Consumer evaluation trade-off: sustainability liability and role of centrality of green attributes.

Abstract

In recent years, we have seen the rise of environmental problems, both in numbers and severity. These issues are gaining traction on news outlet, social media, and there’s not a day goes by that we don’t see them on our devices: rising sea level, warming of the ocean and atmosphere… With the rise of these global problems, so too is the rise of global consumer awareness on sustainability and their power to contribute to the cause by purchasing more environmentally green products.

From a business perspective, this sustainability trend serves as a great opportunity, and has led to remarkable growth in the global market for environmentally friendly products. In fact, we have seen the birth of many successful multinational companies whose mission is to alleviate these environmental issues. Two great examples are Impossible Foods and Beyond Meat, which are founded to combat the environmental impacts related to livestock farming. Older companies such as H&M or Unilever have also adapted to the trend by launching new sustainable product lines. The decision by companies to improve their corporate social responsibilities through being more sustainable has been shown to increase firm performance and financial performance. Going further than firm performance metrics, companies can use their CSR as a form competitive advantage. In other words, if a company can afford to improve their CSR, it should. This is easier said than done, however, because not all companies have enough resources like Unilever or H&M to invest in sustainability, or have their company identities so closely linked to sustainability like Beyond Meat and Impossible Foods. For such companies with limited resources, one popular way to respond to the sustainability trend is to introduce components made with materials that are less harmful to the environment. This creates a problem for companies because there are no guidelines for choosing the right component that would benefit them the most, which leads to the main problem of this study: How can companies, with their limited resources, get the highest value for their sustainability investment?