Bachelor Thesis

Influencing Factors on the Adoption of a Climate

Neutral Checkout

Chair of Entrepreneurship, Innovation and Technological

Transformation
Prof. Dr. Dries Faems
Maxim L. Mommerency

Submission date (Vallendar, May 12th, 2021)

Katharina Liersch Lars Gründer

20002627 20002696
07.06.1999, Halle (Saale) 22.02.2000, Landstuhl
Auf dem Forst 1 Im Gessel 11
56077 Koblenz 56179 Vallendar
Abstract
Rising emissions and the subsequent climate change pose a fundamental threat to humanity.

Climate Neutral Checkouts enable customers to offset their emissions and thus combat climate

change without requiring a shift in their behavior. This study aims to determine which factors

influence the customer's willingness to pay a price premium for carbon offsetting in online

shops and the amount of the price premium. Hence, we introduced two different research

methods to collect information: a survey to examine which customer characteristics support

CO2 compensation and qualitative interviews to understand the company's motivation to

introduce a Climate Neutral Checkout. We concluded that the willingness to pay a premium

depends primarily on (I) the product category, (II) the price, and (III) whether the customer

considers a Climate Neutral Checkout to be effective for mitigating climate change. While

introducing a Climate Neutral Checkout helps the environment, it can also indirectly benefit

the company through an improved reputation and a higher customer lifetime value. Although

one can perceive such an introduction as greenwashing, this risk can be mitigated through

strategic integration of sustainability and quantifying its environmental impact.

Key words: Climate Neutral Checkout, Carbon Compensation, Carbon Offsetting, Corporate

Sustainability, Willingness to Pay, Greenwashing

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Table of Contents
Abstract .................................................................................................................................................... I
Table of Contents .................................................................................................................................... II
Table of Figures..................................................................................................................................... III
Table of Tables ...................................................................................................................................... III
Table of Abbreviations .......................................................................................................................... IV
Table of Definitions............................................................................................................................... IV
1 Introduction .......................................................................................................................................... 1
2 Literature Review ................................................................................................................................. 3
2.1 Willingness to Pay for Eco-friendly Products ............................................................................... 3
2.1.1 Historic Development ............................................................................................................. 3
2.1.2 Willingness to Pay Price Premiums Across Different Eco-friendly Products ........................ 4
2.1.3 Influence of Customers' Demographics on the Willingness to Pay........................................ 5
2.1.4 Influence of Customers' Attitude and Behavior on the Willingness to Pay ........................... 8
2.1.5 Impact of Product Characteristics on the Willingness to Pay................................................. 9
2.1.6 Influence of the Checkout and Buying Process on the Willingness to Pay .......................... 11
2.2 Moral Licensing and Warm-glow ............................................................................................... 12
2.2.1 Introducing the Concept of Warm-glow Giving................................................................... 12
2.2.2 Introducing the Concept of Moral Licensing ....................................................................... 13
2.2.3 Implications for our Thesis ................................................................................................... 14
2.2.4 Ethical Problems................................................................................................................... 15
2.3 Adoption of Corporate Sustainability Initiatives ......................................................................... 17
2.3.1 Corporate Sustainability Drivers .......................................................................................... 17
2.3.2 Corporate Sustainability Initiatives' Trade-offs.................................................................... 18
3 Methodology ...................................................................................................................................... 20
3.1 Purpose ........................................................................................................................................ 20
3.2 Quantitative Research: Online Survey ........................................................................................ 21
3.2.1 Participants ........................................................................................................................... 21
3.2.2 Experimental Design ............................................................................................................ 21
3.2.3 Analysis ................................................................................................................................ 25
3.3 Qualitative Research: Interviews ................................................................................................. 28
3.3.1 Description of Data Collection ............................................................................................. 28
3.3.2 Analysis ................................................................................................................................ 28
3.3.3 Objectives ............................................................................................................................. 28
3.3.4 Scope .................................................................................................................................... 29
4 Findings .............................................................................................................................................. 31
4.1 Quantitative Findings .................................................................................................................. 31
4.1.1 Data Cleansing ..................................................................................................................... 31
4.1.2 Relevance of the Newly Introduced Variables ..................................................................... 32
4.1.3 Comparing Different Regression Methods ........................................................................... 37
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4.1.4 Analysis of Different Subgroups .......................................................................................... 39

4.1.5 Analysis of Non-linear Relations ......................................................................................... 44
4.1.6 Potential Consolidation of Variables .................................................................................... 44
4.1.7 Evaluation of Respondents' Demographics and Attitude ..................................................... 45
4.1.8 Analysis of Relative Willingness to Pay Distribution .......................................................... 49
4.2 Qualitative Findings .................................................................................................................... 50
4.2.1 Origin of the Motivation for the Climate Neutral Checkout ................................................ 51
4.2.2 Product Characteristics Beneficial to Adopting the Climate Neutral Checkout ................... 52
4.2.3 Limiting factors of the Climate Neutral Checkout Adoption ............................................... 52
4.2.4 Effects of Introducing a Climate Neutral Checkout ............................................................. 54
5 Discussion .......................................................................................................................................... 55
5.1 Implications for the Customer ..................................................................................................... 55
5.2 Implications for the Company ..................................................................................................... 60
5.3 Implementation of the Climate Neutral Checkout ....................................................................... 64
5.4 Ethical Considerations ................................................................................................................. 66
6 Conclusion .......................................................................................................................................... 72
6.1 Limitations of our Research Approach........................................................................................ 72
6.2 Future Research ........................................................................................................................... 73
7 Final Remarks..................................................................................................................................... 76
References ............................................................................................................................................. 78
Annex .................................................................................................................................................... 84
Delineation of Contributions ................................................................................................................. 88
Declaration of Authorship ..................................................................................................................... 89

