How to make People want to pay for Green

Satisfying the Wallet and the Soul

This is a five-part series, you’ll find the link to each individual post at the end of this one.

You’ve been there before.

Shopping for groceries, really looking forward to the avocado salad you’ll make yourself when you get home. The only ones on display come from Peru… “Ah screw it, two or three avocados won’t make a difference and they’re here already anyways.”

Planning for holidays with your best friends. Paris — Glasgow, this year you’re going local. Ah, but flying is 130€ and 3 hours less than the train… “Screw it, I’ll offset my flights. I mean, I already pay close attention to where my food comes from AND I eat less beef.”

Out for new sneakers. This time around you’ll go for something like Veja or Faguo, those guys really do something about their footprint. But in the aisle your eye’s caught by a gorgeous re-edition of the original Air Jordans. “Damn, The Last Dance was awesome… Ok, yes, sustainable production is important, but MJ just inspired me so damn much…”

You’re not alone.

As far back as 1995, a Eurobarometer study (1) showed that 82% of Europeans considered the environment an “immediate and urgent problem”, with only 14% seeing it as “more a problem for the future”. And this was before the Kyoto Protocol (‘97), An Inconvenient Truth (‘06), the COP21 (’15), Greta Thunberg (≥’17) or even South Park’s acknowledgement of ManBearPig (’18). Meaning in Europe we’ve collectively been hoping to green up our act for at least 25 years.

But as German social psychologists Andreas Diekmann and Pieter Preisendörfer have observed (2):

[…] aspirations and reality do not appear to go hand-in-hand. Despite a high degree of environmental consciousness, […] everyday experience points to obvious inconsistencies between verbal claims and actual behaviour.

Because what’s really changed since 1995? Ok, sure, a zillion things. But if we’re just honest with ourselves, things ain’t gotten much better: Putting our money and our actions where our mind is doesn’t come easy.

Not that it’s surprising: We define progress by how much we consume (aka GDP) and judge our elected representatives on their ability to grow what we consume year after year. If all of that consuming happened within the bounds of what the Earth can provide then hurray, humans would be acing the “Preserve The Future Of Your Species” test and happily consuming ever after.

By 2020 though, it’s pretty obvious we’ve flunked the mid-terms and are behaving like an Adderall-intoxicated college student praying for a last-minute miracle after many many weeks of partying.

And Adderall-intoxicated College Student (AiCS) is getting pre-finals panic attacks about that miracle, realising that:

• Contrary to what Industrial Revolution economists considered an axiom (3), Earth’s natural resources are finite, which is a bit of a bitch for infinite growth.
• Wildlife populations have declined close to 70% over the last 50 years (4), which totally sucks for AiCS’s future honeymoon safari.
• The greenhouse gases emitted as collateral damage of the production of our stuff is modifying the climate to the point where AiCS will soon have to enjoy his stuff with his feet wet, or, like, super dry. And hot. And/Or running away from fires. And/Or hurricanes. And/Or tiger mosquitoes too.

So, sure, we’ve never lived as long, owned as much stuff, been as interconnected and had access to as much scientific and cultural enlightenment as today.

But the GDP growth that got us here will also drive us right back into the ground. Annoying, when you have in mind our economies, social contracts and institutions were designed to depend on that growth. So the big question now is: Should we be consuming better, or consuming less?

Short answer: “Both”.

Better: Travel fosters cultural openness, so we really need to find less carbon-intensive ways to keep getting around.
Less: 2 months of lockdown in my girlfriend’s apartment showed me I can be perfectly happy with 3 t-shirts in my life instead of 30, ergo I can definitely break myself free from the grip of fast fashion (5).

My day job is Marketing, academically defined (I’m sure) as “Making people want your stuff”. Making them want less t-shirts is not yet part of the job desc, so no one’s asked my professional opinion on that to date.

I was, however, asked last year to contribute to the “consuming better” debate in the form of a guest lecture with ESSEC Business School’s 2019 Cleantech Entrepreneurship class and wanted to put it all in writing.

Making people want Green stuff

The lecture title was the following:

“How to deal with customers that may appreciate green, but don’t want to pay for it?”

Let’s first define “Green” with a quick categorisation of my own making:

• Category 1: A product or service that offers equivalent benefits to existing alternatives, with a reduced environmental footprint.
  Ex: Faguo, 900.care, Tesla, Ecosia, Veja, Beyond Meat, Ÿnsect
• Category 2: A product or service that offers a replacement for existing but structurally unsustainable consumption patterns and involves a change in consumer behaviour.
  Ex: Cowboy and VanMoof e-bikes to replace cars in cities, local “pick your own fruit & veg” farms to replace grocery stores buying from Peru & New Zealand
• Category 3: A product or service that is new (i.e. no alternatives yet) and designed to help consumers reduce the environmental footprint of their other consumption habits.
  Ex: Yuka, Greenly, Plume Labs, Too Good To Go

My Cat. 3 examples skew towards free-to-access digital services over goods. There are probably way more “physical object” examples out there.

