What is the impact of business activism on consumer behavior?
Business activism refers to the role of a corporate entity in the advancement of a cause that goes against societal norms. Businesses have been placed under increasing pressure from shareholders to go beyond quarterly profits in order to create positive social change. However, with the pressure placed upon businesses to appease shareholder consciences there has been an increasing amount of “greenwashing”. The term “greenwashing” refers to the dissemination of false information about a company in order to appear more environmentally friendly. Thus, with green advertising came a widespread consumer suspicion regarding companies that advertise as environmentally friendly. Furthermore, suspicion has led to consumer apathy regarding the labeling of products as green, which may in fact deter purchases or investments from stockholders who believe that environmental improvements cut into profits. Studies have found that many consumers relate “green” with ineffective. Ultimately, the main trends arising from business activism center on consumer suspicion which leads to false information and less support for companies that are moving towards social good.
With my research, I explore the ripple of “greenwashing” and the rise of deep seated disinformation that has become so embedded in selling products that some cars are programmed to show false information about their mileage and emissions. Therefore, activism’s role in igniting this coalition of confusing information needs to reorient the focus onto regulating the information provided to consumers and the ethics of business. Research shows that companies are less likely to present false information when they are being observed by an external source. As the line between activism and business blurs, I will outline contrast between cases where a business conflicts with activists (LEGO versus Greenpeace) and an example of successful business activism (Lush). What is key is the fact that there is a lot of area between these examples where consumers can potentially get confused. I will refer to a 2015 study that explored the correlation between a green initiative and the business’s alignment with that idea according to its sector. My research will go on to evaluate the risk involved with misrepresenting information such that some companies actually underrepresent their environmentally friendly nature. Then I will talk about the self-regulatory drives behind consumption that determine whether a person supports “green” products according to a paper from the Journal of Advertising. Finally, I will go into depth about solutions to the mixed information that is presented to consumers. The importance of regulation and transparency will be backed with studies and papers.