Behavioral economics: more sustainability at home and at work

Many New Year's resolutions may include the desire to make daily life more sustainable - both from a personal and professional aspect. What exactly does this mean? And what steps can be helpful in changing your own behavior? In this interview with Prof. Dr. Goerg, you will gain insights into research from the field of behavioral economics and the key topic of sustainability.

Prof. Dr. Sebastian Goerg, Technical University of Munich

Prof. Dr. Goerg conducts research in the fields of behavioral and experimental economics and investigates the effects of incentives, information and (legal) institutions on human behavior. He pursues an interdisciplinary research agenda and connects social and natural sciences with co-authors. At the same time, he teaches on the topic of “Sustainable Behavior Change” in the “Sustainable Management and Technology” certificate program.

The topic of sustainability has become increasingly important. Many people want to make their daily lives more sustainable, whether at home or at work. There are different ways of putting sustainability into practice. The various definitions of sustainability likely play a role. How do you define sustainability in behavioral economics? Is there an additional definition for “sustainable behavior”?

Prof. Goerg: Of course, we are interested in facilitating people to behave more sustainably – in the sense of ecological sustainability. This often pertains to our ability to communicate information on the sustainability of products or decisions in a more transparent as well as understandable way. Or how to adapt the decision-making situation so that a conscious decision is made for or against a sustainable option and not simply a reflexive decision because this is how it has always been done in the past.

But we also understand sustainability in the sense of behavioral changes that are permanent. A very simple example related to saving energy: If I only turn down the heat in my office over the weekend when I am reminded to do so and do not think about it myself, then there is no lasting change in behavior. My behavior has not changed in the long term but needs constant external stimuli. Therefore, we are also interested in approaches that turn sustainable behavior into a habit.

At the beginning of the year, many people are motivated to make new resolutions and incorporate specific changes to their behavior. What concepts from behavioral economics do you recommend in order to be successful in the long term?

Prof. Goerg: Many people set goals for the New Year, such as being more active, losing weight, or getting better grades. There is a lot of research in the field of psychology and behavioral economics that looks at how goals can increase motivation for such initiatives. Whether setting professional goals related to employee management, for example or setting individual, personal goals, it has been shown that SMART goals are more successful. SMART stands for specific, not vague, measurable, achievable, reasonable, and time-bound. So, if I want to lose weight in the new year, for example, I shouldn’t set an unspecific goal like losing a few kilos in the new year or an unrealistic goal like losing 20 kilos by the end of the year. Depending on my weight, a goal of 5 kilos by Easter, for example, would be a smart goal. I can measure my progress until Easter and if I have reached my goal by Easter, I can set myself a new goal for a specific period.

Back to the topic of sustainability. What would you recommend to promote more sustainability in everyday life? Are there any special aspects of sustainability that you have encountered in your research?

Prof. Goerg: On a small scale, the first step is certainly to place more emphasis on conscious decisions. We often want to live more sustainably, but due to stress, time pressure, or other priorities, we often make decisions in which we ignore sustainability aspects. If I can, I should consciously take time to decide what is important to me for the products I buy, the food I eat, but also the form of transportation I use for traveling to an appointment.

The second is that we regularly underestimate what our social environment thinks about certain topics. We do not always have an accurate picture of the norms that apply in society, for example, because we pay particular attention to vocal and conspicuous expressions of opinion. Our research showsthat the average German thinks  they are individually more in favor of climate protection measures compared to the rest of society as a whole. Individuals, therefore, underestimate the support in society for climate policy measures and, therefore have lower expectations.

The third follows from the previous point: the change in organizations towards more sustainable business practices requires role models. It is usually about replacing a norm, an accepted behavior, with another norm. However, if I underestimate the support for the new behavioral norm, I am less willing to change my behavior. However, if I observe prominent group members who successfully act according to the new norm, this changes my perception and increases my acceptance of the new norm.

You have also talked about the topic of “Sustainability at home and at work” in the past masterclass for the “Sustainable Management & Technology” certificate program on February 21, 2024. What can sustainability managers learn in your module for their day-to-day work?

Prof. Goerg: In my presentation, we will look at some of the topics we have just discussed. How can I use targeted information to encourage my customers and employees to adopt more sustainable behavior? What role do financial incentives and intrinsic motivation play? This is a brief preview of my module in the certificate program, in which we will go into more detail. We will also explore measures that have a short-term or long-term impact. Of course, we will look at the overall picture for organizations in the context of social interactions and take group dynamics and behavioral norms into account. Finally, we will consider what all of this means for the desired organizational change in the context of sustainability.

Your research is interdisciplinary, and you work in close collaboration with various experts from the social and natural sciences. How do you view the research environment at the TUM Campus Straubing, where the certificate program takes place? What kind of learning environment does the campus offer for participants in the program?

Prof. Goerg: Our campus in Straubing is a so-called Integrative Research Institute at TUM and we conduct research in biotechnology and sustainability. Sustainability is such a large, complex topic that no single discipline can fully address it. By working together with various disciplines, we can collectively consider the technological, economic, and social challenges. In addition, we have genuine interdisciplinary degree courses in Straubing. This gives us the advantage of training managers, for example, who are able to communicate with natural scientists and engineers who understand the language of economists. This makes us unique in Germany, and it is wonderful and incredibly enriching to be able to work in such an environment.

We would like to thank Prof. Goerg for the inspiring interview. If you would like to learn more about this topic, you can meet Prof. Goerg as a lecturer in our certificate program “Sustainable Management & Technology”, which starts in April 2024.