We each make choices every day—about what to buy, what to eat, when to recycle, and whether to walk, drive, or take public transportation. While these can feel like highly individual choices, behavioral economics has shown that consumers are highly susceptible to environmental and social cues. Given that consumers’ decisions have consequences—for personal well-being and the health of the planet—companies could play a role in steering consumers to make sustainable choices. It’s as simple as giving them a nudge.
Popularized by Richard Thaler and Cass Sunstein in their book Nudge: Improving Decisions About Health, Wealth, and Happiness, nudges are simple, low-cost interventions that can alter people’s decision making without attaching a substantial economic reward or penalty to the process.
One purpose of nudges is to help people be the best version of themselves—to make the choices that they would make if their executive function, willpower, and long-term thinking were firing on all cylinders. As consumers increasingly demand more environmentally and socially conscious choices, nudges can nurture and facilitate their desire to live sustainably, accelerating demand for sustainable products and services. That demand, in turn, can help build attractive markets for investment and propel the sustainability transformation forward.
Whether they intend to or not, companies already shape behaviors, so they could encourage environmentally and socially conscious ones instead. A travel portal may rank comparable flights on the basis of price and flight time, for example, but it could rank them on the basis of carbon emissions. Food delivery platforms may promote popular restaurants or their sponsors, but they could elevate climate-friendly food options instead. By examining the current options offered to customers and seeking ways to nudge them toward sustainable choices and behaviors, a company can empower its customers to meet their personal sustainability goals, enhance the company’s brand, help build sustainability markets, and protect the planet.