Saturday, August 21, 2010
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.
[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.
Wednesday, July 14, 2010
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.
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.
Friday, July 2, 2010
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…
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…
Subscribe to:
Posts (Atom)