Impact of Business Practices on Individual Energy Consumption

Stephane Egger, Mario Gstrein, and Stephanie Teufel

1. Introduction

The discussions to obtain energy turnaround are performed widely throughout the world. To achieve it,energy-efficient technologies are essential on the one hand.On the other hand, lower and sustainable energy consumption is desirable to reach this goal. Technology is a very important driver, but man also plays a crucial role.Behavioural changes are necessary in order to influence more sustainable energy consumption.

Regarding the energy consumption issue, a lot of research fields have tackled the matter of changing individual behaviours and attitudes, from psychology and communication sciences to political economics and management. Over the years, governments have implemented restrictive laws and regulations to attend the environmental issues. Consequently, companies, institutions and organisations have made efforts to lower their energy consumption, whether it be of gas, oil, or electricity for instance. However, forcing today’s major economic players into more sustainable entities often proves counterproductive and does not involve actual behavioural change at every level of society. More often than not, laws and regulations work best when they are incentives, suggesting that firms, institutions, and individuals will voluntarily act on their energy consumption because there are enough good reasons to do so.

To find such incentives, this paper focuses on business practices and the positive impact they can have on how individuals consume energy. As highly credible sources of information and examples to follow, firms can counter the three recurrent factors that influence bad consumption behaviour: society’s environmental shortsightedness, a lack of individual responsibility, and individuals clearing themselves from environmental responsibility and putting it upon governments, firms and institutions. The example of the Edge office building in Amsterdam (The Netherlands)was then considered and evaluated. After further investigations, it was noted that by investing in building a more sustainable workplace for their employees and providing them with smart technologies, firms can influence not only their overall energy consumption, but also the individual one. One incentive for firms to do that is showing them that allowing their employees to act themselves on the heating and lighting of their individual workspace would lead to more comfort and consequently to more productivity and performance—often the main objectives of any firm. Thus, this paper offers new perspectives, motivations and incentives for individuals to eventually change their behaviour and act responsibly on their energy consumption.

In today’s world, reaching a more sustainable consumption of energy represents one of society’s major issue. By putting together community-based theories,behavioural studies, and smart technologies, this paper looks to expand the field of research on behavioural changes to encourage sustainable consumption of energy.

First, the factors influencing individuals’ bad energy consumption were identified. Then, the case of the Edge Office Building in Amsterdam was evaluated as a good example to follow. Finally, the framework for sustainable environmental behaviour (FSEB) was conceived, using the most important facets of changing individual behaviour towards a more sustainable consumption of energy.

2. Background

2.1 Social Norms Theories

In “Motivating sustainable consumption”[1], Tim Jackson explains how difficult it is to change behaviours,because they are so “deeply embedded in social … and institutional contexts,” and often flow from “habits,routines, social norms, and dominant cultural values”[1]. In fact, theories of human behaviour like the social norms approach shows that “peer influences … have a greater impact on individual behaviour than biological, personality,familial, religious, cultural, and other influences”[2].Conformity, a change in behaviour or belief as the result of real or imagined group pressure, as well as informational influence, under the acceptance of evidence about reality which has been provided by others[3], can also play a role in energy consumption.

2.2 Factors of Influence

Several factors influence our consumption of energy.First, society’s environmental short-sightedness poses a major challenge to changing behaviours and mentalities.This underlies the need of humans seeing “themselves as being part of nature”, and “nonhuman nature [needing] to be acknowledged to be of prime social and economic interest”[4]in order to achieve sustainable consumption of energy. Secondly, during his research, Hinchliffe[5]faced scepticism from British householders towards the idea of saving energy. This was mainly due to the feeling that individual change of habits, lifestyles, and energy consumption would have very limited effect on the global environment[5]. Instead, people tend to put responsibility of socio-environmental problems over governments,institutions, and private firms. A feeling highlighted in one of Hinchliffe’s interviews, where one householder“suggested that private firms and corporate bodies were by far the largest energy users and therefore the most responsible for the environmental problems”[5]. Here,Hinchliffe puts his finger on an interesting notion: the community plays an important role in the way individuals act, more so than previous environmental campaigners who emphasized “‘individual’ responsibility for the environment” state[5].