Table of Figures
Figure 1: Frequency Distribution ............................................................................................. 31
Figure 2: Relative Willingness to Pay Distribution According to the NEP ............................. 34
Figure 3: Average RWTP per Perceived Likelihood of Greenwashing ................................... 36
Figure 4: Average RWTP per NEP .......................................................................................... 44
Figure 5: Distribution of Respondents' RWTP ........................................................................ 49
Figure 6: Model portraying consumer behavior towards carbon compensation (adopted from
Aryal et al. (2009) and Laroche et al. (2001)) ................................................................................ 56

Table of Tables

Table 1: Distribution Age Groups ............................................................................................ 32

Table 2: Responses & Average RWTP per Product Category ................................................. 32
Table 3: Responses & Average RWTP per Price ..................................................................... 33
Table 4: Correlation NEP & Greenwashing ............................................................................. 36
Table 5: Effectiveness .............................................................................................................. 36
Table 6: Logistic Regression .................................................................................................... 37
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Table 7: Tobit Regression ........................................................................................................ 38

Table 8: Proof Independent & Identical Distribution ............................................................... 40
Table 9: Division into Product Categories ............................................................................... 41
Table 10: Division into Price Categories ................................................................................. 42
Table 11 Final OLS Model....................................................................................................... 46

Table of Abbreviations
GHG Greenhouse Gases

WTP Willingness to pay

RWTP Relative willingness to pay (as a percentage of the product price)

NEP New Environmental Paradigm

ABG Attitude behavior gap

TBL Triple Bottom Line

tCO2e Tons of carbon dioxide equivalent

Table of Definitions
Triple Bottom Line The Triple Bottom Line, as compared to traditional economic

theory, states that the company should focus on profits but also on

environmental and social concerns.

Priming Priming explains that a customer reacted differently to a certain

stimulus when exposed to a different stimulus.

Greenwashing The Oxford Dictionary defines greenwashing as "activities by a

company or an organization that is intended to make people think

that it is concerned about the environment, even if its real business

harms the environment."

Tobit regression The Tobit regression model is created to estimate linear

relationships among variables that are censored, i.e., that are

restricted in the values they can take.

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(Adjusted) R-squared The R-squared and adjusted R-squared describe how much of the

variance that is observed in the sample can be explained by the

regression model. The higher the value, the more of the variance in

the observations can be explained by the model. The adjusted R-

squared takes into account how many variables the regression has

in order to avoid overfitting.

Herzberg Hygiene Herzberg distinguishes two factors that influence workplace

factors & motivators motivation. The presence of "motivators" creates job satisfaction

and increases motivation, while the absence of "hygiene factors"

fosters job dissatisfaction and decreases motivation. We refer to

them outside this context but use their definitions similarly.

tCO2e The "tons of carbon dioxide equivalent" (tCO2e) describes the

impact certain emissions have on the environment. To ensure

comparability of different pollutants, this impact is standardized to

carbon dioxide emissions.

Luxury products These are products that people most enjoy buying and are rarely in

real need of.

Necessity products These products present purchases the customer does not necessarily

enjoy and does not want to spend their time on. Nevertheless, the

customer is in need of these products, so she buys them.

Sustainability labels Sustainability labels, similar to fair-trade labels, state whether a

product confirms to a specific set of sustainability criteria.

1 Introduction

"Carbon emissions already have a price attached—it's just not the

emitters who pay."
World Wildlife Fund, December 2019

To comply with the agreed-upon targets entailed in the Paris Climate Treaty, the world's nations

need to continuously reduce the global CO2 emissions at a rate of 7.6% p.a. (United Nations

Environment Programme, 2019). Before 2020, greenhouse gas (GHG) emissions rose every

year, and even though the Covid-19 pandemic halted the global economy, emissions only

decreased by 6.2% (Friedlingstein et al., 2020). These numbers reveal that to comply with these

goals to forego disastrous, hostile climate effects, the business and government sectors need to

undertake efforts. As outlined in a survey conducted across 37 countries by the University of

Oxford (United Nations Development Programme, University of Oxford, 2021), on average,

66% of respondents state they consider climate change a global emergency. Beyond that, for

two out of three consumers, sustainability has become a higher priority since the spread of the

Coronavirus (GFA, 2020). Policymakers across the globe are equally aware of the scope of the

problem, which fostered an accelerating adoption of carbon tax implementations among 30

countries in 2019 and is expected to grow (Worldbank, 2019). A carbon tax is a financial

instrument that levies a tariff on emitting CO2 and thus aims to internalize the societal costs,

present and future, that these emissions incur. By doing so, the efficient market hypothesis

proclaims that incorporating the mentioned costs will lead to a new market equilibrium, that is

profit-maximizing for the companies involved while putting a halt to the myopic environmental

exploitation. Therefore, the demand is expected to shift towards more environmentally friendly

products as they, in comparison, will be taxed less than products with a higher carbon intensity.
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Further, product and process innovation concerning the environment will be financially

attractive.

