How Managers Can Cut Energy Use, Divert Waste, and Improve Company Decision-Making

Sustainability decisions range from routine (switching off lights, recycling) to highly complex (reclaiming land, making large procurement decisions).

Companies have good reasons to make decisions benefitting the environment or society. For one, the majority of the research says such initiatives pay off. But implementation — that is, getting employees, execs and even ourselves to land on sustainable choices — can be hard. Why? In part, it’s because of how our brains work. Built-in biases can divert us from the most sustainable outcomes.

Biases can affect all of our decisions, not just with sustainability implications. A well-known example is the bandwagon effect, which makes us more likely to do or think things because of the behaviour or thoughts of others. A range of popular books from leading economists (e.g. Dan Arielly, Richard Thaler) and psychologists (e.g. Daniel Kahneman) provide evidence of these biases through experiments. So which biases affect sustainability decisions and how can they be overcome?

Sustainability decisions managers face range from the very routine (turning off a light, recycling a coffee cup) to the highly complex (reclaiming land, making large procurement decisions). Arriving at sustainable outcomes in both cases poses certain challenges.

For instance, individuals making decisions typically:

1. prefer sticking with the status quo

2. rely on intuition, rather than attempting to process all relevant factors

3. dislike making trade-offs or giving things up

4. let immediate wants trump long-term pay-offs

These may help explain why an employee with a short commute might choose to drive to work rather than walk, even though they could save on parking, reap health benefits and reduce their environmental impact.

To better understand how sustainability decisions are unique, and how to get to more sustainable decisions, NBS commissioned a systematic review. Joseph Arvai, Victoria Campbell-Arvai and Piers Steel of the University of Calgary conducted the review of 207 studies from 60 years of research.

The good news: there’s a prescription. Some simple tools can help move us – or our employees, execs and other stakeholders – to more sustainable decisions. These interventions allow us to construct decisions to help leverage or overcome the decider’s inherent biases.

Consider a routine decision such as getting employees to recycle at work. Three possible interventions include:

1. Commitment: Publicly commit to making a sustainable choice in the future. Why does it work? It enhances positive feedback for sustainable behaviour and provides negative feedback if you don’t deliver. E.g. Get employees to write their pledge to recycle on a shared bulletin board.

2. Goal-setting: Set an expected level of performance. E.g. Have your unit decide individual or shared targets for waste diversion.

3. Feedback: Give verbal, digital or written account of outcomes to make longer-term outcomes tangible now and enhance the good feelings associated with meeting sustainability goals. E.g. Provide daily, weekly or monthly updates on progress towards waste diversion goals.

Tactics like these are being used effectively in many organizations. (For additional ideas on addressing implementation challenges, visit NBS’s workshop report on embedding sustainability in organizational culture.

Read about how, for instance, SC Johnson removed waste baskets from offices and placed them further away in public spaces. Or, how Industry Canada has used positive framing to create greater traction for sustainability.)

This project not only synthesizes the research on this issue from the past half-decade, but gives sustainability managers tools to get to more sustainable outcomes.