When Sustainability is Not a Liability: The Halo Effect of Marketplace Morality

Abstract

Prior research has suggested that consumers believe that products made using sustainable, environmentally friendly technologies are likely to underperform those made using traditional methods. We question the robustness of this assumption and identify scenarios in which sustainability is likely to have the opposite effect, strengthening rather than weakening consumers' product performance beliefs. Specifically, we argue that sustainability is likely to produce a halo effect able to attenuate and even override the negative impact of compensatory inferences underlying consumers' belief that sustainability comes at the expense of performance. We propose that this halo effect stems from consumers' view of the company as a moral agent engaged in a prosocial behavior. In this context, we identify two factors that are likely to influence the strength of the halo effect: the degree to which consumers view the company as a moral agent whose actions aim to benefit society and the degree to which moral concerns are prominent in consumers' minds. Following this line of reasoning, we identify two ways in which managers can increase the perceived performance of sustainable products: by associating sustainable benefits with the company rather than with its products and by emphasizing the societal benefits of sustainability. We test these predictions in a series of four empirical studies that show convergent evidence for our theorizing. Our findings have important public policy implications, documenting actionable strategies that managers can use to mitigate the potential negative impact of sustainability and strengthen the perceived performance of sustainable products.

Communicating Sustainability to Ethnocentric Consumers in China: Focusing on Social Distance from Foreign Corporations

“…Moreover, hypothesis 3 found a significant relationship between campaign evaluations and company evaluations. In line with previous studies [13,[20][21][22][23][24], this study adds to the findings that social distance perception from a company may hinder fair consumer evaluations and that social distance mitigation can help foreign firms overcome negative consumer evaluations and the costs of LOF.…”

“…The association between CSR campaign evaluations and consumer evaluations such as corporate image and purchase intentions has been found in a considerable number of studies [13,[20][21][22][23][24]. Through sustainability activities, foreign firms can persuade local consumers that they are beneficial to society and help align their values and beliefs with local consumers.…”

Perceptions of Green User Entrepreneurs’ Performance—Is Sustainability an Asset or a Liability for Innovators?

“…However, in their recent study, Chernev and Blair [21] found new evidence for limits of the sustainability liability. They documented the effect on perceived product performance for consumers with weak environmental values only, and showed "that for sustainabilityconscious respondents, whose moral beliefs were aligned with preserving the environment, the presence of sustainable benefits bolstered perceived product performance" (p. 9).…”

“…Prior research has studied consumers' perceptions of products that used sustainable vs. traditional technologies (for an overview, see Chernev and Blair [21]). Studies have consistently documented that sustainability does not necessarily raise preferences, even if consumers care about social and environmental issues, but actually decrease preferences.…”

“…With regard to sustainable products, consumers may infer that a company that puts resources into sustainable technologies can invest less in other performance dimensions, such as functional product performance. In sum, research has repeatedly demonstrated that sustainable benefits of a product lower consumers' beliefs about its functional performance [21] (sustainability liability, H1a).…”