Nevertheless, carbon taxes face severe problems. Given its political origin, a carbon tax needs

to find a majority upon its introduction, which results in prices per ton of carbon as low as $1

and the global average being $10 per ton of carbon dioxide equivalent (tCO2e) (Worldbank,

2019). These price levels are insufficient to offset the damage done by the emitted carbon,

which is estimated to cost society around €180/tCO2e (Umweltbundesamt, 2019). Furthermore,

an insufficiently low carbon price might even be a burden, as its introduction gives the citizens

a feeling of accomplishment, reducing the sense of urgency towards the climate crisis.

Since the national implementation of a carbon tax is subject to the regime's political agenda,

consensus about the value of the price, and implementation lead times, some companies like

BASF and Danone have taken the initiative to apply an internal carbon tax themselves. A

different approach has been pursued by eBay Germany, Zalando, or Digitec Galaxus in their

online shops, by calculating their product-related emissions and providing the consumer with

the opportunity to offset those. This model is being referred to as Climate Neutral Checkout

(CNC) and presents the customer with the opportunity to voluntarily pay a premium that

companies subsequently use to fund environmental projects that are certified to reduce GHG

emissions.

Given its novelty, there is little research about CNCs, which suggests a need for additional

research about the customer's willingness to pay (WTP) for carbon-neutral products and this

customer's characteristics, how this WTP differs across product categories, and what determines

the adoption from a company perspective.

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2 Literature Review
2.1 Willingness to Pay for Eco-friendly Products

The fundamental research for this thesis covers, on the one hand, different factors that motivate

the customer's willingness to pay a surcharge for eco-friendly products. Additionally, paying a

premium for carbon compensation might result in psychological effects, which lead to possible

benefits for the firm. On the other hand, we review the organizational perspective in terms of

the environments that benefit the introduction of a CNC.

2.1.1 Historic Development

Various factors influence the willingness to pay a price premium for eco-friendly products.

Therefore, this willingness to pay (WTP) has continuously changed over the past years.

According to Laroche et al. (2001) and Williams & Tranter (2004), the willingness to pay for a

price premium for ecologically compatible products increased until 1993 but then decreased

until 2000 (Laroche et al., 2001; Williams, Galina & Tranter, Bruce, 2004). There are two

different measures to be considered for the willingness to pay: the share of people willing to

pay a price premium and the amount the people are willing to pay. While in 1989, 67 percent

of Americans were willing to pay a premium of five to ten percent, this premium rose to 15 to

20 percent in 1991 (Suchard, H.T. and Polonski, M.J, 1991). Finally, in 1993, 79 percent of the

used sample of U.S. citizens granted a 40 percent price premium (Laroche et al., 2001).

Nevertheless, evaluating these numbers requires considering potential biases in the model as

they probably valued environmental concerns more due to their participation in the study.

Williams and Tranter (2004) stated that 57.6% of the U.S. customers in 1993 agreed to the price

premium, which decreased over the remaining decade to 54.5% (Williams, Galina & Tranter,

Bruce, 2004).

Looking at Germany and other countries, one can observe a similar pattern: From 1993 to 2000,

roughly 5% fewer people were willing to pay the price premium. Only in Ireland, this was not
4

the case. (Williams, Galina & Tranter, Bruce, 2004) More recent data from Germany indicates

an incline in the WTP for environmentally friendly products from 2016 to 2020. In 2016, 8.80%

of the surveyed persons fully agreed, and 33.80% agreed or mostly agreed to the statement "I

am willing to spend more on a product if it is environmentally friendly." These numbers

increased to 11.55% who fully agreed, and 35.10% agreed or mostly agreed to the statement in

2020 (Arbeitsgemeinschaft Verbrauchs- und Medienanalyse, 2020). Pakulski et al. (1998)

explain the reason behind the underlying phenomenon of the switching trend in the WTP by the

fact that "environment as an issue in the public arena has become increasingly routinized"

(Pakulski et al., 1998; Williams, Galina & Tranter, Bruce, 2004). Hence, people probably

believed it to be handled well by the government and recognized it more as a public concern

than an individual issue. With the rise of Social Media and the Internet in the 2000s and 2010s,

people could easily access information and educate themselves about ecological topics.

Concluding the existing literature, environmental awareness grew over the years, leading to a

rising willingness to pay.

2.1.2 Willingness to Pay Price Premiums Across Different Eco-friendly Products

Since the WTP depends on various factors, it is highly fluctuant across product categories and

customer segments, as shown in the following examples.

In the food industry, 58 percent of the consumers are willing to pay a six to 20 percent price

premium and 13 percent even a surcharge of up to 50 percent for organic products (Aryal et al.,

2009). A five to ten percent premium can be observed (Xia & Zeng, 2006), for example, for

milk. Also, for coffee, the mere presence of "green" characteristics raises the willingness to pay

by 11.26 percent. (Galarraga & Markandya, 2004)

Looking at industrial products, one can identify differing ranges for the willingness to pay a

price premium. Ha-Brook and Norum (2011) present a survey that indicates that half of the

respondents were willing to pay a premium of 17 percent (five dollars) for cotton shirts with a
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30 dollars retail value (Ha‐Brookshire & Norum, 2011). Meanwhile, customers agreed to pay

a 9.5 percent premium on music players that cost 200 dollars (Drozdenko et al., 2011). Other

studies show the willingness to pay a price premium of twelve percent for (eco-)certified wood

products over noncertified alternatives (Ozanne, L.K. & Vlosky, Richard., 2003).

All in all, fluctuating WTPs are observable across industries and products. One determining

factor is the differing WTP within the population itself, as Royne et al. (2011) showed. While

91.2 percent of the respondents were willing to pay more for eco-friendly products, the

percentage of the WTP ranged from one percent to one hundred percent (Royne et al., 2011).

