Institute of the Environment and Sustainability

The environment has traditionally been the domain of nonprofit organizations. For decades, nonprofit organizations have worked to reduce the negative impact of market-based activity on the environment. However, more recently nonprofits have started to adopt the methods and values of the market to achieve sustainability goals. One of the primary strategies that nonprofits use is to disclose, or pressure corporations to disclose, information about the environmental impact of their products and processes. These information disclosure strategies seek to help stakeholders make green purchases or invest in corporations that use green practices, thus incentivizing corporations to reduce their negative environmental impact. In this chapter, we review the benefits and the challenges encountered by nonprofits in their attempt to use information disclosure strategies.

Little is known about the effectiveness of information strategies on energy conservation in developing countries. In this study, we conduct a field experiment in an apartment complex in India to test how information about electricity usage impacts the electricity consumption of urban middle class households. Our results, based on fifteen-minute electricity readings over an academic year, show that nonmonetary messages that framed electricity consumption in terms of environmental and health impacts were more effective than messages emphasizing the monetary savings of reducing electricity consumption. Households in the environmental/health group accessed the online energy-monitoring dashboard more frequently and reduced their electricity usage by 18.4% relative to the control group. Households in the monetary group did not significantly alter their usage. These results about revealed preferences are contrasted with stated preferences disclosed in a survey of urban Indians who describe money, not health, as the main motivation for energy conservation. Our findings have important implications for the development non-monetary strategies for energy conservation in developing countries.

We propose a model that identifies the configurations of relations between environmental practices and other management practices that can improve employee performance, measured as labor productivity. To test our model, we use the qualitative comparative analysis (QCA) methodology, which allows us to demonstrate empirically how different configurations of management practices, including environmental practices, quality management systems, teamwork, and interorganizational relations, contribute to work systems in ways that increase labor productivity. Our results, based on data from 4,975 employees from 1,866 firms, show that environmental practices are associated with higher labor productivity only when they are combined with other management practices.

Little is known about the effect of message framing on conservation behavior over time. In a randomized controlled trial with residential households, we use advanced metering and information technologies to test how different messages about household energy use impact thedynamics of conservation behavior down to the appliance level. Our results, based on 374 million panel observations of kilowatt-hour (kWh) electricity consumption for 118 householdsover 9 months, show that differences in behavioral responses due to message framing become more significant over time. We find that a health-based frame, in which households consider thehuman health effects of their marginal electricity use, induced persistent energy savings behavior of 8-10% over 100 days; whereas a more traditional cost savings frame, drove sharp attenuationof treatment effects after 2 weeks with no significant savings versus control after 7 weeks. We discuss implications for the design of effective information campaigns to engage households inconservation behavior.

Experimental studies are a valuable tool to test effective strategies for encouraging sustainable behavior but have not been used much in corporate sustainability research. In this article, we describe the benefits and challenges of the randomized field experimental method for research in corporate sustainability. We draw on the examples of our own research in energy conservation behavior to illustrate some of the hurdles that need to be overcome for the successful implementation of field experiments.

Eco-labels are part of a new wave of environmental policy that emphasizes information disclosure as a tool to induce environmentally friendly behavior by both firms and consumers. Little consensus exists as to whether eco-certified products are actually better than their conventional counterparts. This paper seeks to understand the link between eco-certification and product quality. We use data from three leading wine rating publications (Wine Advocate, Wine Enthusiast, and Wine Spectator) to assess quality for 74,148 wines produced in California between 1998 and 2009. Our results indicate that eco-certification is associated with a statistically significant increase in wine quality rating.

In 2013, the energy and natural resources sector spent $359 million lobbying. Such spending is largely perceived as a strategy by industry to oppose regulation. Research has barely begun to investigate how firm-level performance on salient political issues affects corporate political strategy. In this paper, we address this issue in the context of the recent climate change policy debate in the United States. We hypothesize a U-shaped relationship between greenhouse gas (GHG) emissions and lobbying expenditures. To test our hypothesis, our study leverages novel data on firm-level GHG emissions and lobbying expenses aimed specifically at climate change legislation. Our results based on 3,194 firm-observations during a 4 year-period, suggest that both dirty and clean firms are active in lobbying, which challenges the view of adversarial corporate strategy.

This study uses hourly appliance-level electricity consumption data for 124 apartments over 24 months to provide a better understanding of appliance-level electricity consumption behavior. We conduct our analysis in a standardized set of apartments with similar appliances, which allows us to identify behavioral differences in electricity use. The results show that households’ estimations of appliance-level consumption are inaccurate and that they overestimate lighting use by 60% and underestimate HVAC and plug-load by 40%. We find that similar households using the same major appliances exhibit substantial variation in appliance-level electricity consumption. Additionally, we show that behavior accounts for 25-58% of this variation. Lastly, we find that replacing the existing refrigerator with a more energy-efficient model leads to overall energy savings of approximately 11%, which is equivalent to results from behavioral interventions targeting all appliances but might not be as cost effective. Our findings have important implications for behavior-based energy conservation policies.

Eco-labels emphasize information disclosure as a tool to induce environmentally friendly behaviors by both firms and consumers. The goal of eco-labels is to reduce information asymmetry between producers and consumers over the environmental attributes of a product or service. However, by focusing on this information asymmetry, rather than how the label meets consumer needs, eco-labels may send irrelevant, confusing or even detrimental messages to consumers. In this paper, we investigate how the environmental signal of eco-labels interacts with product characteristics such as brand, quality and price. In a discrete choice experiment the authors examine consumer response to two similar eco-labels for wine, one associated with a quality reduction and the other not. Our results show that respondents preferred both eco-labeled wines over otherwise identical conventional counterparts, when the price was lower and the wine was from a lower quality region. However they preferred conventional more expensive wine from a high quality region. This indicates that respondents obtain some warm glow value from eco-labeled wine, but also possibly interpret it as a signal of lower quality. This relationship held across both types of eco-labels, meaning that consumers did not understand the difference between them. Our research contributes to the literature on information disclosure policies by highlighting important elements for effective eco-labels. These include consumer awareness and understanding of the eco-label, and consumer willingness to pay for an eco-labeled product. Our research emphasizes the need to create eco-labels that communicate clearly both the environmental attributes and the private benefits associated with them.