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.

---

[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.

Stability=Unsustainability

Stability=Unsustainability

The last blog entry brought us to the conclusion stability = unsustainability. That is, my participants associate economic stability (capital generation) with businesses they identify as unsustainable (big, opaque, cheap goods). Indeed, the companies that my participants identified as superior at generating profit fit well into the “unsustainable” schema identified during the first sorting exercise. Participant 11 noted that bigger companies are more likely to be solely seeking profit at the expense of responsible business.

“I think that smaller, more independent companies usually are formed with more sense of responsibility and since their share, I mean, it's sort of, it's sort of hard to tell because like, they might be formed just to become a larger company and in order to reap the benefits - the economic benefits - of it's product, but I also feel like more of them are probably [pause] more sustainability minded than the large companies that have already been, you know, corrupted by our capitalist process.” Participant 11 #73-78

Participant 25 also identified big businesses profit generation at the expense of ‘ideals.’

“Larger corporations have a…larger pressure to make more money and smaller corporations can be based more around ideals.” Participant 25 #414-416

Indeed, participants characterized these companies as likely to take advantage of regulatory differences (cheap labor, few environmental regulations) between or within nations in order to capitalize on the imbalance. For instance, Participant 36 acknowledged the size and relative economic success of Chiquita Brands, Inc. while noting their exploitive relationship to laborers.

“I think large corporations that make their product in South America, I feel more often than not, have a tendency to do unsustainable things, like pay living wages, bad factory conditions, exploit labor.” Participant 36 #413-415

Participant 11 had a similar response to McDonalds while attempting to decipher whether to sort Chipotle in to the sustainable or unsustainable category.

“I know it is owned by McDonald’s, which is a really large multinational corporation not known for treating its workers well and known for paying a very low wage.” Participant 11 #242-244

Although my respondents care about sustainable business broadly, there is evidence that they consider sustainable business practices to be antithetical to profit, which is a direct risk to a company as well as any individual engaged market. I label this attitude "concern for capital." Although primarily theoretical, concern for capital constitutes a significant barrier to demanding/purchasing sustainable goods.

This attitude a fundamental disconnect in that participants associate unsustainable firms with profit and an opportunity to accumulate monetary wealth, but they also associate these firms with negative impacts like harming the environment, employees, and the communities. While the presence of a profit-generating firm is good for individuals it may also generate significant harms, which could not be rectified without raising (environmental and labor) standards.

Moving from Stability=Unsustainability to Stability=Sustainability

So what should we do about this notion that unsustainable business practices are the way to keep our economy stable and effective? Could we encourage business to adopt sustainable practices and produce sustainable brands?

At the moment, firms seem to have relatively little reason to make trade offs between their economic ends and social/environmental goods, since their only formal end is to generate profit. Many of my respondents, however, expressed the idea that consumers could convince firms (that seek profit) to produce socially and environmentally sustainable goods by “voting with their dollar” or purchasing a sustainable good in lieu of the unsustainable version of that good. This should send a signal to the market that sustainable goods are preferred to unsustainable ones and may make it relatively easier for a company to profit from producing sustainable goods. Participant 26, 40, and 25 alluded to the impact consumers could have if they demanded sustainable products.

“I am kind of working under the assumption that if the primary consumers of a product or of a company’s product aren’t really pushing for sustainability efforts, that the company is less likely to make those efforts on their own.” Participant 26 #206-209

“Whole Foods has done it successfully, and I think that consumer tastes will always kind of triumph over cost. If you can get enough people to buy something because they care about it then I think that’s a pretty successful marketing technique.” Participant 40 #539-542

“The importance of [sustainability] depend[s] on how the consumers that want - like, if everybody, like, knew that like, oh, Adidas exploits Indonesian workers and then, like, everyone hated that, then they would all buy, you know, American-made or, you know, better shoes in a sense. And then obviously Adidas would have to change their priorities drastically.” Participant 25 #232-236

Most respondents agreed, however, that sustainable goods are currently (1) more expensive to produce (for the company), more expensive to purchase (for the consumer), (2) relatively difficult to understand (requiring a intricate knowledge of sustainability), and (3) harder to find (available only at specialty stores, in special aisles, or on the internet). At this point it is relatively unlikely that consumers could encourage companies to make this transition purely with their own buying power, as there are several barriers to purchasing these products.

