Investcorp and Saïd Business School announce new research partnership on consumers and climate

At approximately 60%, household consumption is the largest component of global GDP, followed by corporate investment, government spending, and net exports. Consumers in industrialised countries are responsible for 70% of the environmental impacts of housing, transport and food. A small change in consumer choice could therefore make a significant and immediate impact in mitigating emissions and moving economies toward the decarbonisation targets laid out in the 2015 Paris Agreement on climate change.

'As the impacts of climate change hit closer to home, consumer attitudes are also changing with greater recognition of climate risk and greater understanding of sustainability and climate topics', said Amir Amel-Zadeh, Associate Professor of Accounting at Saïd Business School. 'However, despite growing consumer awareness, this has not yet translated into widespread changes in consumer behaviour. Understanding the contributing factors of this attitude-behaviour gap is critically important to addressing climate change.'

The new white paper outlines a number of key findings:

• On average, the link between environmental awareness and pro-environmental behaviour appears to be relatively weak. This finding suggests that while awareness is an important factor, it may not be the sole driver of eco-friendly actions.
• Financial constraints are often seen as the main hurdle to bridging the say-do gap, with the price of climate-friendly products being the biggest factor in consumer purchasing decisions.
• Beyond the financial cost, it is often considered 'too hard to be green'. There is a perception that it requires significant effort to identify climate-friendly options in the first place, which suggests greater efforts may be needed to make 'going green' appear easy and attainable.
• Consumers have growing reservations towards green products, aggravated by a rise in greenwashing, indicating that consumer trust in companies' environmental claims significantly influences consumer decisions and can be undermined by greenwashing, making it imperative for companies to be transparent and authentic in their sustainability efforts.

Investcorp is supporting research at Oxford Saïd in collaboration with researchers at the Digital Data Design Institute at Harvard to run a large-scale international consumer survey, with the aim of conducting further research to enhance global understanding of consumer attitudes and behaviours towards climate-friendly products and services.

The white paper is authored by Amir who is also the Director of the Oxford Initiative on Rethinking Performance. Amir’s research broadly investigates the role of financial and non-financial reporting in capital markets and how companies’ sustainability characteristics affect investors’ asset allocation decisions. Co-author, Qiaoye Yu, is the Oxford-HEC Montréal Research Fellow in Sustainability at Oxford Saïd. Qiaoye’s research can be broadly summarised as understanding how climate change affects the decision-making of stakeholders.