Final Paper

HeyerThesis

Conclusions & Future Directions for Research

Conclusions

This qualitative analysis of college students’ attitudes toward sustainable goods was designed to add nuance to the way we understand how consumers perceive sustainable goods. In the semi-structured interviews I noticed a consistent way of framing “sustainable brands” as compared to “unsustainable brands.” Namely, sustainable brands were associated with small businesses, transparent operations (U.S., local, co-ops), and expensive goods, while unsustainable brands were associated with big businesses, opaque operations (overseas production), and cheap goods. Moreover, sustainable brands were also associated with certain positive affective qualities – concern (for the community, employees, and the environment) and an authentic image. Unsustainable brands were widely associated with negative affective qualities – namely disregard (for the community, employees, and the environment) and a constructed image, which participants did not consider trustworthy.

When participants were asked to sort a series of corporate behaviors associated with sustainability into a hierarchy according to which behaviors the participants believed were most important, the resulting hierarchies reflected a real concern for ethical business generally, but less dedication to spending capital to ensure that ethical business is practiced. Indeed, participants consistently sorted sustainable business behaviors that require companies to adhere to regulations or expend capital toward the bottom of their hierarchies. This is “concern for capital,” or the idea that although a person may feel positively about purchasing sustainable products and enjoy the concept of sustainable business, they are simultaneously worried that operating a sustainable business is antithetical to accumulating capital and thus an inappropriate strategy to prefer. I consider concern for capital an additional barrier to purchasing sustainable products along with barriers identified by participants: (1) high price, (2) lack of information, and (3) lack of availability.

If the opinion of my study participants is any indicator, it seems that one of the reasons we see a significant attitude-behavior discrepancy when it comes to American consumption of sustainable goods is because Americans don’t always think sustainability makes good business sense. They are concerned for capital, and see sustainability as at least somewhat antithetical to it. To temper this concern for capital I recommended two global policies that could serve to tip the scales in favor of sustainable production: establishing a pigouvian tax on carbon and a large scale attempt to reproduce the California Effect by raising sustainability standards in developed countries while conditioning market access on adhering to those standards. These are undeniably difficult policies to implement, especially on a global level. Nonetheless, they bear mentioning.

My more reasonable recommendations deal with breaking down the three barriers (1) high price, (2) lack of information, and (3) lack of availability, which may serve to temper the attitudes of consumers toward purchasing sustainable products, and diminish the persistence of (4) concern for capital. These recommendations are designed to encourage growth in the market for sustainable products through consumer demand.

Future Directions for Research

Further research is needed to fully understand sustainability as a concept, how consumers interact with sustainable goods and what is likely to convince or dissuade them from purchasing these goods.

Beyond Early Adopters

To evaluate whether sustainable business practices and purchasing sustainable goods are of concern to groups that do not fit the ‘early adopter’ description it would be interesting to employ this survey methodology to other groups. I recommend exploring the viewpoints of relatively economically disadvantaged populations, elderly populations, and relatively uneducated populations. Applying this survey design to other groups may require some adjustment of the brands used as primers so that the particular group is able to recognize the brand and make judgments about it. In this case it may be helpful for the researcher to be familiar with the population, at least through empirical study and/or observational research.

Small Companies & Sustainable Business

Participants consistently noted that small companies have a heightened capacity to operate their business sustainably. Small businesses, however, are often legally exempt from reporting information about their operations. This isn’t bad thing, by any means. Indeed, transparency can be a very onerous apparatus, and it may not be appropriate for every “mom and pop shop” to spend the time and money it would take to document their business practices. To evaluate whether small businesses deserve to be associated with sustainability I recommend a survey of small businesses in an effort to understand just how sustainable they are. The survey could be administered to small business owners and would ask them to take account of their sustainable business practices, which could be modeled on the eleven sustainable business practices I used in this project (The Semi-Structured Interview Process / April 15, 2010).

Situational Primers and Sustainable Consumption

Social science research has continually showed the effects of priming on attitudes and actions. In one study, participants were primed with words related to elderly stereotypes were likely to walk more slowly down the hallway after finishing the experiment than the control group (Bargh, Chen, & Burrows, 1996). It would be interesting to evaluate whether situational primers might make a consumer more likely to purchase a sustainable product.