Possible reasons for these fluctuations will be discussed and tested in the following paragraphs.

Product characteristics like the buying frequency represent another factor for changing WTP

and shall further be examined.

Concluding, the WTP is inconsistent throughout the different product categories. However,

people are willing to pay the highest relative premium for clothing and nutritious products.

2.1.3 Influence of Customers' Demographics on the Willingness to Pay

Literature states various demographic characteristics as an essential determinator of the WTP

for the price premium. The majority of the studies support the fact that the WTP of women is

higher than for men (Batte et al., 2007; Dardanoni & Guerriero, 2021; Davies et al., 1995;

Drozdenko et al., 2011; Durán-Román et al., 2021; Ha‐Brookshire & Norum, 2011; Israel &

Levinson, 2004; Laroche et al., 2001; Royne et al., 2011; Shen, 2012). Nevertheless, Laroche

et al. (2001) contradict this belief as they state that "only men were willing to pay more for

control of air pollution" (Laroche et al., 2001). Further, Williams and Tranter (2004) also

question the prediction ability of gender for the WTP (Williams, Galina & Tranter, Bruce,

2004). Additionally, Balderjahn (1988) found a more eco-friendly behavior and more

environmentally conscious attitude among men. (Balderjahn, 1988)

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Another accepted but also highly discussed factor is the influence of age on the WTP. While

the majority of scholars again agrees that younger individuals have a higher WTP or are more

likely to pay the premium (Aguilar & Vlosky, 2007; Batte et al., 2007; Carley & Yahng, 2018;

Dardanoni & Guerriero, 2021; D'Souza et al., 2007; Israel & Levinson, 2004; Mahé, 2010;

Royne et al., 2011; Shen, 2012). Ha-Brookshire and Norum (2001) and Durán-Román et al.

(2021) argue that retired and young people are unwilling to pay. Furthermore, Laroche et al.

(2001) describe a change in research findings: Whereas early research identified the consumer,

who is willing to pay, to be younger than average (Anderson & Cunningham, 1972; van Liere

& Dunlap, 1981; Vining & Ebreo, 1990), recent studies found that she is relatively older than

average (Laroche et al., 2001; Samdahl & Robertson, 1989; Vining & Ebreo, 1990). These

differing opinions could support Williams and Tranter's (2004) belief that age is a poor predictor

for the WTP, which some other studies also endorse (Aguilar & Vlosky, 2007; Carley & Yahng,

2018; Laroche et al., 2001). However, another reason for the different observations could be a

missed correlation to income and children, two other determinants of the WTP. Indeed, older

people are more likely to have a higher income than younger ones. A high household income

is an indicator for people's higher WTP (Aguilar & Vlosky, 2007; Batte et al., 2007; Carley &

Yahng, 2018; Durán-Román et al., 2021; Israel & Levinson, 2004; Shen, 2012). While there is

only one contradicting study indicating that higher income results in a lower WTP (Drozdenko

et al., 2011), several researchers found that income is not a significant indicator (Dardanoni &

Guerriero, 2021; D'Souza et al., 2007; Laroche et al., 2001). Samdahl and Robertson (1989)

even claimed that the "environmentally conscious consumer is less educated and has a lower

income than the average American." Contradicting to Samdahl and Robertson (1989), the

majority agrees that higher education also implies a higher willingness to pay (Carley & Yahng,

2018; D'Souza et al., 2007; Israel & Levinson, 2004; Shen, 2012; Williams, Galina & Tranter,

Bruce, 2004).
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According to Royne et al. (2011), ethnicity also determines an individual's willingness to pay.

Bearing in that they included only a few Asian Americans, Hispanics, and others, they found

that African Americans were willing to spend second-most and Caucasians were the least

inclined to spend for the price premium. Hence, educating these ethnic groups might be

sufficient to increase their willingness to invest in eco-friendly products (Royne et al., 2011).

Israel and Levinson (2004) and D'Souza et al. (2007) suggest that living in a bigger city also

influences the willingness to pay positively. Furthermore, children are supposed to positively

impact the WTP (Batte et al., 2007; Laroche et al., 2001; Thompson & Kidwell, 1998) because

they make people reflect more on their impact on the environment and think about the future

evolvements. Some researchers again disagree as they state that consumers with children are

less likely to buy organic products (Loureiro & Hine, 2002; Wang & Sun, 2003). Nevertheless,

again, the household income might be the reason for these fluctuations because some families

with children might not afford organic products. However, they would buy them if they were

able to.

Corresponding to the aforementioned characteristics, one can divide the green customer into

different kinds: The dark green, pale green, and armchair green customers. The dark green

customers actively seek green products, the pale green ones buy green products when they see

them, and the armchair green ones care about the environment but do not buy eco-friendly

products (Davies et al., 1995).

To conclude, age, gender, education, and income are the most commonly observed, although

highly discussed, demographic indicators for the willingness to pay a price premium. Other

customer characteristics also play an essential role, like ethnicity and whether they have

children. Considering these (partially contradicting) findings, which demographical and

behavioral factors influence the WTP helps comprehend the fluctuations mentioned above.

Further, it is essential to point out that the samples were drawn from very different populations

(concerning the country, time frame, and background, among others). Therefore, it is difficult
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to compare the results of the studies thoroughly, but they serve as a good indicator, and their

consistency throughout many studies underscores their reliability.