2.3 Role of Community

In their article[6]in the Journal of Consumer Behaviour,Albinsson and Perera noticed “an increase in collaborative consumption, which contrasts with the individualisticoriented North American and Western European consumer culture.” Sheth et al.[7]also proposed the idea of mindful consumers. According to the authors, a mindful consumer is“willing to modify repetitive, acquisitive, and aspirational behaviours that are hallmark of overconsumption”[6],[7]. But Jackson[1]further claimed that “changing behaviour cannot be conceived as the processes of encouraging change at the individual level.” Wood and Judikis[8]regarded community“as a group of people who have a sense of common purpose(s) and/or interest(s) for which they assume mutual responsibility.” They also noted that “norms or shared expectations of behaviour, willingly abided by community members, often served as the driving and binding force of community”[6],[8]. A key part of community building is also interaction, which includes both tolerance and trust in others[6],[9]-[11]. In fact in 1994, based on his key mediating variables (KMV) model of relationship marketing[12],Morgan evaluated trust and commitment as the cornerstones for cooperation and long-term success for a company’s alliances. Based on this principle, it is assessed that those two components are equally important to build sustainable energy consumption.

3. Concept

3.1 Basics

Since changing behaviour is such a broad topic, this paper will focus on the impact of the business environment on individual’s attitudes. The assessments made by Jackson in “Motivating Sustainable Consumption”[1]and the case of the Edge Office Building in Amsterdam (the Netherlands)laid the foundations for the introduced concept. Using some of the most important factors of individual behavioural change, this paper looks to use business communities and the implementation of smart technologies to raise individual environmental awareness and lead to more sustainable energy consumption from individuals.

A wide range of information campaigns has been used to achieve public interest goals, but those are “known to be less effective than other forms of learning.” Instead,Jackson claims that “observing how others behave and modelling our behaviour on what we see around us provide more effective and more promising avenues for changing behaviours than information and awareness campaigns[1].”Taking this into account, business environments and community can have a major positive impact on how individuals consume energy. As Jackson writes[1],“consumers are also employees [and] as employees, people are immersed daily in a certain set … of environmentally significant practices.”

The elaboration likelihood model (ELM) of Petty and Cacioppo[1],[13]provides a framework for further development. Based on this model, individuals follow two types of psychological processes involved in attitude change: the central processing, which occurs at a high level of motivation, or the peripheral processing, concerned with a low level of motivation or ability. As illustrated in Fig. 1,attention, comprehension, elaboration and integration will lead to individual attitude and finally behavioural change.The introduced concept will target this particular route,which “is most likely to occur when the issue at hand is personally relevant to the target audience[1].”

Fig. 1. Elaboration likelihood model[13].

Furthermore, recounting Pratkanis and Greenwald[14],Jackson states that “persuasive appeals must employ highly credible sources and be structured around a single,well-placed, very positive message[1].” In today’s message-dense environment, these two conditions prove to be crucial to appeal to individuals. Considering our research, firms are in good position to qualify as “highly credible source” of information. As employees, individuals almost have to consider what is important for the firm as equally important to them. Thus, business environments could have a positive effect on individual’s behaviour by looking to implement the sustainable consumption of energy as a priority in their agenda. And which better“single, well-placed, very positive message” can firms send than a long-term investment for innovation and future generations?

