Consumer Perception of a Company's Sustainable Practice Initiatives

Carbon taxes are a complex topic – doubly so in the context of corporations. Given the impact that corporations have on the environment, it is critical to understand how they can best be incentivized to divert resources toward sustainable practices. In a recent study we assessed how corporate action on climate change — especially in response to carbon pricing policies—influences consumer attitudes towards the company and how interested they are in being their customer. Our hypothesis was that, due to the Halo Effect, positive behaviors in one area would translate to generally favorable evaluation of the companies.

In order to test this hypothesis, we created an online experiment using a sample of 118 Canadians. We provided the same information about a set of companies investing in sustainable energy. In one condition, we said that this was done in compliance with regulations. In the other condition, we framed the investment as a choice on the part of the company. Our experiment sought to answer two key questions:

1. How does a company’s perceived participation with carbon pricing affect consumer evaluations of companies?
2. How does a company’s perceived participation with carbon pricing influence public support for carbon pricing?

We found that the consumers were significantly more willing to engage in business with companies that were framed as green.

Consumers were significantly more likely to describe the company that invested in carbon-reducing activities in favourable terms.