2.1.4 Influence of Customers' Attitude and Behavior on the Willingness to Pay

The consumer's attitude is the most important determining factor for the WTP (Carley & Yahng,

2018; D'Souza et al., 2007; Tsen et al., 2006). Thus, environmental consciousness influences

the WTP positively (Bik Sia et al., 2013; D'Souza et al., 2007; Ha‐Brookshire & Norum, 2011;

Laroche et al., 2001; Royne et al., 2011). Also, a positive attitude towards the efficiency of

buying eco-labeled products increases the WTP (Chen, 2009; Davies et al., 1995; Pellegrini &

Farinello, 2009; Shen, 2012). In this case, efficiency addresses the perceived positive impact

on the environment when changing the buying behavior. Another factor concerning people's

attitude towards the environment is the perceived risk of environmental destruction, so the

higher the perceived risk, the higher the WTP (D'Souza et al., 2007; Laroche et al., 2001;

Williams, Galina & Tranter, Bruce, 2004).

People who put environmental conservation above their life convenience also show a higher

WTP. Shen (2012) and Hansla (2011) support this observation further as they conclude that

having altruistic values, representing a self-transcendence value orientation, is positively

related to pro-environmental behaviors. Altruism implies that an individual puts others' well-

being (therefore also of future generations) before her own.

However, contradicting research states that egoistic values may lead to the same outcome

(Hansla, 2011; Young, 2000). Corresponding to Young (2000), people with more self-oriented

motives tend to remain a volunteer longer, i.e., show social behavior for a more extended period

while less self-oriented people did so for a short time. Consequentially, contradicting values to

altruism can sometimes have a more substantial impact on a person's social (eco-friendly)

behavior. Other egoistic values like a strong health consciousness are also indicators for a

higher WTP (Bik Sia et al., 2013) since people believe that organic (eco-friendly) products
9

benefit their health. Royne et al. (2011) and Young (2000) explain that people gain personal

and internal contentment from behaving eco-friendly (or investing more in environmentally

friendly products), which is why they engage in such behavior.

The behavior's impact on the WTP is debatable: While some studies disagree that engaging in

eco-friendly behavior has an impact (Laroche et al., 2001), others emphasize its importance.

Carley and Yahng (2018) state that literature underscores the importance of the consumers'

engagement in environmental behavior as a predictor for the WTP. The impact of the behavior

is further stressed by Tsen et al. (2006), saying that people who recycle are more willing to pay

for green products.

All in all, an environmentally concerned mindset and the urge for internal satisfaction are the

most accepted indicators for an increased WTP among the literature. Significantly, Tsen et al.

(2006) emphasize the perspective (or attitude) as an even better predictor than demographic

characteristics. Therefore, one can divide the intrinsic satisfaction into two different categories:

"satisfaction [that is] derived from striving for behavioral competence," i.e., striving for inner

contentment, and "frugal, thoughtful consumption, and participation in maintaining a

community," i.e., altruistic thinking (Young, 2000).

2.1.5 Impact of Product Characteristics on the Willingness to Pay

Regarding purchasing decisions, the environmental impact can represent a more meaningful

indicator for the customer's choice than the product's brand name (Michaud & Llerena, 2010).

The most impactful characteristic to determine the WTP is the amount of the premium.

Consistent with the law of demand, the percentage of people willing to pay decreases when the

price premium increases. Aryal et al. (2009) and Gleim et al. (2013) even claim that price is

one of the main obstacles that keep customers from green consumption. (Aryal et al., 2009;

Gleim et al., 2013)

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People value environmentally responsible actions and eco-friendly behavior of the corporations

and include them in their purchasing decisions (Laroche et al., 2001). Therefore, the customer

considers the product itself and the company's background and actions behind it in her

purchasing decisions (Laroche et al., 2001). Nevertheless, Michaud and Llerena (2010) found

that the customer does not distinguish among the shares of recycled material in the product,

meaning the WTP does not depend on that (Michaud & Llerena, 2010). Consequentially, small

investments in eco-friendly products could lead to a high WTP, although the actual impact on

the environment is not too significant yet. The reason for that is a "black-white-thinking" of the

customer. She puts companies in an "ethical" or "non-ethical" box without distinguishing

between different nuances (Trudel & Cotte, 2009a).

According to Teisl et al. (2002), more frequently purchased products seem to have a more

substantial impact on the environment in the customer's perception (Teisl et al., 2002; Tully &

Winer, 2014). Thus, as observed in 1.3, low-priced, frequently purchased products indicate a

higher willingness to pay than high-priced, less regularly purchased ones as claimed by Teisl et

al. (2002).

Green industrial products are often directly associated with recycling, even though this is

sometimes not the case. However, consumers often assume worse quality for recycled products

and, therefore, are not willing to spend more on those (or even reluctant to buy them at all)

(Michaud & Llerena, 2010). On the contrary, consumers consider organic food (or "green"

food) to have better quality and are willing to pay more for it, as already mentioned in 1.3.

In conclusion, it might be interesting to examine the impact of the environmental attitude and

the perceived effectiveness in a Climate Neutral Checkout because these measures seem to be

the most prominent.

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2.1.6 Influence of the Checkout and Buying Process on the Willingness to Pay

Online shops and brick-and-mortar stores consistently reflect on their checkout design as it

severely impacts customers' buying behavior. For instance, if the store is decorated with many

plants, conveying a "green" (eco-friendly) radiance, the customer's WTP for eco-friendly

products increases (Ku & Zaroff, 2014). In context, stores with a current focus on green

products raise the customer's WTP for the premium by up to 50% (Batte et al., 2007).

