Behavioral economics in companies: Nudging green behavior. Evidence of the effectiveness of green nudges in companies

Dominik Enste and Jennifer Potthoff

No 26/2023, IW-Reports from Institut der deutschen Wirtschaft (IW) / German Economic Institute

Abstract: Climate protection is one of the greatest challenges society and economy are currently facing. In addition to policy (Macro level) and individual consumers (Micro level) also companies (Meso level) are confronted with increasing pressure to act more ecologically sustainable. Besides ecological improvement in the production processes and value chains, corporate transformation to more ecological sustainability also demands a development towards the office model of the future, the "Green Office" which is realized by the triade of "green IT", "green building" and "green behavior". This requires employees who are willing to change and structures who enable change. In view of the fact that employees in offices are not yet financially incentivized to act ecologically sustainable in the work context the question arises as to whether behavioral-economic insights can be used to motivate employees towards more ecological choices in their work life. By an intelligent and effective use of green nudges employees can be supported by adopting climate-friendly choices with regard to the following fields of action: energy efficiency, sustainable mobility and resource use. Exemplary nudges are gamification elements such as team bicycle or energy-saving competitions, feedback on electricity or fuel consumption, carpool simplifications and default changes such as double-sided printing. If properly designed, green nudges can combine corporate climate protection, fun, team spirit and freedom of choice and can, for instance, achieve significant savings of 6.5 percent in electricity consumption. If all offices used in the top 7 cities (Cologne, Düsseldorf, Stuttgart, Frankfurt, Hamburg, Munich, Berlin) would save an average of 6.5 percent electricity through green nudges, assuming an annual electricity consumption of 70kWh per m2 office area, 419,676 MWh, more than 176,000 tons of CO2 and 167.87 million euros in electricity costs could be yearly saved in Germany.

Keywords: environmental awareness; sustainability; nudging; company; Germany (search for similar items in EconPapers)
JEL-codes: D22 D91 Q51 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-ene, nep-env and nep-nud
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwkrep:262023

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