gradually worked their way toward more meaningful ones. For example, buying LED light bulbs can lead to wearing warmer clothes and lowering the thermostat, replacing curtains and blinds to reduce heat loss, insulating doors and windows, buying energy-efficient appliances, installing a programmable thermostat, and so on.
It is important to realize that negative spillover can also occur: Sustainable behavior can lead someone to subsequently act in a less sustainable manner. Researchers refer to this as “licensing,” which occurs when a consumer feels that initial ethical behavior gives them permission to act less virtuously in the future. In one example, researchers found that people who completed a virtual eco-friendly shopping task behaved less prosocially (they were less likely to help others by allocating resources in the game) than those who completed a virtual conventional shopping task. In other examples, people use more paperwhen they can show that they recycle, and they use more of a product (e.g., mouthwash, glass cleaner, or hand sanitizer) when the product is sustainable. Similarly, car models with higher fuel consumption may lead people to drive more kilometers, and more efficient heating and cooling systems in homes can lead to higher energy consumption.
Hope and pride can be particularly helpful in promoting sustainable consumption
Companies can take steps to reduce the risk of negative impacts. They can ensure that their first sustainability initiative is particularly strong, which appears to build commitment. If consumers are asked to make smaller commitments, it is better not to publicize these actions, as this can lead to what researchers call “slacktivism.” In one study, participants who engaged in symbolic support for a cause—thereby showing others that they were “good people”—such as joining a “public” Facebook group or signing an online petition—were later less likely to engage in a private task, such as volunteering for that cause. However, those who privately joined a Facebook group or signed a petition were more likely to view the cause as a reflection of their true values and to act on it. Note that this differs from the previous example of awarding badges to hotel guests who chose energy-saving options, because in this study, wearing a badge was explicitly linked to a commitment to take a sustainable action. Someone who views a symbolic initial behavior as a commitment to a cause often engages in fewer positive actions in the future.
Decide whether to speak to the heart or to the mind
The way companies communicate with consumers has a huge impact on the adoption of sustainable behavior. When marketers are preparing to launch or promote a product or campaign, they often have to choose between emotional appeals and rational arguments. Both can be effective—but only under certain conditions.
An Emotional Appeal
People are more likely to engage in a certain behavior if it makes them feel good. This fundamental principle is often overlooked when it comes to sustainability, where advertising campaigns tend to emphasize alarming warnings. Research has found that hope and pride are particularly effective in promoting sustainable consumption. Bacardi and Lonely Whale are fostering hope through their collaboration to eliminate one billion single-use plastic straws, using the hashtag #thefuturedoesntsuck to promote events and call consumers to action. And when people in one study were publicly praised each week for their energy-efficiency efforts—thereby instilling a sense of pride—they saved more energy than a group that received small (up to 5 euros) weekly financial rewards.
Guilt is a more complex emotional tool. Research by White and his colleagues suggeststhat it can be an effective motivator, but should be used with caution. In one experiment where responsibility was subtly emphasized (participants were asked to choose a product in a public setting), consumers reported that they expected to feel guilty in the future if they did not purchase eco-friendly products, and 84% of them chose fair-trade options. However, when an explicit appeal to guilt was used (“How can you enjoy a cup of tea when you know that the people who produce it are not treated fairly?”), they felt angry, upset, or irritated, and only 40% of them chose the fair-trade option.
In fact, numerous other studies confirm that eliciting a mild sense of guilt, sadness, or fear is more effective than trying to provoke a strong reaction. This research suggests that appeals for charity or good causes that use particularly emotional imagery (such as explicit images of suffering children) may not be as effective as those that are less intense.
A Rational Appeal
In 2010, Unilever launched a campaign to highlight the fact that, although the production of some types of palm oil leads to the destruction of rainforests, all of its palm oil is grown sustainably. The slogan “What you buy at the supermarket can change the world... Small actions, big difference.” The company drew on decades-old research findings showing that people are unlikely to behave as they do unless they feel what scientists call self-efficacy—the confidence that their actions will have a meaningful impact. One of the keys to marketing a sustainable product is therefore communicating what impact its use will have on the environment.