Nevertheless, one should consider potential biases as the standard customer in these stores is

often more environmentally concerned, increasing the WTP as well.

Another significant predictor is the hassle related to the buying process (or to the procedure of

paying the price premium). The less stressful the process is, the higher the WTP (Tsen et al.,

2006). McCarty and Shrum (1994) supported this claim, observing that the more a person

perceived recycling to be inconvenient and stressful, the lower the probability that she engaged

in recycling. Consequentially, when the eco-friendly alternative is inconvenient, this drives

dissatisfaction. Transferred from Herzberg's theory about workplace motivation, this

convenience should be considered a "hygiene factor."(Herzberg et al., 1959; Teisl et al., 2002).

One needs to consider the importance of convenience when asking the customer to pay a

premium and, for example, to donate. Literature gives differing opinions on whether one shall

ask a customer for a donation (Trudel & Cotte, 2009a; Tsen et al., 2006). The majority (55%)

like to be asked, and of those who dislike it, 35% would still donate out of guilt (Good Scout

Group, 2015).

Similarly, managers often assume that consumers do not like being asked to donate, but

Giebelhausen et al. (2017) found that this apparent negative experience increases customer

loyalty. In context, most customers (65%) remember the last retailer that asked them to donate,

and 60% of the consumers feel that being asked creates a stronger bond and personal connection

(Good Scout Group, 2015), benefitting customers' loyalty. Therefore, "charitable giving" could
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directly help the environment and indirectly benefit the company that implements the

possibility.

All in all, the design of the checkout process can have a severe influence on the buying behavior:

While it is always important to design the buying procedure as efficiently as possible, asking

the customer to pay an additional fee to benefit the environment may lead to different outcomes.

2.2 Moral Licensing and Warm-glow

2.2.1 Introducing the Concept of Warm-glow Giving

One theoretical underpinning and a significant contributor to the willingness to pay for climate-

neutral products is the so-called warm-glow effect or warm-glow giving. The warm-glow effect

states that when an individual engages in altruistic behavior, she feels an emotional reward – a

warm-glow. Even though it originated in the economic theory (Andreoni, 1989), its relevance

in predicting the willingness to pay concerning charitable giving has been proven in many

instances (Giebelhausen et al., 2016; Giebelhausen et al., 2017; Giebelhausen et al., 2020). As

has been researched by Giebelhausen et al. (2016), warm-glow giving can apply to voluntary

green programs that are defined to "have a stated goal to improve the environment" and "utilize

the voluntary efforts of the sponsoring organization's customers." Given that this definition

matches the aforementioned Climate Neutral Checkout, one can assume that warm-glow giving

applies in this case vis-à-vis to the researched subjects of charitable organizations. On the one

side, the public goods benefits, i.e., altruistic motive, might be that they demand more of that

good, e.g., more justice in the world. On the other side, the sponsor might also have private

goods benefits by donating, for example, increasing their status or esteem or simply getting the

feeling they contributed (Andreoni, 1989). Therefore, the motivators for a generous action, i.e.,

opting for 100% climate neutrality, are altruistic and selfish. The combination of these two

motivators was coined as "impure altruism" (Andreoni, 1989).

13

To better understand the drivers of donations, literature further divides the private goods

benefits into seeking positive effects and avoiding adverse effects (Andreoni, 1990). While

facing positive consequences like prestige, respect, and friendship might drive people;

conversely, it might also motivate them not to face adverse effects like the scorn or disgrace of

their peers. A survey confirmed this concept by revealing that 35 percent of the respondents did

not like being asked to donate but still did it out of guilt (Giebelhausen et al., 2017). A second

study conducted by Giebelhausen et al. (2016) found that customers are more satisfied with a

service when they choose to donate, while customer satisfaction is decreased below the

expected value when they do not contribute. (Giebelhausen et al., 2016) This finding is

congruent with the warm-glow theory that hypothesizes that a good feeling originates from an

act of impure altruism, while people who do not participate fear to be held in low regard by

society for doing so.

2.2.2 Introducing the Concept of Moral Licensing

While warm-glow giving helps reconstruct the decision-making process for charitable giving,

the theory of Moral Licensing becomes relevant when observing post-donation behavior. This

theory indicates that associations with good behavior in the past or future increase the comfort

of engaging in detrimental behavior in the present (Blanken et al., 2014; Khan & Dhar, 2006;

Mazar & Zhong, 2010; Merritt et al., 2010; Monin & Miller, 2001). Thus, Khan and Dhar

(2006) showed that by acting in a morally good way, i.e., donating to charity, one is more likely

to exhibit adverse, self-indulgent behavior afterward (Khan & Dhar, 2006). Nevertheless, one

can also infer the opposite effect: When a person engages in self-indulgent behavior, referred

to as "guilty pleasure" by Giebelhausen (2020), then the likelihood of this person behaving in a

morally good way increases since they want to restore the balance of this mental account to feel

like a moral person towards themselves and others (Aronson et al., 1999). An individual can
14

follow a Moral Credentials logic that connects the undesirable behavior with the good deed and

hence justifies the initial unwanted behavior not to be that bad after all.