3.2 Edge Office Building

One example of such a clear commitment by a credible source is the Edge office building in Amsterdam. In 2014,the Building Research Establishment (BRE), the global assessor of sustainable buildings, awarded the Edge as the most sustainable office building in the world[15]. Since 2011,already more than $1 billion had been invested in sustainable real estate by OVG (the creator of the Edge building) and the Clinton Global Initiative. A second billion was invested at the end of 2011 to further commit to sustainable development in the built environment, “which[then] account[ed] for 40% of carbon emissions”[15].Linking this to the ELM central route model, the companies involved in such an investment sent a message to their business communities, setting the sustainable consumption of energy as one of their priorities. Now as seen in the literature, trust and commitment are key factors to create cooperation on every level of a community. They also lay the foundations for the long-term success of a strategy. If employees do not trust and share the same commitment as their firm, the investment in sustainable consumption of energy will not be sufficient. As a matter of fact, Morgan et al.[12]identified relationship commitment and trust as the key mediating variables to any business relationship. While others see power as the center because of its ability to“condition others”[16], Morgan et al. positioned trust and commitment as the keys, “because they encourage … to work at preserving relationship investments” and favoured the “expected long-term benefits.” Given their appreciation,when both trust and commitment are present, they produce outcomes that promote efficiency, productivity, and effectiveness”[12].

Fig. 2. Edge office building[15].

In one’s sense, one major element to gain trust and commitment from its employees is providing them the tools necessary to put responsibility on them. That is where the business community plays a major role on individual behaviour. As an entity with enough capital at its disposal, a company should provide each employee with the necessary smart innovative technology to act on their energy consumption, their comfort, and their overall business lives.Today, technology is so embedded in our lives that it needs to be provided adequately to individuals in their business environments to lead them to a change of behaviour in their consumption of energy. As an example, The Edge building employs innovative smart technology such as“Ethernet-powered LED connected lighting, which enables employees to use an application on their smartphones to regulate the climate and light over their individual workspaces”[15]. Currently using solar panels on its rooftops,an aquifer thermal energy storage, and overall smart electricity management, the building has an estimated energy consumption of -0.3 kWhe/m/yr (see Fig. 2). Now,while some of the technology implemented in the Edge building offers the opportunity for individuals to act on their own, others help manage the overall consumption of the building. With the help of power-over-ethernet (PoE)technology[17], comprehensive data are sent daily to the firm analytics department, providing the facility manager with real-time and historical information about the building’s usage. For instance, such technology is able to gather data about carbon dioxide levels, temperature and humidity.“Rooms or floors could be left closed or uncleaned if they are shown to not be used on certain days”[17]. This enables the person in charge to monitor and manage all aspects of energy consumption inside the building.

Fig. 3. Framework for sustainable environmental behavior.

4. Framework for Sustainable Environmental Behaviour

Based on those considerations, a framework is offered implementing some of the most important facets to change individual behaviours with the help of a business environment (see Fig. 3). The source of the incentive should be highly credible, as well as using a single,well-placed, and positive message. As a responsible entity,a firm can take the role of such a source. As economy’s major players, firms qualify as important sources of information. They can create motivation for their employees as well as individuals in general, but also raise awareness regarding societal issues. But firms will only be considered as highly credible once they have built trust and commitment throughout their community. To do so,companies have to establish a clear agenda of their priorities in the long-term. Then, they need to follow those principles so that every employee can truly engage and commit to them. As previously mentioned, trust and commitment represent the cornerstones for cooperation,which is the key to reach behavioural change. Only then should the message sent by the firm (i.e., investing in building a workplace sustainably managed and at the same time offering comfort for its employees) get the attention of its community. In fact, this step proves critical to the success of the framework. As seen in the elaboration likelihood model[1],[13], attention is the first action that needs to be fulfilled towards reaching a change of behaviour.

Once those steps are achieved, the firm should provide individuals with the necessary smart technology. To our understanding, smart technology implies all forms of technology that is easy to use and to understand by any person. For instance, features such as mobile app enabling employees to modify their electricity and heating consumption at their individual work space, or any device providing individuals with easy-to-read feedback on their energy consumption, would eventually lead to more comfort and a better overall business life. In the Edge office building, employees can “control the lighting using their mobile devices.” This mobile app allows office workers to adjust the brightness of their individual workspace according to their preferences, “and different lighting‘profiles’ can be activated to foster, for example, focus or calmness”[17]. In Switzerland, devices such as myStrom[18]provide the individual consumer with an overview of the actual power consumption, the costs, and how much energy has been saved so far, with easy-to-read feedbacks, and pictography[18]. For a firm, providing its employees with such smart technology would certainly need time, financial investments and adaptation. But it would also eventually ease its workforce and make a change towards different habits and routines concerning their energy consumption.