Expensive to Produce

On transitioning businesses to more environmentally friendly technology:
“In lot of situations it will require internal personnel infrastructure that might not already exist. Like, you got to have consultants. You probably have to have different sort of engineers. It is going to be expensive, but I feel it is important for the long-term viability of the industry and the planet.” Participant 9 #530

“I just think that if a company is willing to put the extraordinary resources into sustainability when regulations for that don’t even exist, like they could get away with it, but they don’t, then I feel like it’s just exceptionally admirable because it is expensive.” Participant 3 #392-396

Expensive to Purchase

On the extent to which all Americans could purchase sustainable goods:
“In our society I don’t think everyone has [the option to purchase sustainable products] because of the lower, middle, and upper class segregations. It’s more expensive because not everything is sustainable nowadays – it’s more of a luxury.” Participant 33 #679-681

On who would be likely to buy sustainable products
“The market was a very like, small circle of people who were getting sort of keen to these issues, and they could have a product sold for them, but they were like so educated, and such a small minority. They were probably willing to pay more for it than someone else who wasn't.” Participant 36 #264-267

Hard to understand

“I feel like the more sustainable people are often found in more affluent areas, because they can afford to pay premium for sustainability…and these people have more time to invest into understanding sustainability.’ Participant 6 #155-158

“I feel like environmental and labor practice concerns are one of those things where like if you aren’t always thinking about it and always on the ball, and make it part of your daily life you’re not going to be the kind of person to adopt
it. It’s one of those things, you hear about it once and you’re like ok, cool, but it’s an ever changing spectrum and to always to be able to make the most knowledgeable choice is not an easy thing.” Participant 40 #799-783

Hard to find

“You have to go to specialty stores, but then it’s really expensive -- out of my price range. You’ll see a lot of organic cotton, or things made out of hemp, or bamboo. So I think it’s there but you have to go looking for it and you can’t always afford it unless you are some chi chi environmentalist.” Participant 9 #243-245

“If you have a company you don't want people knowing the bad side of you, so I'm willing to bet that some of these major corporations -- companies are going to do their best to kind of like hush that down.” Participant 22 #441-444

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.

In my next entry I will discuss how we can begin to lower these four barriers to consuming sustainable products. These recommendations are designed to encourage growth in the market for sustainable products through consumer demand.

Results and Discussion of Exercise 2

This post is dedicated presenting and discussing the results of Exercise 2. In this exercise participants were asked to sort eleven behaviors into a hierarchy according to how important they think it is that a company engages in each of the activities. Behaviors could tie for a position on the scale, and if one or more of the behaviors were not important at all the card was not included in the hierarchy.

The eleven behaviors are as follows:

1. Employees may organize and bargain collectively
2. Company is actively working to reduce energy and resource consumption
3. Company is working to reduce the amount of waste it creates
4. Company employs independent monitors to oversee overseas production
5. Company practices environmental stewardship even if the country it operates in lacks environmental regulations
6. Employees have freedom from forced labor
7. Company is engaged with the community and supportive of it
8. Company employs metrics to measure and manage energy consumption
9. Employees earn a living wage
10. Employer sponsors job-related education programs for employees
11. Company routinely collaborates with non-profit groups

Behaviors at the Top of the Hierarchy: In brief, respondents were asked about a number of characteristics of companies and their products that would typically be characterized as “sustainable.” My participants tended to sort these behaviors with an eye to ethical concerns, especially those that are not easily dismissed, by placing broad goals at the top of the hierarchy and appealing to moral values and ethical codes when defending the position of those corporate behaviors. The specific behaviors they chose to rank at the top differed between respondents, but often included basic environmental concerns like “company is actively working to reduce energy and resource consumption” and “company is working to reduce the amount of waste it creates” as well as relatively uncontroversial issues regarding basic human rights like and “employees have freedom from forced labor.”

For instance, Participant 46 explained “employees earn a living wage” was at the top of her hierarchy because it is a matter of respect and should be prioritized.

“I think earning a living wage is just like a respect to the people who are, like the, like are the actual force behind the production of your product. And I think -- I mean, I just think a living wage is really important because it like, just like ensures that the employee stays above water and if they get sick, or if they have an accident, or if they, if they – if their spouse loses their job, they have enough savings and they have enough -- they have like a moderate cushion, not to go, not to go like below the poverty line, so I just think it’s important to like treat employees with that respect.” Participant 46 #180-186

Participant 6 appealed to human rights when he ranked “employees have freedom from forced labor” at the top of his hierarchy.