The study might take place in a grocery store with a pair (or several pairs) of brands, to be displayed next to one another. One of the two products should be marked in some way that distinguishes it as sustainable. Before entering the store to do their shopping, consumers would be primed to think about values related to sustainability; for instance, they may witness a small group of people planting a tree or see some information the reminds them of social instability like a poster about child laborers. Would these positive primers actually affect real life purchasing decisions? Additionally, prices between the sustainable and unsustainable brand could be altered to be either more egalitarian or more differentiated as a method of determining at what cost people would choose the sustainable good in a primed vs. unprimed condition.

Policy Recommendations: Lack of Availability

Policy Recommendations

In order to encourage companies to make tradeoffs between social, environmental, and economic concerns, steps must be taken to lower the barriers to consuming sustainable products: (1) high price, (2) lack of information, and (3) lack of availability, and (4) concern for capital so they may experience sales growth. By breaking down these barriers consumers may begin to see the real costs of the products they purchase, which may diminish their concern for capital, or their willingness to preference capital over sustainability concerns when they are in conflict.

(3) Availability

Sustainable Product Placement: Even if consumers have the information they need to buy sustainable products, they are relatively hard to find. An informal survey of 23 retailers in Chicago and in the San Francisco Bay area found that fewer than half sold sustainable products (other than organic foods and CFLs), and among the minority that did sell these products only about 10 percent stocked more than one brand option (McKinsey, 2008). If stores simply stocked more sustainable products (including products produced locally), consumers would suddenly have the opportunity to purchase these products more widely. This could be especially effective if consumers actually understood the social and environmental returns on their purchasing decisions, as I discussed in the last section. Stocking and supporting local products may also help the cause by emphasizing the personal relevance of the products.

Leveraging Sustainable Products: Marketers have been leveraging products to influence consumers for decades, and given that companies have taken to identifying many more of their products as “green” there is some evidence that this is also taking place in the realm of sustainable goods. (Drumwright, 1994; Davis, 1992; Mayer, et al, 1996). The idea simple: leverage media to showcase a product or service being used as part of everyday life in order to shape consumer brand perception and impact purchase behavior. For instance, in 2002 Busta Rhymes and (the artist formerly known as) Puff Daddy collaborated on an ode to a cognac brand, Courvoisier. After the release of Pass the Courvoisier Part II, the brand’s sales jumped 20 percent (Sauer, 2010).

While Busta and P.Diddy may or may not be the ideal spokespeople for sustainable products, the basic concept still stands -- put a product in the hands of a celebrity and consumers will interpret this as a de facto endorsement. It is important, however, that the products that are marketed in this way could actually be considered sustainable (rather than greenwashed). Obviously it should not be acceptable for any company to purposely greenwash their products, but it is relatively common today. Perhaps individual spokespeople should make more of a effort to evaluate the sustainability potential of the good before they agree to position it as sustainable. Likewise, consumers should be mindful of the information they are receiving may not be entirely truthful, given that it is being propagated by celebrities and for-profit entities

NBC’s Behavior Placement: Although specific advertisements may not always influence a person to buy a specific product, political scientist Shanto Iyengar argues that the media exercise ‘agenda control,’ which is to say that it has the potential to shape what you think about as well as what you consider important and true. For instance, the prominence of issues in the news media – fear of crime or concern about traffic congestion or worry about the condition of the economy – is correlated with the public’s perception that those issues are important (Dearing & Rogers, 1996; Iyengar & Kinder, 1987).

Along the lines of agenda control, NBC’s network executives have asked producers of almost every primetime and daytime show to incorporate a green storyline at least once a year since 2007. In just one week during April 2010 the detectives on "Law and Order" investigated a cash-for-clunkers scam, a nurse on "Mercy" organized a group bike ride, Al Gore made a guest appearance on "30 Rock," and "The Office" turned Dwight Schrute into a cape-wearing superhero obsessed with recycling. The tactic, according to General Electric (GE), owner of NBC, is called "behavior placement.” It is designed to sway viewers to adopt actions they see modeled in their favorite shows, and it helps sell advertisements to marketers who want to associate their brands with a feel-good, socially aware programming (Chozick, 2010).

Clearly GE wants people to be thinking positively about sustainability. Why? Well, it is worth nothing that in 2005 GE unveiled the $90 million “Ecomagination” PR and advertising campaign, which is designed to convince consumers that GE is helping to solve the world's biggest environmental challenges while driving profitable growth for GE and its shareholders.