At the time all components are in place, individuals could realize that a more sustainable consumption of energy actually improves their lives at work. Thus, behavioural change could occur.

5. Recommendations

5.1 Result

A general agreement arises in most of literary works and theories on the topic of behavioural change: one cannot easily find the exact components needed to change attitudes and behaviours. Such a broad topic raises problems,because there are many different theories, and each one of them uses a particular set of elements to build a framework that would eventually lead to behavioural change. Some authors based their theory on trust and commitment, but also looked at other factors of influence like shared values,communication and opportunistic behaviours[12]. Others studied the transformation of consumer preferences towards collaborative consumption of goods and linked it to common ideals like “culture, socialization … and political ideology”[6]. In fact, since so many components can be involved in changing behaviours, most of the literary frameworks address specific contexts. However, one critical factor that is rarely taken into account is chance.Individuals may not want to change their behaviour and lower their energy consumption because of random reasons.The framework presented is no different, since it may overlook particular hidden motives. Nevertheless, focusing on the specific context of a business environment, it highlights components that are globally considered as key to change individual behaviour towards more sustainable energy consumption.

Moreover, the concept developed for this research aims at solving three recurrent issues influencing non-sustainable energy consumption behaviour: society’s short-sightedness in regard to environmental issues, a lack of individual responsibility, and the tendency of putting responsibility of bad energy consumption upon firms, governments, and institutions. Those issues are all difficult to tackle, but the framework for sustainable environmental behaviour offers an answer to each of them. First, by involving business practices it directly counters the third issue of individuals trying to avoid any environmental responsibility by putting it upon organisations that seem even greedier regarding energy consumption. Second, the lack of individual responsibility is not directly addressed, but it could still be resolved with the help of the entire business community.Following social norms theories, if every surrounding co-worker changes his habits of energy consumption, one would eventually act on his own consumption as well. Also,by building trust and creating commitment to a long-term goal, business communities can impact the individual energy consumption in a positive way. Finally, shortsightedness toward the environmental issue is a societal problem including all classes, which makes it the most difficult issue to address. But if firms start developing more sustainable practices of energy consumption, they could raise society’s environmental awareness, and eventually lead to the behavioural change of individuals. In fact,individuals usually are not aware of existing possibilities to better monitor and manage their energy consumption such as those presented in the Edge Office Building. The implementation of that kind of technology at an individual’s workplace could raise global environmental awareness.

Still, one major issue could prevent this framework from being effective: the willingness – or unwillingness as a matter of fact – of businesses to make major investments in creating a more environmentally friendly workplace.Here, the significant challenge is to make firms realize that building such an environment for its employees would not only lower the overall energy consumption of the company,but also drastically improve its productivity and performance – often the two main objectives of any firm.For instance, if employees can directly act on the heating and lighting of their individual workspace, it will enhance their personal comfort. Thus, when employees feel at ease,their productivity and overall performance will automatically rise, leading to more profits for the company that made the investment.

5.2 Limitations

For this research, the emphasis was put on the impact of a business environment over individual energy consumption. But since the early 2000s, the line between working from home and working in an actual building’s firm has gotten blurrier. As a matter of fact, the effect of our framework on individuals working from home would most certainly be minimal. Today, the investments needed to acquire the necessary smart technology to quickly and efficiently act on one’s own energy consumption at home are still important. Moreover, such technology requires specific knowledge about energy consumption (about kilowatt/hour for electricity or gas consumption for instance). However, by gradually implementing such devices for their employees in a formal workplace,companies will eventually lead them to acquire such knowledge.

Another important factor that could influence energy consumption is policymaking. Governments and institutions frequently tackle the topic of energy consumption by firms and individuals as well. However,they tend to implement restrictive laws and regulations on the matter. But such measures usually do not solve the problem of individuals’ preconceived ideas and bad habits regarding energy consumption. Laws and regulations need to be subtle incentives for behavioural changes to happen.For that reason, this research has focused on incentives created by firms and institutions only.