“I’m against slavery. I think it's wrong, um, I guess I've never been asked this before. I guess it's a human right than a freedom of your life.” Participant 6 #363-365

Participant 36 also appealed to human rights in his defense of “employees have freedom from forced labor” as his highest ranked behavior.

“I think that's just from, like, a human rights standpoint, you know, it's—forced labor is, you know, really morally indefensible.” Participant 36 #432-433

Behaviors at the Bottom of the Hierarchy: The bottom of hierarchies tended to consist of corporate behaviors that were perceived to require stringent corporate regulation or a significant expenditure of corporate capital. These behaviors overwhelmingly included “employees my organize and bargain collectively,” “employees earn a living wage,” “company employs independent monitors to oversee overseas production,” “company is engaged with the community and supportive of it,” “employer sponsors job related education programs for employees,” “company practices environmental stewardship even if the country it operates in lacks environmental regulations” and “company routinely collaborates with non-profit groups.” Most often participants would express a favorable disposition toward these ideas in theory, but see them as contradictory to the generation of capital.

Participant 6 identified the preference for capital over environmental protection when he explained why less developed countries allow more pollution than more developed countries.

“I think it all comes down to economics. In more developed countries were we can afford to put levies on pollution, we do. In less developed countries, they value the return on their industry more, so they allow pollution and contamination to occur, but I still think it's bad.” Participant 6 #460-463

Participant 3 appealed to the benefit of simply having a job, even if the wages were unreasonably low by her standards.

“And that even if they do like make their goods in America, they’re still likely, very likely, using material that came from, you know, somewhere where they pay people less than a dollar a day, but that’s a whole different story cause they do some of the best jobs in those regions.” Participant 3 #107-110

Participant 29 also appealed to the benefit of simply having a job when he argued that there is some value to performing sweatshop labor that could be lost if wages rose.

“I think it’s good that there’s any money in those places at all, and if they had to pay a living wage they probably wouldn’t be in those places, and there would be no money for those people.” Participant 29 #330-332

Participant 18 considered how companies would be impacted by being made to publish information about their energy usage, and was most concerned by the capital impacts.

“I mean if every single company would have to do it, then it'd probably be good for the consumer just because they would know which companies hurting the environment and which ones are making more of an effort to conserve it. But I just see -- it would just take a blow to the company itself -- just a lot more money to put out and a lot more work.” Participant 18 #438-442

Concern for Capital: It appears that my respondents (and probably Americans in general) see some sort of “good” emanating from the existence of profit-generating firms, which is capital. At some level respondents are willing to trade socially and environmentally sustainable practices for capital concerns, and would expect others to agree – even those others who were employed in the sweatshop or who were citizens of the polluted country. Respondents also alluded to the negative impacts of regulating negative effects by noting that regulations tend to make capital unhappy and likely to flee to less regulated areas, which would disadvantage the population who insisted on regulation in the first place.

Historical Roots of Concern for Capital: The notion that an individuals pursuit of capital has beneficial consequences for the society has deep roots in the American psyche that can be traced back to Bernard Mandeville’s Fable of the Bees, which elucidated many key principles of classical economics including the division of labor and the invisible hand. The Fable of the Bees also propositioned the idea that the true causes of social welfare and social progress are a result of human vice – people work out of greed, are polite out of self-interest, and keep the law for fear of punishment.

"As Sharpers, Parasites, Pimps, Players,
Pick-Pockets, Coiners, Quacks, Sooth-Sayers,
And all those, that, in Enmity
With down-right Working, cunningly
Convert to their own Use the Labour
Of their good-natur'd heedless Neighbour.
These were called Knaves; but, bar the Name,
The grave Industrious were the Same" (Mandeville, 1705).

This notion was picked up on by Adam Smith and further propagated in the Wealth of Nations, which was undoubtedly influential in laying the basic groundwork for capitalist economic theory in America. Smith’s version of this concept is as follows: “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love” (Smith, 1776).

