Brought to you by Joshua Aseto and Marianne Isabel Magnus Melgar from CSCP 

In today’s rapidly evolving market, businesses and consumers alike are becoming increasingly conscious of the environmental impact of their choices. The push towards a sustainable circular economy, where resources are reused and waste minimised, has never been more critical. 

In particular, consumers play a crucial role in shaping the business landscape through their market power but also through their everyday lifestyles. This begs the question: How can we support individuals in strengthening more sustainable consumption habits and thus practising a more sustainable lifestyle? 

The Role of Consumers 

In a world where it’s fashionable to have the latest model and upgrades, choosing to repair or buy refurbished, or opting for products and services that are designed with sustainability in mind, constitute individual actions that hold the key to greater sustainability and circularity on a systemic level.  

These daily decisions of consumers, whether conscious or unconscious, have a significant impact on the health of our planet. By aligning their consumption habits with sustainability principles, consumers can influence market dynamics and encourage businesses to prioritise environmental stewardship. 

Factors Affecting Consumer Behaviour

Several factors can influence consumer behaviour in the context of sustainability and circularity. Research shows that economic considerations, such as price and perceived value, often play a significant role in decision-making. Consumers may hesitate to choose sustainable options if they perceive them as more expensive or less accessible than traditional and linear alternatives.  

Additionally, the fit between consumer preferences and available products/services impacts choices. This embraces the dimension of availability, quality, performance, and characteristics of products and services. Though growing, the supply of sustainable circular solutions is often limited, and this affects the costs of access. 

Furthermore, consumers are only able to make informed consumption decisions if they fully understand the specific characteristics of sustainable circular solutions and information is communicated as transparently as possible, e.g., about the product’s environmental impact. The availability of easy-to-understand information is therefore key. For this reason, the development of digital product passports is currently one of the most pressing endeavours to facilitate access to information for consumers as key players in the value chain. It should be noted that greenwashing can distort consumers’ understanding of the impact of their choices.  

However, the Green Claims Directive is intended to remedy this situation in future. It will establish clear and transparent standards for the use of environmental claims for companies’ products and services to prevent greenwashing and misleading consumers. 

Social norms, cultural practices and the influence of prominent figures, such as role models and reference groups, significantly shape consumer choices, underscoring the role of social factors and revealing the complexity of influencing sustainable choices. 

Finally, individual consumer preferences and beliefs significantly influence an individual’s propensity towards certain products or services. These include all dimensions of consumer needs such as comfort or convenience, prestige, value assigned by the consumer to environmental characteristics, brand loyalty as well as other personal values (e.g., materialism). Shifting these ingrained preferences and beliefs is a complex process that often requires a gradual evolution of cultural norms. 

Influencing Consumer Behaviour Using Green Nudges

Influencing consumer behaviour to align with sustainability and circularity goals is a complex challenge that requires strategic thinking and collaborative efforts. A growing and innovative approach from behavioural economics and psychology is the concept of “green nudges”. Green nudges translate into something like “pushing” towards a certain – in this case environmentally friendly – behaviour yet using subtle influential measures.  

Contrary to traditional behavioural change interventions, which often rely on regulations, information campaigns or economic incentives, green nudges aim to influence people’s choices through gentle and informal strategies, allowing sustainable choices to become more attractive, convenient and habitual. “The intervention must be easy and cheap to avoid.” 

The Power of Choice Architecture

At the core of green nudges is the concept of choice architecture.  

The term was coined by Thaler and Sunstein (2008) and describes the activity of influencing decisions by “organising the context in which people make decisions” (Thaler et al., 2013, p. 428). In other words, choice architecture shapes the way in which choices are presented to individuals. By strategically designing the environment, green nudges can harness cognitive biases and heuristics to steer behaviour towards more sustainable and circular options. Such an approach can subtly but profoundly promote collective environmental responsibility while respecting individual freedom. 

Examples of green nudges: 

• Default options: One of the most effective green nudges is to adapt default settings. A default nudge, which establishes what happens if people do nothing, would be automatic enrolment in green energy. Studies have shown that an opt-out design is associated with less resistance and can result in the default setting simply being adopted. 
• Ease and convenience: Increasing the convenience of sustainable choices may be a powerful green nudge. The placement of recycling bins in easily accessible locations with a description of which items belong in them, or offering bike sharing programmes in urban areas can encourage people to choose environmentally friendly options. 

• Visual cues: Using visual cues or signage can guide behaviour. Showcasing creatively upcycled products in retail environments with clear labelling on their origin and environmental benefits can serve as a powerful visual cue. This not only highlights the potential for reusing materials but also educates consumers on the value of circular economy principles in product design and consumption. 
• Product placement: Products placed at eye level in a grocery store are more visible and easily noticed by shoppers. By strategically placing refurbished products at this level, their visibility increases, making them more noticeable to customers and encouraging the adoption of environmentally friendly purchasing choices. 
• Social proof: As mentioned before, social identity can have a significant impact on an individual’s behaviour. Green messages can be sent by individuals that the target audience is most likely to respect or identify with, or a campaign can be framed in terms of identities that the target audience aspires to be or belongs to. 

Benefits, Challenges and Considerations

Green nudges may offer a number of benefits. By respecting individuals’ autonomy and incentivising a genuine willingness to adopt sustainable circular practices rather than mandating them, voluntary compliance is encouraged (libertarian paternalism). In addition, green nudges are proving to be cost-effective and less burdensome than regulatory measures, which is beneficial for both government agencies and businesses. Their cross-sectoral scalability enables their versatile application in tackling various environmental challenges, from energy conservation to waste reduction. Finally, by addressing the psychological drivers of decision-making, green nudges can facilitate lasting behavioural change, which is essential for achieving sustainable goals in the long term. 

Essentially, green nudges can be an effective tool to steer consumer behaviour towards sustainable choices but are also associated with several challenges.  

These include varying effectiveness due to cultural and individual differences, as well as the ethical implications of influencing people in their choices, which emphasises the importance of transparency and accountability in the development of nudges.  

In summary, a comprehensive approach is needed to tackle the complexity of consumer behaviour. By integrating economic incentives, accessible information, social influences and personal values, it is feasible to improve the effectiveness of green nudges to promote a culture of sustainability within the circular economy.