Although information about sustainable behavior and its results can be persuasive, how that information is framed is crucial, especially for products with high upfront costs and delayed benefits. Recent research has found that consumers who buy appliances or electronics typically do not think about energy efficiency—and even when they do, they are not as concerned with future energy savings as they are with the initial price. However, in a field study at a drugstore chain, labeling each product with its “10-year dollar cost” of energy increased purchases of energy-efficient products from 12% to 48%. Such labels are effective for three reasons: They highlight future consequences, present information in dollars (which consumers care about) rather than in energy savings (which often don’t interest them), and multiply energy costs by ten.
People’s tendency to avoid losses over equivalent gains—which psychologists call loss aversion—can help marketers make decisions by communicating what is at stake. For example, photographs showing retreating glaciers can be an effective way to convey the environmental losses associated with climate change. White and her colleagues Rhiannon MacDonnell and Darren Dahl found that, in the context of household recycling, a loss-aversion message (“Think about everything our community will lose if we don’t recycle”) work best when combined with specific behavioral information—such as when to put out the recycling bin, which materials are recyclable, and so on. This is because people with a loss-focused mindset tend to want concrete ways to address the problem.
Prioritizing Experiences Over Ownership
In addition to efforts to change consumer behavior, some companies have found success with business models that seem to make consumers more open to eco-friendly alternatives. As part of the “experience economy,” companies offer experiential options as an alternative to material goods. For example, Honeyfund allows wedding gift givers to bypass registries full of typical household items and instead contribute toward honeymoons, gourmet dinners, and other adventures for the bride and groom. Tinggly, whose slogan is “Give stories, not things,” also allows consumers to purchase experiences rather than physical products as gifts. Research shows that, in addition to its potential benefits for sustainability, giving an experience makes both the giver and the recipient, strengthens personal bonds, and fosters more positive memories.
The sharing economy is enjoying similar success. Some of the most significant growth models in recent years have involved companies that neither develop nor sell new products or services, but rather facilitate access to existing ones—which often results in a much smaller environmental footprint. Companies have emerged that offer sharing and rental services for everything from clothing and accessories (Rent the Runway and Bag Borrow or Steal) to vehicles (Zipcar and car2go), vacation rentals (Airbnb), and even on-demand tractors in Africa (Hello Tractor). However, sharing services can lead consumers to choose the most readily available option (e.g., an Uber or Lyft ride) over more sustainable alternatives, such as walking, biking, or taking public transportation. Therefore, it is worth carefully considering what impact the service a company offers will have on consumers’ ultimate behavior. Lyft has responded to this concern by committing to offset its operations worldwide through “direct funding of emissions reduction efforts, including reducing emissions in the car manufacturing process, renewable energy programs, reforestation projects, and capturing emissions from landfills,” which will lead to carbon-neutral rides for everyone.
Sustainability considerations can be incorporated into the use and disposal of products
Other companies have won over customers by offering to recycle their products after use. Both Eileen Fisher and Patagonia encourage customers to purchase high-quality clothing from them, wear it for as long as possible, and then return it to the company for refurbishment and resale. One way to promote environmentally friendly consumer behavior is therefore to incorporate sustainability considerations into how products are used and ultimately disposed of.
Let Sustainability Be Heard
Despite growing interest in sustainable business practices, companies are still striving to inform consumers about the sustainability of their brands in a way that enhances brand value, increases market share, and supports a shift toward a culture of sustainable living. Here, we offer a selection of tools based on behavioral science that can help. We recommend that companies strive to understand the desires and needs of their target market, along with the barriers and benefits to behavioral change, and adapt their strategies accordingly. We also recommend conducting pilot A/B tests to determine which tactics work best.
Applying marketing fundamentals to connect consumers with a brand’s purpose, demonstrating benefits that go beyond conventional options, and making sustainability irresistible are the central challenges for businesses in the coming decades. As these practices become more widespread, sustainable business will become a smart and competitive strategy.