UNC Kenan-Flagler Sustainability Blog

Nudging Toward Sustainability

August 2, 2010 By Michael Chasnow

When talking about sustainability, the initial structure of company and government policies/programs matter.  Nudge, a book by two economists at U. Chicago (Richard Thaler and Cass Sunstein), has helped put this truth into view for me.  When it comes to making decisions, people do what’s easy for them – the path of least resistance.  For example, for retirement 401K programs, when people are opted-in automatically, the likelihood of participation in this beneficial retirement savings program increases 3-5 times.

Which gets me thinking: what simple changes could we make structurally to nudge people towards important sustainability actions, such as socially responsible investing (SRI) or reduced energy use?  With SRI, what if progressive organizations, such as B Corporations, made their default 401K retirement programs invest in socially responsible mutual funds?  And with energy use, why not automatically adjust people’s thermostats up a couple degrees during the middle of summer days in residential properties, when most people are either at work or school?  Such a move would save energy when energy usage is highest in the U.S. (10am – 6pm), and reduce the need for peak plants, such as natural gas, from needed to be turned on (or in the long-term, built).

People could override these default programs, so they still have the independence to make their own decisions – with the thermostat example, I could move the temperature back down a couple degrees if I am home.  But, 90% of would let these default options stick – which will have a positive affect on society.  Should companies/policymakers be able to make these type of “nudges” toward sustainability?  If so (and my vote would be yes please!), what other ways could companies and governments nudge citizens toward more responsible decisions?

Hat tip to fellow UNC Kenan-Flagler student Adam Hart for nudging me towards reading this book.

One Comment

  1. So now read the book “Drive” by Daniel Pink. Audibel has it for down load into your I-phone.