Instead, they can have a mental Moral Credits accounting system that does not engage in any

ex-post interpretation of the behavior but seeks to restore the balance between the good and bad

deeds (Giebelhausen et al., 2020). In a Moral Credits system, good behavior stacks up credits

that self-indulgent behavior consumes. The amount of Moral Credits generated or consumed

depends on the degree of good or bad behavior but is not entirely quantifiable. Kivetz and

Simonson (2002) proclaim that more Moral Credits are consumed for luxury than necessary

actions (Kivetz & Simonson, 2002). Hence, services or products, considered to be more of a

luxury or self-indulgent behavior, might profit most from introducing a donation scheme. As

the Moral Credits that were "lost" in this transaction can immediately be recharged (Merritt et

al., 2010) the reluctance to buy that product out of guilt is decreased.

2.2.3 Implications for our Thesis

Therefore, one can recognize that the theory of warm-glow giving and Moral Credentials

significantly impact purchasers' shopping behavior in various forms. Firstly, research finds that

customer loyalty and recognition might be positively affected by the possibility of a charitable

donation (Giebelhausen et al., 2017; Giebelhausen et al., 2020). The Good Scout Group (2015)

further supports this finding because it retrieved that 65 percent of customers know the last

retailer who was asking them for a donation. As a result of the increased customer loyalty, firms

might achieve higher revenues. According to Merritt et al. (2010), this effect on sales

performance is further perpetuated by the generation of Moral Credits during donations that

foster self-indulgent behavior (Merritt et al., 2010). As a result, firms that offer counter-

injunctive goods or services can increase their customers' lifetime value through this behavioral

phenomenon (Giebelhausen et al., 2020). Giebelhausen et al. (2017) again prove this hypothesis
15

to be correct since they showed that subsequent sales of non-counter-injunctive goods profit

from donations in the prior period.

Despite the numerous advantages outlined above in connection with charity checkouts, the

practical conclusions drawn from this are inconclusive. On the one hand, research suggests that

participation should be incentivized with a combination of private goods benefits and public

goods benefits to increase the share of customers participating in the program (Giebelhausen et

al., 2016). Contradictory, rewarding someone for donating to charity probably "crowds out" the

individual's intrinsic motivation. Consequentially, the crowding out could lead to lower

participation in the charitable program (Giebelhausen et al., 2016).

2.2.4 Ethical Problems

While this describes a managerial problem about the design of the charity checkout, there are

more downstream ethical issues that demand consideration. As outlined earlier, the experiment

participant can either rely on a mental mechanism according to the Moral Credentials or the

Moral Credits theory, both entailing negative implications. Moral Credentials mechanism

reinterprets ambiguous behavior like logging a tree or buying products involving child labor as

something non-prejudiced and positive if followed by planting a tree or donating to education

in developing countries (Cascio & Plant, 2015). Following a Moral Credits mechanism,

engaging in a charitable sense allows for subsequent counter-injunctive behavior by "paying"

with these Moral Credits. Gaining Moral Credits can indirectly increase the willingness to harm

others, the environment, or animals, e.g., by allowing oneself to buy eggs from mass breeding

farms in the supermarket. This effect concerning Moral Credits has been proven to a worrying

degree to foster negative behavior like showing a more substantial racial bias (Cascio & Plant,

2015), discriminating women in a sexist way (Giebelhausen et al., 2020), and being more likely

to cheat and steal (Mazar & Zhong, 2010) after Moral Credits have been gained through

altruistic behavior.
16

This problem becomes even more prominent when considering that, even though it is called

Moral Credits, this mechanism cannot weigh the substantial positive effect of one behavior

against the negative ones of another. Instead, Trudel and Cotte (2009) examined that people

assess choices on a binary scale: "ethical" and "not ethical." Therefore, a survey shows that the

respondents hardly differentiate between products that are 25%, 50%, or 100% organic,

arguably because all these options are simply considered "ethical" (Trudel & Cotte, 2009).

Consequently, this finding suggests that for companies, a minor investment in ethical practices

"pays off" as much as more extensive investments (Giebelhausen et al., 2017; Trudel & Cotte,

2009) as both cases trigger the same warm-glow effect. This finding corresponds to a race to

the bottom of how much investments will be made into sustainable activities to keep prices low

while reaping the aforementioned financial benefits of "ethical donations." Since Giebelhausen

et al. (2020) found that as little as a two-cent donation was sufficient to activate this warm-glow

effect (Giebelhausen et al., 2020), one cannot guarantee anymore that an ethical contribution is

proportional to the unethical damage done, which ultimately leads to greenwashing

(Giebelhausen et al., 2017).

Lastly, the literature covers the psychological manipulation entangled in charitable behavior.

Giebelhausen et al. (2016) outlined thatxpecting sales growth and increased customer loyalty

might incentivize companies to introduce charity checkouts (Giebelhausen et al., 2016).

However, when doing so, the company nudges the customer into a particular behavior by the

company on purpose. Dahl et al. (2005) describe that when presented with a possibility to

donate, the customer will encounter an "inaction guilt" when not participating in it (Dahl et al.,

2005); thus, their participation is driven by avoiding that guilt (Good Scout Group, 2015; Peloza

et al., 2013). Therefore, the customer is blackmailed with her bad conscience to donate,

representing the ground for moral suspicion.

17

2.3 Adoption of Corporate Sustainability Initiatives

2.3.1 Corporate Sustainability Drivers

Over recent years, the research body on integrating corporate sustainability into strategic

management has been growing (Engert et al., 2016). Silvestre et al. (2018) describe that

corporate sustainability produces tangible and intangible benefits: economic developments

(Bird et al., 2007; Jeronimo Silvestre et al., 2018; Lee et al., 2013), a higher attractiveness for

investors (Searcy & Elkhawas, 2012), a higher emotional attractiveness for employees

(Linnenluecke & Griffiths, 2010), better risk management (Engert et al., 2016), showcasing a

higher reputation and better level of governance (Mackenzie, 2007). Even though these

advantages perpetuate the adoption of sustainability practices within an organization, research

suggests that the main drivers for this adoption can be divided into internal and external ones

(Avery, 2015; Engert et al., 2016; Etzion, 2007; Lozano, 2015).

