Not Only for the Money : Nudging SMEs to Promote Environmental Sustainability

Small and medium-sized enterprises (SMEs) often lack the knowledge and the resources necessary to implement best practices in environmental management. This makes them a relevant target for public policy measures trying to enhance sustainable decision making in the economy. This paper reports the results of a field experiment in Switzerland investigating behavioral economic interventions for promoting an environmental consulting program to SMEs. The experiment tested the effectiveness of appealing to the environmental vs. financial benefits of environmental consulting to promote the program to SMEs, and of loss vs. gain framed nudges. The results indicate that loss frames are not more effective than gain frames. Unlike suggested by previous approaches, appealing to the environmental benefits of sustainability measures is just as effective as underlining the financial benefits for the SMEs. Evidence from two surveys with SME decision makers corroborates this latter result: SMEs indicate that personal motivations of owners or managers and long-term environmental impact - rather than potential financial benefits - are the most important factors determining whether they are willing to implement additional environmental sustainability measures