The Conclusion: Stability = Unsustainability: Although my respondents care about sustainable business broadly, they do not seem to fully support regulatory standards or the expenditure of corporate capital to reorient business toward operating sustainably. They see sustainable business practices as antithetical to profit, which is a direct risk to a company as well as any individual engaged market.

My participants associate economic stability (capital generation) with businesses they identify as unsustainable (big, opaque, cheap goods) and because of a concern for capital are not ready to associate economic stability with sustainable production, no matter how positively they view sustainability. These attitudes signal a fundamental disconnect in that participants associate unsustainable firms with profit and an opportunity to accumulate monetary wealth for themselves, but they also associate these firms with negative impacts like harming the environment, employees, and the communities.

More on this conclusion soon…

Results and Discussion of Exercise 1

And now for the results of Exercise 1 and some discussion! Remember, the instructions for Exercise 1 were, "Please sort these branded cards according to how sustainable you believe them to be. Create three groups: sustainable brands, unsustainable brands, and brands of unknown sustainability. You may have as many or as few cards in each group as you wish, but you must sort all the cards into one of the piles. The brands were as follows:

1. Adidas
2. American Apparel

3. Ben & Jerry’s
4. Chipotle
5. Chiquita
6. Haagen Dazs
7. Kettle Chips
8. SunChips
9. Timberland
10. Urban Outfitters

Results and Discussion of Exercise 1

The Structure of Sustainable Brands: Participants tended to frame brands as “sustainable” if they perceived them to be (1) a small business (2) a business with transparent operations and (3) a business that produces expensive products. The notion of transparent operations was heavily associated with domestic (U.S.) production, local products, and products produced by co-ops.

Small

On her feelings about big-business:

I don't know whether or not this is just a contrived thing of American culture but I, I definitely seem to trust it more if it's a smaller company. Um, for instance if I see, like, P&G says that they're, um, Proctor & Gamble has, like, cut energy by, like, a large, large percentage, or like, has made something organically I'm much more -- I'm much less likely to trust it than, like, if I see a smaller, like, farm company, um, saying the same thing. – Participant 26 #344-348

On why he placed Ben & Jerry’s in the sustainable category:

Just the whole idea of the theme that they’re trying to adopt it seemed like it was "alternative" to the big company – big corporation. And they started they started small, so I just associate those things with sustainable practices and other good things. Participant 27 #28-30

On why small businesses are more free to pursue sustainable strategies:

Larger corporations have a…larger pressure to make more money and smaller corporations can be based more around ideals. Participant 25 #414-416

Transparent

On why she sorted American Apparel into the sustainable category:

I mean, they are American Apparel; I think all of their clothing is made in the United States. It is -- I don’t know if it’s part of their mantra to be like fair in the labor wages and practices but I hope so -- assume so because it’s in this country. Participant 35 #11-14

On how Adidas could prove it is sustainable:

I don't know what kind of campaign they could put on. They'd try and keep jobs here and not exploit workers in other countries, you know, keep wages up well. Decrease the waste they produce. Again they'd have to show me that they were letting consumers know they were doing that. I'm not exactly sure how they would -- if they could directly make commercials to show that they are making efforts to stay sustainable. Participant 21 #146-150

Expensive

On the expense of sustainable clothing:

When I see things marketed as “environmentally friendly organic cotton” they’re way more expensive, so it’s hard for even me to make the decision to buy them. Participant 29 #205-207

On purchasing ethically made clothing:

You have to go to specialty stores, but then it’s really expensive -- out of my price range. You’ll see a lot of organic cotton, or things made out of hemp, or bamboo. So I think it’s there but you have to go looking for it and you can’t always afford it unless you are some chi chi environmentalist. Participant 9 #243-245

The Structure of Unsustainable Brands: Participants tended to frame a brand as “unsustainable” if they perceived it to be affiliated with (1) a big business (2) a business with opaque operations and (3) a business that produces cheap products. The notion of opaque operations was heavily associated with producing goods overseas in areas like China, South America, and Southeast Asia. These factors mirror the perceptions relied upon to distinguish the “sustainable” brands.

