Out of sight, out of mind: How businesses can tackle future discounting to enable sustainable consumer behaviour

The Greendex Survey, the result of a partnership between National Geographic and GlobeScan, is a global tracking study developed to quantify and monitor consumer attitudes toward environmentally sustainable consumption. In addition to providing a global perspective on behavioural trends across 17,000 consumers in 17 countries, the survey provides each respondent with their own “Greendex Score”, a calculation of their environmental footprint. As we gear up for the Greendex 2014, we decided to revisit some of our 2012 data to provide some practical, evidence-based advice for businesses trying to penetrate the sustainable goods market, and provide insight on the cognitive mechanisms that underlie sustainable choices.
Shown in the two graphs below, the 2012 data indicate that countries that experience negative health effects due to environment change are also more likely to engage in sustainable consumer behaviour (as indicated by a high Greendex Score) and feel guilty for their impact on the environment. Those countries that are less likely to experience the health effects however, are also less likely to engage in sustainable behaviour or entertain feelings of guilt. This dichotomy seems to align with the developmental status of the country.

Behavioural economists refer to this “out of sight, out of mind” cognitive bias as future discounting, or the tendency for people to inappropriately discount the effect of their current behaviour on future outcomes. This bias is reinforced when the outcome, in this case environmental deterioration and climate change due to unsustainable consumption, is both distant in the future and void of salient cues of change at the present time. When faced with purchasing decisions, future discounting can therefore bias the decision making process of consumers between sustainable and non-sustainable goods. This short-sighted mindset creates a barrier for companies transitioning towards sustainable production. A study conducted by UNEP, GlobeScan and SustainAbility confirms future discounting as a barrier, with 88% of respondents reporting “financial short-termism” as the primary obstacle for developing sustainability-focused business models.
How can businesses create messages that diminish consumers’ tendency to discount the future when making the choice between sustainable and non-sustainable products, and enable the shift toward sustainable consumption? Here are four solutions:

1. Highlight thoughts of the future by bringing up the past

Brain regions that are associated with consideration and valuation of future events overlap with regions responsible for memory or valuation of past events. Messages that conjure memories of past experiences are therefore likely to sharpen consumers’ ability to think about similar experiences that will happen in the future. To promote sustainable choices, messages should emphasize how non-sustainable consumption will modify these experiences in the future relative to sustainable choices.

2. Frame the discount as a cost

The hidden-zero effect, which emerges when presenting options of whether to have a smaller amount of something good now versus a larger amount later on, suggests that people are more likely to forgo immediate rewards for future rewards if the favourable option is framed as “making zero impact now to receive benefits in the future”. This framing, which explicitly includes the mention of “zero” impact in the present for benefits in the future, bolsters thoughts of an optimistic future and mitigates future discounting. To promote sustainable choices, messages should emphasise how sustainable consumption can lead to a “zero” impact on the environment in the present, resulting in a certain benefit in the future (for example, a decline in the rise of sea water levels by x amount).

3. Promote Certainty

Perceived uncertainty about the impact of consumption promotes future discounting. When developing messages of the environmental impact of choosing sustainable over non-sustainable products, it is imperative to indicate not only the degree of relative impact for the purchase options, but also include information about the consensus among relevant parties (climate scientists, or researchers) of the impact measurement.

4. Don’t discount future discounting

Future discounting of consumption behaviour on climate change differs between consumers in developed and developing economies. When developing messages of sustainable consumption, modifying the messages to appease the different audiences is imperative.

This post was written by former GlobeScan Senior Research Analyst, Dr. Melaina Vinski.