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Brands the world over have started offering consumers incentives to pick green.
In these tight times, consumers are reluctant to pay premiums to be green. But a new trend shows they won’t have to: quite the opposite. Brands are teasing green behaviour from consumers with the offer of rewards. At the 2011 V Festival, Coca-Cola got happy campers to bring 66,000 PET bottles to recycle bins by offering T-shirts and waterproofs at ‘Swap for Swag’ stalls.
The same concept is the business model for RecycleBank, which recently topped The Wall Street Journal’s ranking for cleantech companies with the capital, executive experience and investor knowhow to succeed. RecycleBank awards households who recycle by giving them reward points, which can be redeemed with a range of retailers and brands, including Dunkin' Donuts, Footlocker, Macy’s and Unilever. The more waste that is diverted from landfill, the greater the rewards. The company works in partnership with municipalities and waste hauliers to calculate how much waste each participating household has recycled (usually by recording the weight of recyclables in a specially supplied container). The city of Hollywood signed up in 2010 to encourage residents to recycle. During its first year, it saved nearly $500,000 in waste disposal fees while generating more than $250,000 in recycling revenue. Such gains more than offset the participation fees municipalities pay to Recyclebank.
A similar model is driving domestic water conservation in Brazil. Ambev, South America’s biggest brewery has teamed up with São Paulo water utility Sabesp to create Banco Cyan, which they are advertising as a new currency based on water. Over 26 million people have signed up for their household water use to be measured and targets to be set for cuts. As they meet their targets, they are rewarded with credit that can be spent at high street stores such as Blockbuster.
It’s a new application of an old idea, comments Frances Buckingham at consultants SustainAbility: “Companies have long embraced ‘choice architectures’ to optimise profits, [but] it’s a new idea to aim these techniques at sustainability”. The benefits for brands are better conversations with consumers about values – a great foundation for a long-term relationship.
Other brand nudges are aimed towards healthier lifestyles and stronger communities. Amazon Kindle allows purchasers to ‘loan’ books to friends to nudge them towards collaborative consumption, and US insurance giant Humana rewards customers who exercise.
Some companies are also finding ways to bribe employees to make greener lifestyle choices. The Greek brand Coco-mat – which sells bedding from natural materials such as goose down, sea grass and coco fibre – is offering employees the opportunity to earn 5% more if they cycle to work.
Whether these nudges can drive any long-term shifts in behaviour is another question. When the reward is taken away, will people spring back to their former ways, spoiled and disillusioned?
It’s possible that – if incentives are kept up for long enough – habits will also shift. “We are influenced by what is considered ‘normal’ or what is expected of us by others”, says Lorraine Whitmarsh, Lecturer in Environmental Psychology at Cardiff University. But she is concerned that policymakers should not rely on the nudge alone. “Nudge is great for small-scale, short-term behaviour changes, [but] we also need to change infrastructures and institutions. You can’t nudge someone onto a bus service that doesn’t exist." – Christina Madden