When I gave the lecture I was working for Plume Labs, a Category 3 startup in Paris. What I realised there is that when you promote a brand that self-identifies as “Green”, it’s pretty hard not to reap cynicism, or even to keep the discussion on track. In the FMCG industry (6) for example, price premiums of organic products will pull the debate towards income inequality. In all businesses, full-scope carbon footprint analyses (7) can have claims of product green-ness dismissed as gimmicks since no product is really green. Energy consumption questions inject fatalism about the inertia of national energy mix strategies. And accusations of greenwashing will be thrown in whatever happens for good measure.

Because of the above and to be more specific, when we’re talking about “Green”, we really mean “Green-er”. Launching a full-scope-carbon-neutral product from scratch today is quasi-impossible. But that shouldn’t stop you from aiming for “Green-est”.

The scenario I worked with for the lecture was the following: There’s this industry you’re passionate and/or knowledgeable about. You know how it works, you’re convinced it still belongs in the new world and in your mind you see a clear path to a new, greener version of traditionally not-so-green product(s). How would you go about convincing people your greener alternative is worth the extra money it costs?

Starting point: Consumer Inertia

I opened with the following question:

“If you strongly believe that not making significant changes to our societal consumption patterns ASAP means that in the not-so-very-long-term, we’re all fucked, please raise your hand”. (8)

All hands went up. Then the follow-up question:

“If you’ve already significantly changed your individual consumption habits accordingly, please keep your hand up”

3 or 4 hands were still in the air.

We’re back to our opening 82% number from 1995. If only 10% of a cohort of bright, eco-conscious ESSEC students are actually doing something about greening up their consumption, it must mean that at the very least, paying for Green doesn’t come naturally.

But, wait… why should Green have to mean “more expensive” in the first place?

The cost of solar energy and lithium-ion batteries has plummeted over the last decade, for example. Surely that means it’s just a question of time and market mechanics to make Green cheap?

Not really.

“Green” means adding constraints to your production costs, many of which will seem irrational from the viewpoints of market-based price-making and the international division of labour that have been the bedrock of 150 years of GDP growth.

Let’s take two examples:

• Example 1: Avocados 🥑
  Carbon footprint: The distance between the producer and the consumer is the biggest factor: If you live in Paris and have a Peruvian avocado on your plate, your meal contains a lot more indirect carbon emissions from air or sea transport than the locally-grown variety. And, Peruvian and Parisian avocado pickers not being payed the same salary, local will mechanically cost more in Western countries.
  Organic: Growing organic fruits and vegetables means respecting a whole set of standards by which you will rule out things like pesticides and mechanisation that were invented to increase yield in the first place. So less yield from the same surface = higher price. Organic is also not a regulatory obligation: You’re choosing to be more expensive.
• Example 2: Smartphones📱
  Social Responsibility: Fairphone is a Dutch company that builds to “fair specs”: Fairtrade gold, conflict-free minerals, living wage for factory workers. Standards like Fairtrade are only worth something if demonstrably enforced, which means setting up the chain of accountability to do so. A lot more costly than your good old child labour in mines of the DRC. (9)
  Economies of scale: Fairphone probably sells devices in the tens of thousands. In 2019, Apple sold 40.8 million iPhones. Producing in the millions is a much more efficient way of reducing the burden of your fixed costs for your end consumer than producing in the tens of thousands — no-one has yet found a way around that.

Coming back to the example of solar energy & lithium-ion batteries, plummeting costs have to do with the fact that China produces over 70% of the world’s solar modules, controls 77% of battery cell capacity and 60% of component manufacturing (10). Standard international division of labour with all of its embedded carbon emissions.

“Green”, as an adjective, is really a reaction to business as usual. Doing things more responsibly, going “above and beyond” regulations. Not that business-as-usual businesspeople revel in the delight of irresponsibility: Business-as-usual was designed to bring costs down to their lowest possible point. It’s the homo œconomicus rationality of eco-constraint-free capitalism and it’s what consumers want.

You’d wish you could say it’s what consumers used to want but the research tends to disprove that. A 2003 paper by Diekmann and Preisendörfer (11) set about demonstrating what they called the “Low-Cost Hypothesis”:

The lower the pressure of costs in a situation, the easier it is for actors to transform their attitudes into corresponding behavior. If costs are high, environmental concern does not help overcome one’s reservations, and there will be few or no effects of environmental attitudes.