A September 2007 analysis of “Ecomagination” noted that GE continued to sell coal-fired steam turbines and was delving deeper into oil-and-gas production. Meanwhile, its finance unit was seeking coal-related investments including power plants, which are a leading cause of carbon-dioxide emissions in the U.S. GE, however, is on track to sell $14 billion of its self-described environmentally friendly products this year, and projects the total will grow more than 10 percent annually through 2010. GE also says it reduced its own greenhouse-gas emissions by 4 percent between 2004 and 2006. Although the company does not count emissions from many power plants that are partially owned by the company, the Wall Street Journal described the discounted power plant emissions as "an unknown but unquestionably significant amount” (Kranhold, 2007).

Sustainability is undeniably a complicated issue for enormous companies like General Electric. They have the money to influence consumers to think positively about sustainability, and they have the ability to directly manufacture sustainable products. It is important, then, to monitor the activities of companies like GE to ensure that they’re “walking the talk” – that is producing their goods in a sustainable manner rather than just greenwashing products to leverage them in the marketplace. This may take the form of non-profit or government analysis of company behavior and may extend to the individual consumer, as he makes use of more dependable information about sustainability to make his product decisions.

Benefits to Sustainable Companies

Once consumers overcome barriers to purchasing sustainable products, these products will experience sales growth. Firms that have a strong position in the market for sustainable goods can stay ahead of regulation and protect their market shares from competitors. The most proactive companies will lead regulation, and may even push for stricter regulations that will put their less savvy competitors at a disadvantage. Newcomers, in turn, can steal market share from existing companies by appealing to the growing legions of consumers concerned about sustainability.

Policy Recommendations: Lack of Information

Policy Recommendations

In order to encourage companies to make tradeoffs between social, environmental, and economic concerns, steps must be taken to lower the barriers to consuming sustainable products: (1) high price, (2) lack of information, and (3) lack of availability, and (4) concern for capital so they may experience sales growth. By breaking down these barriers consumers may begin to see the real costs of the products they purchase, which may diminish their concern for capital, or their willingness to preference capital over sustainability concerns when they are in conflict.

(2) Information

Educate the Consumer: Because green products are often difficult to comprehend, the businesses that sell them ought to see themselves as educators rather than just profit generators. It is important for a company not only to explain its own products, but also the larger issues like environmental degradation, climate change, and social instability in order to place their product at the forefront of consumers minds when it comes to sustainability.

The Difficult Diaper Decision: The complex nature of this process is worth nothing. First of all, what should be considered sustainable can be a complicated choice, which can be affected by vested interests to promote particular products. Take, for instance, one’s choice to use disposable or cloth diapers for his new baby. Since the average child uses over 5,000 diapers during the 30-month period before toilet training a parent may wish to choose the more sustainable type. In an attempt to convince parents that using disposable diapers is not overly degrading of the environment Proctor and Gamble commissioned a three-year study at the University of Michigan to determine the effects of disposable diapers once they enter the landfill. The research maintains that disposable diapers are environmentally safe (Proctor & Gamble, 1989). Despite this research, however, neither disposable nor cloth diapers can be easily identified as the sustainable choice (Smith & Pitts, n.d.).

Disposable diapers account for about 80 percent of the diapers used in the US. Convenience is the major reason given by parents, particularly in dual-career families where time to care for cloth diapers may be limited. Group day care restrictions, which may require single use diapers also influences the preferred diapering method. Families who lack access to laundry equipment may also find cloth diapers burdensome to care for (Smith & Pitts, n.d.). Disposable diapers account for an estimated 1.5 to 2.0 percent of municipal solid waste. With landfills reaching capacity, solutions for the disposal of all solid waste is a concern, and disposable diapers generate four times as much waste as cloth diapers. An archaeological study of garbage from 1977 to 1985 determined that disposable diapers accounted for about 1% of all solid waste in landfills (Rathje, 1989).

Although disposable diapers pose environmental concerns from a solid waste perspective, cloth diapers raise concerns regarding air and water pollution. The reusable nature of cloth diapers reduces the solid waste problem, but laundering of cloth diapers requires water, energy, and chemicals in the form of laundry detergent, which may contribute to water pollution. Franklin Associates, Ltd. (1990) conducted a study that concluded that cloth diapers use about twice as much energy and four times as much water as disposables and created greater air and water pollution than disposable diapers.