Big

On the sustainability potential of Unilever v. Ben & Jerry’s:

Unilever is a bigger corporation so I don’t know the specifics but I feel like with a bigger corporation it’s easier to move away from any mission they see as unprofitable. Whereas Ben and Jerry’s might just do stuff because the founders want to do it and it’s a good thing to do, a bigger corporation might not be as concerned with that. Participant 10 #88-92

On why he sorted Chiquita as unsustainable:

I assume they’re also a big company so are not really concerned with how their bananas are made in terms of environmental impact because they’re just trying to make money. Participant 10 #135-136

Opaque

On his skepticism about SunChips sustainable advertising:

I remember seeing those commercials that saying that their chips are solar powered and there are like those people dancing in the field, which is just so ridiculous, but I mean I’m sure they couldn’t say it unless it was partly true. But it’s like, okay, you’re giving me no actual information. You’re saying solar power and you’re showing happy people dancing and eating SunChips. That’s just like all right...that doesn’t tell me anything. Participant 40 #274-280

On why she sorted Urban Outfitters as unsustainable:

Urban Outfitters I put as unsustainable simply because on their labels, I mean, most of their clothing is coming from Southeast Asia and China, and based on broad sweeping generalizations and prior knowledge, most of the factories where these are made are big polluters, they are not necessarily paying fair wages. Participant 9 #211-213

On why he sorted Adidas as unsustainable:

When I think shoe companies I think sweatshops. And that's pretty much the same for the two clothing companies as well. I just think child laborers in China or something. Participant 27 #104-105

Cheap

On the price of producing sustainable goods:

There’s always going to be a price issue because one of the reasons they’re made so unsustainably is because it would cost money to do it sustainably, so I often thought to myself if I knew that something was more environmentally friendly and the difference in price was not prohibitive, I would actively support that. Participant 29 #222-225

On why he placed Adidas in the unsustainable group:

I know Adidas works with rubber for example for their shoes, so I'm sure that it's cheaper to synthetically make rubber in a less-sustainable way. Again, I don't know anything that Adidas does in that direction I just assumed that they are looking for profit margins since I've never heard them advertising anything towards sustainability. Participant 6 #183-186

I think Wal-Mart is sort of notorious for poor labor practices and that’s why they’re so cheap. Participant 35 #698-699

Unknown Sustainability

When participants categorized a brand as being of “unknown sustainability” they attributed some factors from the “sustainable” category as well as some factors from the “unsustainable” category to the brand. Timberland was sorted into this pile on several occasions because my participants had a difficult time deciding whether the brand’s association with nature was indicative of sustainable business. Both Participant 43 and Participant 27 saw a potential conflict between the ‘naturalist’ philosophy of the brand and the way it is manufactured, leading them to place it in the unknown category.

I don't really know anything about Timberland. The only thing I really associate them with is an outdoorsy back to nature philosophy, but I don't really identify that as - I mean you think they serve to like outdoors oriented clientele that they would be environmentally responsible, but that doesn't mean they're socially responsible and it doesn't actually mean they're environmentally responsible, so I don't really know. Participant 43 #187-191

Timberland I had no idea either way. I had my clothing manufacturer pointing me towards bad, but there are all sorts of naturalist stuff. So that was a good pull and I decided to put it in the middle, but I don’t really know. Participant 27 #173-175

Although I recruited participants who claimed to be differently committed to caring about sustainable business practices and buying sustainable goods, these respondents adhered to these frameworks relatively consistently, so the way participants characterized “sustainable” and “unsustainable” brands was basically consistent across responses.

Affective Qualities of Sustainable and Unsustainable Brands: Participants were also likely to associate “sustainable” and “unsustainable” brands with different affective qualities. Sustainable brands were characterized as brands from companies with “authentically sustainable business practices” as well as a “concern” for communities, the environment, and their employees. For instance, Participant 29 considered SunChips authentically sustainable because they were engaged in operating sustainably before it was popular.

They were doing that a few years before the whole fad, to my knowledge, and so I think it’s something they actually care about – it’s a priority to the corporation or its directors that “this is our model, this is our marketing, this is who we are. Participant 29 #29-31

Participant 22 characterized Ben & Jerry’s as authentically sustainable because of the company was started with sustainable values in mind.

I can't say…that I put that much research into the sustainability of Ben & Jerry's, but knowing how they started...just like together as like these two liberal guys and everything like that. And although it has grown to this huge corporation I feel like they still have some moral, more progressive values behind what they do. Participant 22 #10-14.

Regarding a company’s concern for communities, people, and the environment, Participant 11 noted that SunChips might be considered sustainable because it is healthy, which is good for people and may reflect a larger concern for workers and the environment.

