Evidence-Based Sustainability: Shaping Consumer Choices through Behavioural Insights
In the quest for sustainability, integrating behavioural science offers a powerful avenue for shaping consumer behavior towards more eco-conscious choices. By understanding the psychological factors that influence decision-making, businesses and policymakers can design interventions that nudge individuals towards sustainable actions. Leveraging behavioural insights, such as default options and nudges, allows for subtle yet impactful changes in consumer behavior without impeding freedom of choice. For instance, setting environmentally friendly options as the default choice for consumers, unless actively opted out, can significantly increase adoption rates of sustainable practices.
At EcoNudge, we have undertaken similar initiatives in the past, collaborating with various organizations to promote sustainability among individuals. For instance, we partnered with a climate fintech company to enhance users’ carbon literacy, resulting in an 8% increase. Additionally, we identified a feature within their platform enabling users to commit to an 18% reduction in their carbon footprint. Presently, we are conducting efficacy tests on an app designed to enhance sustainability efforts for corporate social responsibility (CSR) purposes. Here are some other ways how organisations leverage behavioural science principles to create evidence-based climate action:
Transparency and Information Accessibility: Behavioural science suggests that people are more likely to make informed choices when information is easily accessible and clearly presented.4 Example: The EU Ecolabel and Energy Star labels provide consumers with easily accessible information and the environmental performance of products, helping them make informed choices.
The Energy Star label is a government-backed symbol that identifies energy-efficient products, homes, and buildings (USA). The label was introduced by the Environmental Protection Agency (EPA) in 1992 to help consumers identify and purchase energy-efficient appliances and products that meet certain efficiency standards.
The EU Ecolabel is a world-renowned voluntary scheme promoting goods and services that clearly demonstrate environmental excellence, based on standardised processes and scientific evidence.
Social Norms and Social Proof: Behavioural science shows that people are influenced by the behaviour of others.5 Highlighting companies that genuinely prioritize sustainability and showcasing their practices can create positive social norms. Example: The Fair-Trade movement has successfully leveraged social norms to promote ethical consumption by highlighting the growing numbers of consumers and businesses participating in fair trade practices.
Default Options and Nudges: Leveraging default options can influence consumer behaviour and guide them towards more sustainable action without restricting their freedom of choice.6 For instance, companies can make environmentally friendly choices the default option for consumers unless they actively opt-out. This could include defaulting to paperless billing, energy-efficient settings, or eco-friendly product alternatives. Example: Opower’s energy efficiency recommendations have saved more than 32 terawatt hours of energy and $3.3 billion off energy bills. Their digital platform allows residential customers to compare their energy usage with similar homes and receive personalized tips on how to save energy. Social comparison is a powerful motivator to action and incentivizes people to adjust their behaviors and actions accordingly.7
Social comparison allows energy users to compare their performance against other similar households and motivates them to improve their energy usage or keep up their performance.
Public Policy Intervention: Behavioural science can aid in testing the effectiveness of public policy interventions aimed at encouraging sustainable behaviour and practice among its citizenry.8 Example: Notably, the United Kingdom established the Behavioral Insights Team over a decade ago, advising the government on various policy domains, such as tax compliance, energy conservation, public health, and retirement savings. Recognizing its importance, the United Nations advocates for an evidence-based understanding of human behavior to enhance the success of public policy interventions and is also investing heavily in that space.
Through transparency, leveraging social norms, nudging towards sustainable choices, and implementing effective public policies, businesses and policymakers can help shape and nudge customer behaviour to towards more sustainable choices.