So, although disposable diapers use more raw material in the manufacturing process, cloth diapers use greater resources for to maintain them. This means that there might be two potentially environmentally responsible choices. Where land is plentiful, but water is in short supply, disposable diapers may be the best choice. On the other hand, areas that have an overabundance of trash in landfills but have adequate water supplies may opt for the cloth diaper. It is also possible that the most environmentally responsible choice is choosing some combination of disposable and cloth diapers.

Energy Star: Clearly, it is difficult to accurately assess the sustainability impacts of products, and it may not be appropriate to fully trust companies to identify the most sustainable product; for these reasons, nonprofits and government agencies should also take up the cause of sustainability education. Energy provides a model. This program, a joint effort launched by the Environmental Protection Agency (EPA) and the US Department of Energy in 1992, educates consumers about the way suitable products can cut energy use, save consumers money, and protect the environment. Every appliance that meets government energy-efficiency standards can carry the Energy Star label, which has gained widespread consumer recognition and trust. Because federal regulations mandate energy labels for certain kinds of equipment, almost half of the air conditioners sold in the United States during 2005 carried the Energy Star sticker (McKinsey, 2008).

Unfortunately, it can be difficult to know when to trust eco-labels like Energy Star. Indeed, there are about 600 eco-labels worldwide being used by companies and non-profit organizations (80 in the United States). “They cover almost every category imaginable -- from textiles to tea and tourism, from forest products to food” (Elperin, 2010). Because certification is a self-regulated industry the integrity of these labels varies wildly. So, while the best certification systems may have brought increased accountability to markets that used to be largely unregulated most other certification systems make claims that cannot be proved. EcoLogo, a consultant on verification, surveyed more than 2,200 North American products and found that more than 98 percent lacked proof to justify their claims (Case, 2008).

In order for eco-labels to be effective, it’s essential that a body take responsibility for ensuring that the certification systems in place are legitimate. Without this assurance, purchasing sustainable products is unlikely to become any easier. This responsibility could fall on a government agency, like the EPA, or a trustworthy non-profit organization. In the absence of a body like this, it may be more effective for consumers to look for other tools that can help them access more dependable information about the goods they buy.

GoodGuide and other Decision Helping Tools: Mobile phone applications like the GoodGuide provide an inventive way for consumers to directly access complex information regarding the sustainability impacts of the goods they are about to purchase simply by scanning the barcode. The GoodGuide aggregates and analyzes data on both product and company performance and employs a health hazard assessment, an environmental impact assessment, and a social impact assessment to identify major impacts to human health, the environment, and society. Each of these categories is then further analyzed within specific issue areas, such as climate change policies, labor concerns, and product toxicity. Currently, GoodGuide’s database includes over 1,100 base criteria with which they evaluate products and companies (Good Guide, 2010).

Given the well-established notion that a trade-off between effort and accuracy is inherent to human decision making (Payne et al., 1993), an application like this will reduce the effort required to make sustainable product decisions as well as improve the accuracy of these decisions by giving consumers access to more dependable information in an easy to use format. An application like this does not require consumers to trust the claims on a product’s package or eco-labels, although they may choose to. Rather, they will be more able to capitalize on the enormous amount of information available about sustainability in a more objective way, which may enable them to make more accurate sustainable product decisions than they could otherwise.

Policy Recommendations: Price

Policy Recommendations

In order to encourage companies to make tradeoffs between social, environmental, and economic concerns, steps must be taken to lower the barriers to consuming sustainable products: (1) high price, (2) lack of information, and (3) lack of availability, and (4) concern for capital so they may experience sales growth. By breaking down these barriers consumers may begin to see the real costs of the products they purchase, which may diminish their concern for capital, or their willingness to preference capital over sustainability concerns when they are in conflict.

(1) Price

Price is the largest obstacle to purchases of green products, according to a survey of 3,600 consumers by the UK Department for Environment, Food, and Rural Affairs (McKinsey, 2008). Many of these products are more expensive than their equivalents for good reasons. First, there may be a relatively small market for these products, there are additional costs associated with certification, and there is relatively more money going to the producer in terms of income as well as for business development.