I felt they probably wouldn't be as bad as someone like Lays because of the fact that like the product itself is marginally more healthy, so maybe that like translates into a little bit of a greater consciousness about workers rights and environmental rights. Participant 11 #84-87

Participant 17 was willing to sort Timberland into the sustainable category based on the fact that they seem to care about nature.

They have a tree on their logo, and if you care about trees and the outdoors, then you are probably sustainable in some capacity. Participant 17 #333-334

Participant 26 noted that she would be more willing to sort companies who are engaged with the community into the sustainable group. Interacting with members of the community is associated with concern on the part of the business.

For a company to be well-rounded I think that the company should just interact on a more personal level with the people it’s working to serve -- the people who purchase the products. Participant 26 #473-475

Unsustainable brands, on the other hand, were characterized as brands from companies that had either no sustainable business practices or sustainable claims based on minimal actions and falsely constructed images of sustainability. For instance, when Participant 38 talked about whether one should trust organic labels, he alluded to the notion that some companies would purposely lie to consumers to sell sustainable products.

They don’t realize that words like organic can be like argued for if they were actually like contested. Someone could easily just say like well yeah, it’s organic because I do this one thing and, you know, I am not claiming that I do all these other things, I just say it’s organic. And I think a lot of companies are exploiting that, because people are really getting into like eco, into anything that you put “eco” in front of they’re like, “Oh, that’s environmentally friendly, I’ll pay an extra like 50 cents for that.” Participant 38 #110-115

Similarly, Participant 26 noted that SunChips should not necessarily be considered sustainable regardless of how it is marketed because a company that does not exude sustainable qualities owns it.

I think it does help Frito-Lay's image, to have this company that's considered healthier and made through means that don't harm the environment as much. So I think it does help Frito-Lay as a brand, but it also kind of takes away from the impact that SunChips have, because they are made by this giant conglomerate that doesn't necessarily stand for sustainability. Participant 26 #130-13

The Semi-Structured Interview Process

Great news! I have finished collecting all of my data and have begun to analyze it using grounded theory. Data collection consisted of an online survey, followed by semi-structured interviews with 20 willing participants.

These interviews took about an hour each, so getting them transcribed was quite a task. Luckily someone invented Mechanical Turk, a crowd-sourcing website, which gave me access to a bunch of humans who were willing to transcribe these interviews (for a little money). It is a great resource, and it saved me the onerous task of transcribing all 20 hours of interviews.

Now, lets go into a little detail about what the interviews consisted of. They were semi-structured, which means that I did not have a fixed set of questions to ask. Rather, I allowed myself the freedom to ask different questions to each interviewee depending on what he/she said.

To get my interviewees talking about the issue of sustainability as it relates to both social and environmental concerns I devised a series of (index card) sorting exercises. These exercises were intended to get my interviewees to share what brands strike them as sustainable and why (Exercise 1). I also wanted to find out how my participants ‘believe’ any company ‘should’ act (Exercise 2). Finally, I wanted to explore whether any of the brands from Exercise 1 could be associated/disassociated with the behaviors the interviewee had identified as ‘important’ during Exercise 2 (Exercise 3).

A more robust description of each exercise follows:

Exercise 1: Please sort these branded cards according to how sustainable you believe them to be. Create three groups: sustainable brands, unsustainable brands, and brands of unknown sustainability. You may have as many or as few cards in each group as you wish, but you must sort all the cards into one of the piles.

1. Adidas
2. American Apparel
3. Ben & Jerry’s
4. Chipotle
5. Chiquita
6. Haagen Dazs
7. Kettle Chips
8. SunChips
9. Timberland
10. Urban Outfitters

Once participants sorted these brands I asked a series of questions to explore the participant’s reasons for sorting the brands into the groups they did.



Exercise 2: Please sort these behavior cards in to a hierarchy according to how important it is to you that a company engages in each of these activities. Behaviors may tie for a position on the scale. If one or more of these behaviors is not important at all to you, please do not include the card in your ranking system.