6. Conclusions

As economy’s primary drivers, businesses can have a major effect on society’s consumption of energy. By investing in creating a more sustainable workplace and allowing their employees to act themselves on their individual consumption of energy, firms can drastically impact habits and behaviours. Setting themselves as highly credible sources of information and examples to follow,companies have the means to get the attention of every individual composing its workforce. Then, by implementing smart technologies to facilitate the understanding and the use of energy consumption, and enabling employees to act on their individual consumption,companies will influence behavioural changes. As a matter of fact, not only employees will benefit from such an investment. By enhancing the comfort of its workforce, a company could see its productivity and overall performance radically improve. Thus, the incentives for such an investment match the main objectives of any firm.

Acknowledgment

The authors would like to thank the members of the smart living lab research group at the international institute of management in technology (iimt) for fruitful discussions on the topic.

[1] T. Jackson, Motivating Sustainable Consumption. Technical Report, University of Surrey, Guildford, 2005, pp. 1-135.

[2] A. Berkowitz, The Social Norms Approach: Theory,Research, and Annotated Bibliography, Technical Report,alanberkowitz.com, Trumansburg, NY, 2004.

[3] D.G. Myers, Social Psychology. 9th ed. New York, NY:McGraw-Hill Companies, Inc, 2008.

[4] C. Vlek and L. Steg, “Human Behavior and Environmental Sustainability: Problems, Driving Forces, and Research Topics,” Journal of Social Issues, vol. 63, pp. 1-19, 2007.

[5] S. Hinchliffe, “Helping the earth begins at home,” Global Environmental Change, vol. 6, Great Britain: Elsevier Science Ltd, pp. 53-62, 1996.

[6] P. Albinsson, and B. Perera, “Alternative marketplaces in the 21st century: Building community through sharing events,” Journal of Consumer Behaviour, vol. 11 (1), pp.303-315, 2012.

[7] J.N. Sheth, N.K. Sethia and S. Srinivas, “Mindful consumption : A customer-centric approach to sustainability,” Journal of the Academy of Marketing Science, vol. 39, pp.21-39, 2011.

[8] G.S. Wood and J.C. Judikis, Conversations on Community Theory, Purdue University Press, West Lafayette, Indiana,2002.

[9] J.C. Coleman, Foundations of Social Theory, Harvard University Press, Cambridge, Massachussetts, 1990.

[10] R.D. Putnam, Making Democracy Work. Civic traditions in modern Italy. Princeton University Press, Princeton, NJ,1993.

[11] M. Walzer, On Tolerance, Yale University Press, New Haven, 1997.

[12] R. Morgan, S. Hunt, “The Commitment-Trust Theory of Relationship Marketing,” The Journal of Marketing, vol. 58(No. 3), pp. 20-38, 1994.

[13] R. Petty and J. Cacioppo, “The Elaboration Likelihood Model of Persuasion,” Advances in Experimental Social Psychology, vol. 19, pp.124-192, 1986.

[14] A. Pratkanis and A. Greenwald, “Consumer involvement,message attention, and the persistence of persuasive impact in a message-dense environment,” Psychology and Marketing, vol.10, pp.321-332, 1993.

[15] R. De Hoop and A. Turbutt-Day, (2014). OVG real estate and deloitte create the world’s most sustainable office building. Available: http://www.the-edge.nl/en/sustainability.Last accessed 14th May 2015.

[16] H. Thorelli (1986). Networks: Between Markets and Hierarchies. Strategic Management Journal, vol.7, 37-51.

[17] S. Robarts, (2014). Deloitte’s new Amsterdam HQ has connected, sensor-packing LED lighting. Available:http://www.gizmag.com/the-edge-amsterdam-philips-conne cted-lighting/33134/. Last accessed 16th June 2015

[18] MyStrom (2015). Keeping an eye on what matters.Available: https://mystrom.ch/en/. Last accessed 16th June 2015.