While there may be costs associated with sustainable goods, there are also significant costs associated with unsustainable production, which are considered negative externalities[1]. In the case of externalities, prices do not reflect the full costs or benefits of producing or consuming a product or service, and too much or too little of the good will be produced or consumed in terms of overall costs and benefits to society. For example, when workers are severely underpaid for their labor (as in the case of unregulated sweatshop and agricultural labor), inadequate wages impose significant costs on the laborer and his or her family as well as the society who must address the multiplicity of problems related to poverty -- inadequate access to nutritional food, education, health care, housing, transportation, etc. When the full cost labor is not taken into account the product is produced too cheaply and does not reflect the costs of production like providing an adequate standard of living for those employed producing it. Another example of an externality is that automobiles are not priced to take into account the costs of the pollution they generate. Because this cost is not included, the price of an automobile does not fully reflect the cost of the automobile to society.

Pigouvian Taxes: To confront parties with the issue of externalities the economist Arthur Pigou proposed taxing the goods that were the source of the negative externality. These Pigouvian taxes would correct the price to accurately reflect the cost of the goods' production to society, thereby internalizing the costs associated with producing the good (Baumol, 1972). An example of a Pigouvian tax is a carbon tax, which increases the competitiveness of non-carbon technologies like solar, hydro, wind, and nuclear power compared to the traditional burning of fossil fuels, thus helping to protect the environment while raising revenues for non-carbon technologies.

A carbon tax, however, must be administered worldwide in order to ameliorate the global warming already under way (Nader & Heaps, 2008). It would probably require a global body to adjust and regulate this tax, but considering the unsuccessful nature of the Copenhagen climate summit, we may be quite far from establishing any sort of legally binding agreement to reduce greenhouse gas emissions. Furthermore, within Pigou's framework, the changes involved are marginal, and the size of the externality is assumed to be small enough not to distort the rest of the economy. Some argue, however, the impact of climate change could result in catastrophe and non-marginal changes (Helm, 2005).

The California Effect: The California Effect, or the use of market incentives to promote the ratcheting upward of regulatory standards provides evidence that it may be possible for developed countries to impose higher regulatory standards without a significant loss of capital. In 1970 the Clean Air Act Amendment permitted California to enact stricter emissions standards than the rest of the United States. Although automobile manufacturers had to spend extra capital to produce more efficient cars, they did not simply abandon California as a market. This shows political jurisdictions that develop stricter product standards may have the ability to force producers to design products that meet those standards or else deny them access to its markets (Vogel, 1997).

Developed countries, like the state of California, are in a position to establish higher standards to encourage the adoption of social and environmental standards around the world. These standards might ensure things like living wages, safe working conditions, corporate community engagement and environmental stewardship in developing as well as developed nations. As developing countries look for ways to access the markets of developed countries to fuel their economic growth, these market incentives may actually bolster the social and environmental standards of companies and countries. Without these market incentives from developed countries, however, governments and companies around the world would have relatively little reason to bolster their social and environmental standards. Instead, they may focus on creating cheap exports, which may not be compatible with regulation in favor of sustainability.

The United States’ decision to import sustainably produced goods may be especially helpful to temper the populist anger that my respondents expressed toward big businesses that produce overseas. While it is not necessarily true that these companies are the least sustainable, my respondents negative attitudes toward them and were quick to characterize them as exploitive. If the U.S. made it known that they would only import goods that met certain socially and environmentally sustainable criteria, the citizens would have little reason to assume that the goods they purchase were made in undesirable conditions.

It is unlikely, however, that the U.S. would decide unilaterally to begin exclusively importing sustainable goods, as it would put them at a distinct disadvantage in the market. Again, it may be most effective to establish an international body of developed countries that are willing to condition access to their markets on producing goods sustainably. To avoid unreasonable or unequal expectations, I suggest that each of the developed countries also adopt these standards of sustainability.

Creating international bodies to levy carbon taxes and set global labor standards, however, is a very difficult process. In light of this difficulty, perhaps the real question we should ask is not “how expensive are sustainable products,” but “how do my purchasing habits affect the global population and environment?” One way to do this is to ensure that consumers understand the financial and environmental returns on their investment in sustainable products. Indeed, consumers may be more willing to try new ones—especially those that cost more—when they find it easy to track the savings (McKinsey, 2008). One way to do this is to educate the consumer about the product decisions he could potentially make.

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[1] An externality is a cost or benefit not transmitted through prices, which is incurred by a party who did not agree to the action that caused the cost or benefit.