1. Employees may organize and bargain collectively
2. Company is actively working to reduce energy and resource consumption
3. Company is working to reduce the amount of waste it creates
4. Company employs independent monitors to oversee overseas production
5. Company practices environmental stewardship even if the country it operates in lacks environmental regulations
6. Employees have freedom from forced labor
7. Company is engaged with the community and supportive of it
8. Company employs metrics to measure and manage energy consumption
9. Employees earn a living wage
10. Employer sponsors job-related education programs for employees
11. Company routinely collaborates with non-profit groups

It is noteworthy that none of these behaviors include corporate behavior related to the accumulation of profit. For this research I took it as granted that companies are expected to generate profit in order to fulfill responsibilities to stockholders, so I chose to focus this exercise particularly on behaviors that tend to be associated with sustainable businesses. After the participants sorted the eleven behaviors into a hierarchy I asked them to explain why they felt compelled to place the behaviors where they did on their respective hierarchies.



Exercise 3: Please use the groups of branded cards and your hierarchy of behavior cards to answer the following question: Do you associate/disassociate any of these brands with the corporate behaviors you identified as important?

///

So, that’s the long and short of my interview process. I have begun coding (to identify key points) the transcripts using grounded theory. From there I will begin to elucidate a theory to explain the themes that emerge – that’s the interesting part, so stay tuned!

After Hiatus + Project Abstract

It has been a while since my last entry. The project took me on quite a ride throughout the month of December, which resulted in some changes to my methodology. Now, rather than collecting my data solely through online surveys, I will be employing a two-step data collection process, which includes a large-scale online survey as well as semi-structured interviews with some willing respondents.

These methodological changes required me to resubmit my study to the Institutional Review Board (IRB) for approval.

Happily, I am to the point in the project where I can begin collecting and analyzing data. I will be putting my online survey into the field very soon, and from those responses I will select 20 interviewees to participate in the semi-structured interview portion of data collection.

With any luck I will have some interesting findings to share soon. Until then, perhaps you could entertain yourself with the project abstract.

Abstract:

Although American consumers have begun to demand more environmentally and socially sustainable products, people may not always have the information they need to differentiate between brands on the basis of social and environmental performance. I will explore this phenomenon with a series of semi-structured interviews designed to discern and examine the types of information Northwestern students use to make decisions about sustainable brands. I will also evaluate the importance of sustainable business practices to students, and ask them to identify companies that exhibit these behaviors. I plan to collect detailed data about the type of information respondents use to evaluate sustainable brands as well as why and how people come to associate a particular company with sustainable or unsustainable behavior.

Measuring Sustainability Practices

An important portion of my project includes asking my survey respondents to identify which of two companies in a pair manufactures its products in a sustainable way. Of course, an objective standard of "sustainability" is hard to come by, so how could I truly ask my respondents to differentiate these companies?

One of the best known sustainability measures is the Dow Jones Sustainability Index, which was launched in 1999 to enable people to track the financial performance of the leading sustainability-driven companies. Each year it releases a review of the companies in the index and ranks them based on their environmental, economic, and social performance. The companies, of course, use their nomination to get a little good PR about their eco-friendly behavior. Research suggests, however, that DJSI tends to have a large cap bias. In other words, it tends to be biased toward larger corporations. (Cerrin & Dobers. (2000). What does the Dow Jones Sustainability Group Index tell us?)

Joel Makower of GreenBiz.com notes that consumers shouldn't get too excited if a company is named to the DJSI because "it isn’t really a marker for 'green.'" Although he agrees that there may be some truth to DJSI claims that these companies are the "leading sustainability-driven companies," Makower also notes that being named as a component of the DJSI doesn't necessarily mean that these companies have comprehensive green policies and practices, let alone performance. (Is the Dow Jones Sustainability Index Worth a damn? @ grist.org)

In the absence of any truly objective measure of sustainability, I wanted to make sure the companies I chose for my pairings could reasonably be distinguished by their commitment to sustainability. In order to do this, I spent a lot of time reading through company reports like 10ks, sustainability & CSR reports, corporate labor codes, and annual reports to try to get an understanding of each company's practices in three areas, respectively: environmental impacts, labor standards, and community engagement.

In the following posts, I will detail the 6 pairs of companies I have selected for this project. By exploring each company's commitment to protecting the environment, upholding labor standards, and benefiting the communities they are located in, I hope to present an accurate picture of the company's sustainability efforts. Since the pairs were selected based on how differently the companies operated, the information should give the reader a good idea of which company should be voted the "most sustainable" of the pair.