When plotting the results of ~1,000 responses to a self-reported questionnaire administered in Germany in 1996, the negative correlation between personal cost and upholding of one’s environmental concerns is pretty clear (12):

Published more recently, a 2013 study by CONE (13) showed us that indeed, (nearly) everyone’s perfectly happy to consume greenly as long as it doesn’t cost them more:

91% of global consumers are likely to switch brands to one that supports a good cause, given similar price and quality.

(emphasis mine)

But as demonstrated, increase the cost and the enthusiasm is really hard to keep up.

Therefore when we’re trying to “Make People want to pay for Green”, we’re essentially attempting to overcome their preference to “demonstrate their ‘environmental correctness’ in low-cost or ‘alibi’ areas” (Diekmann & Preisendörfer, 2003).

How do you do it?

I recommend a three-step process.

Step 1: Green as a Mission

Step 2: The right Product, the right Time

Step 3: Surviving Green Cynicism

Next → Part 2/5: Green as a Mission

Part 3/5: The right Product, the right Time

Part 4/5: Surviving Green Cynicism

Part 5/5: “Widening the Green lens”

Notes & Sources

1. For this figure, I came across a similar one in an academic paper referencing an academic paper referencing another academic paper containing that number (in German) 🤯
   I reached out to the author of the second paper who very kindly pointed me to the author of the third, who cc’d in his assistant to scan for me a hard copy of his work from 1995 and thus who found the original reference (and shared some extra reading relevant to the topic). My sample is small, but academics do seem to be very nice and helpful people!
   Paper 1: John Connolly & Andrea Prothero (2003) Sustainable consumption: consumption, consumers and the commodity discourse, Consumption, Markets and Culture, 6:4, 275–291, DOI: 10.1080/1025386032000168311
   Paper 2: Resich, Lucia (1998). Sustainable consumption — three questions about a fuzzy concept. CEC Working Paper №13 / CeSaM Working Paper №1, September 1998. Copenhagen: Copenhagen Business School
   Paper 3: Diekmann, Andreas (1995). Umweltbewusstsein oder Anreizstrukturen? Empirische Befunde zum Energiesparen, der Verkehrsmittelwahl und zum Konsumverhalten. In: A. Dieckman & A. Franzen (eds.). Kooperatives Umwelthandeln. Modelle, Erfarhungen, Massnahmen, pp. 39–68. Chur/Zurich: Rüegger
   Original reference: “Europeans and the Environment”, Study conducted conducted in the context of the Eurobarometer 43.1 (1995), https://ec.europa.eu/commfrontoffice/publicopinion/archives/ebs/ebs_088_en.pdf
2. “Environmental Behavior, Discrepancies Between Aspirations And Reality”, in Rationality and Society, vol.10, 1998
3. Jean-Baptiste Say, “Traité d’Économie Politique” (1803): “Natural resources are inexhaustible, for were it not the case, we would not be able to obtain them for free. Since they can be neither multiplied nor exhausted, they are not an object of study for economic sciences” — lifting this quote from Jean-Marc Jancovici
4. WWF 2020 study, referenced on the EU Science Hub: https://ec.europa.eu/jrc/en/science-update/wwf-living-planet-report-2020-reveals-68-drop-wildlife-populations
5. Yes, ok, that’s a pretty un-scientific oversimplification of an example. And if we all stopped buying as many t-shirts a lot of people would end up jobless. But that just means there is economic reinvention to be done. Schumpeter made us comfortable with the idea of creative destruction in theory, but obviously you don’t feel the same way when your job’s concerned.
6. FMCG = Fast-Moving Consumer Goods, think Nestlé, PepsiCo, General Mills, Kellogg’s, Danone, among others… and all of the organic brands that offer greener alternatives to their products.
7. See here for a quick explanation: https://compareyourfootprint.com/difference-scope-1-2-3-emissions/
8. I’ll readily admit to using the f-word and channelling my inner Tony Robbins for gravitas when teaching. It’s pretty hard to keep people’s attention away from their phones these days 🤷‍♂️
   (if you’ve never given the subject much thought, do watch Social Dilemma and read Stand Out Of Our Light)
9. Veja, for example, have a great and honest way of explaining their choices and the associated costs, namely with things like Fairtrade certifications: https://project.veja-store.com/en/single/limits
10. The Economist, “Energy’s new world order”, September 19th 2020
11. Andreas Diekmann and Pieter Preisendörfer, 2003, “Green and Greenback, The behavioral effects of environmental attitudes in low-cost and high-cost situations”, Rationality and Society 15(4), pp. 441–472
12. Two things here:
    - For sure, 1996 is some pretty old data. I’m pretty confident however that human behaviour hasn’t radically changed since then.
    - What the authors look at here is not just economic but also behavioural cost, ex: switching to train transport instead of air — it might be more expensive but it will also mean I will have to change my habits and maybe it will mean longer travel times.
13. Cone Communications/Echo Global CSR Study, 2013: https://www.conecomm.com/news-blog/2013-global-csr-study-release