Social Visibility and Carbon Budget Compliance: A Quasi-Experimental Study of Internal Surcharges on Business Travel

Abstract

This paper analyzes the role of social visibility of carbon surcharges in business travel decisions in terms of how this can affect employee adherence to in-house carbon budgets. With the shift in how limits are defined in organizations by moving away towards hard limits, behavioral nudges are becoming more apparent to achieve sustainability objectives. This study will examine how the exhibit of carbon surcharge to colleagues can lead to an improvement in the adherence to organizational carbon allocations. The crude longitudinal data (a quasi-experiment founded on difference-in-differences [DiD] analysis) of a multinational professional services company is used. This implies that the researchers will be using 6,800 employees in a period of 24 months by examining the impacts of an internal carbon surcharge policy on the behavior of travelling. The policy introduced was done in two phases where in the treatment group, surcharge costs were made visible to the team leaders and peers during booking whereas in the control group, surcharges remained invisible. DiDs were modified on the basis of job roles, business units and destinations. Findings demonstrate that the visible carbon surcharges produced a 22.6% decrease in high-carbon trip reservations ( p < 0.01 ) and 15.3 percent decrease in average carbon emissions per trip. Peer supervision of managers incurred a more positive compliance. However, the change in the control units, was not significant. The findings show that the social visibility is the most impactful element in the compliance behavior besides the financial implication. The society enforces social transparency as a social checking mechanism. Socially visible internal carbon surcharge is better than mere imposition of them.