Governments, intergovernmental agencies, investors and companies have in recent years promoted various initiatives with the aim of contributing to sustainable development in environmental, social and corporate governance issues (designated dimensions of ESG).
But what can civil society, each of us as citizens, do to contribute to saving our planet? We must all contribute to solving the challenges related to climate change, the eradication of hunger and poverty, access to education and health care, sustainable consumption, or the reduction of social and gender inequalities, among many others.
It is in our hands to solve these problems. Two recent studies show that people are willing to contribute to sustainable development – consumers paying extra to offset CO2 emissions when they buy airline tickets and workers giving up wages to work in more sustainable companies.
A study by the Bundesbank and the University of Chicago assesses how much consumers are willing to pay to offset the greenhouse gas emissions generated by their consumption decisions. In particular, they carried out a survey of consumers in Germany to find out how much they are willing to pay more in airfare (when buying a ticket online) to offset the CO2 emissions of their continental flight to Palma de Mallorca or intercontinental flight to New York.
These CO2 emissions compensation programs are quite common among airlines. For example, TAP uses the money paid by passengers to support reforestation projects in Brazil – the Ecomapuá project, which conserves 86,000 hectares of tropical forest in the Amazon, more specifically on the island of Marajó, located at the mouth of the Amazon River.
Lufthansa supports projects in Kenya and Madagascar that aim to reduce CO2 emissions by distributing efficient stoves to families or those that use solar energy instead of wood fires (which also cause respiratory illnesses), or even renewable energy production projects (solar and biomass) in India, Indonesia and Brazil.
Consumers in Germany are willing to pay €35 per flight to offset emissions (offset costs are €14 for Mallorca and €84 for New York). However, if they receive information about the effects and ways of mitigating CO2 emissions and climate change, their willingness to pay increases by 15 euros, that is, to 50 euros.
An interesting aspect is that this willingness to pay is higher in women, in older people with higher income, and especially in people with leftist political ideology who are willing to pay 32 euros more! These results also illustrate how information campaigns on how to combat climate change can induce action and change.
Other studies show that consumers are willing to pay higher prices for more sustainable goods and services (in times of inflation or crisis like the current ones, this willingness to pay more may disappear as sustainability becomes a luxury good!).
Another study from the Universities of Rotterdam, Geneva and Stockholm looks at whether workers in Sweden are willing to forgo salary to work in companies with more ESG concerns. The results indicate that workers accept 10% lower wages when working in companies in more sustainable sectors such as health, education and recycling (instead of companies in less sustainable sectors such as fossil fuels, chemicals and air transport).
An important aspect is that the salary comparison is made between workers who are similar in terms of demographic, socioeconomic characteristics, cognitive and non-cognitive skills and type of occupation. This wage reduction is even more pronounced in the case of more skilled, younger workers (millennials and generation Z) and has been increasing over time.
The most sustainable companies are still able to attract and retain talent even at a lower salary. These results show that companies’ sustainability policies can have beneficial effects in terms of wage costs and talent attraction.
These studies show that there is hope and that companies and people can, with their actions and consumption and work decisions, contribute to the goals of sustainable development. It is possible to “do well and do better”!