Internal or endogenous drivers for the adoption of sustainability practices originate from within

the firm. The two main drivers for this are strategic planning and resources management (Engert

et al., 2016). Strategic planning, also referred to as leadership by Lozano (2015), is a crucial

driver for corporate sustainability (Baumgartner & Ebner, 2010; Graafland & van de Ven,

2006); and describes the degree to which sustainability principles are integrated into strategic

business processes. According to Avery (2015), an alignment with and involvement of the

board of directors further aggravates the impact of sustainability. Additionally, Etzion (2007)

describes that some even treat their sustainability strategy as distinct from their core strategy.

Silvestre et al. (2018) distinguish three different company types concerning their strategy

adoption: "conventional," "responsible," and "essential." These company stereotypes vary in

the degree to which they value economic profits over societal responsibility and how proactive,

compared to reactive (e.g., responding to legislation), they are in their sustainability initiatives.
18

On the other hand, resource management, or competitiveness, say that a company wants to stay

competitive across all three dimensions of the Triple Bottom Line (TBL), which requires

corporate sustainability action to be taken. Lozano (2015) also confirmed this as he found that

a holistic alignment of this competitiveness along with the TBL with the business case further

accelerates sustainability endeavors.

In contrast to the internal drivers, external or exogenous drivers for corporate sustainability are

1) regulations and rules, 2) social values and norms in the form of reputation, and 3) stakeholder

reactions (Jeronimo Silvestre et al., 2018; Lozano, 2015). Regulations and rules are supposedly

the most critical process that leads to corporate sustainability (Etzion, 2007) and can lead to

strategic change. Still, given that this is a response to alternating jurisdiction, this change can

be differentiated from the internal strategic driver of sustainability in firms (Engert et al., 2016).

2.3.2 Corporate Sustainability Initiatives' Trade-offs

Older discussions about sustainable development (Gladwin et al., 1995; Shrivastava, 1995;

Shrivastava & Hart, 1995) mainly focused on "win-win paradigms" that claim positive results

throughout the TBL (Hahn et al., 2010). Contrary, trade-offs resulting from sustainable

development are recently taken into account as well. Hahn et al. (2010) state that positive

strategic effects throughout the entire TBL are rather unusual and sometimes not even desired

when other positive TBL effects surpass them (Hahn et al., 2010). As Engert et al. (2016)

suppose, these trade-offs, which eventually also affect a company's economic performance,

limit the willingness to drive sustainability integration (Engert et al., 2016)—additionally,

restructuring the company and aligning its strategy toward sustainability bear the firm with non-

neglectable additional costs.

Haffar and Searcy (2017) outlined that one can divide the trade-offs associated with corporate

sustainability into three categories:

1) Tradeoff between private value vs. creating shared value

19

It occurs when one opportunity might be ideal in creating the most value for society, yet

this option is not the one that creates the most value for the company.

2) Trade-off between scope and depth of initiatives

It describes that managers, who are bound to resource limitations, must choose to either

engage in more sustainable initiatives with only a limited depth or choose the initiatives

selectively to pursue them more thoroughly.

3) Trade-off between measurement and management

As a result of the complexity of sustainability management, more vigorous

sustainability efforts might diminish sustainability performance due to adverse second

or third-order consequences (Csutora, 2011).

Generally, the adoption of corporate sustainability and the degree of its success is highly

individual and dependent on many subjective characteristics for each firm due to the complex

nature of sustainability management in practice (Haffar & Searcy, 2017). Due to this high

complexity, the literature body is not that conclusive, and instead, particular organizations need

to be observed.
20

3 Methodology
3.1 Purpose

This study aimed to determine the customer's willingness to pay a price premium to compensate

for the CO2 emissions of the purchased product in online shops because, given the current

COVID-19 pandemic, it might be easier to talk to online shops that did not struggle as much as

brick-and-mortar stores. Further, we expected online shops to be more open to this idea. One

reason for this was that a central technical solution, i.e., changing the website's layout, might

be more straightforward than to rethink the whole physical store and relabel every product.

Within the focus area of online shops, the subset of physical products seemed better suited than

services or digital products. The reason for that was a simpler determination of the carbon

footprint of physical products. Also, customers can better relate to the carbon footprint

associated with the production, packaging, and logistics of a physical product than with the

overhead emissions of digital products or services.

We introduced two different research methods to collect information: On the one hand, we

conducted a survey to gather primary data and examine the found customer characteristics for

CO2 compensation while understanding the customer attitude towards the CNC. On the other

hand, qualitative interviews allowed us to obtain a second perspective of these findings of the

customer behavior from experienced companies. The interviews further presented us with the

opportunity to understand the company's attitude towards the CNC and identify factors that

drive sustainability adoption. According to Ivankova et al. (2006), this sequential explanatory

survey design enables a more comprehensible analysis that exploits the advantages of

quantitative and qualitative research methods. Further, it allows the research methods to

complement the other findings (Ivankova et al., 2006).

We chose Zalando SE ("Zalando") and Emma Matratzen GmbH ("Emma"), as they operate

long enough to have reliable customer knowledge and cover different product segments.
21

Additionally, we received some information in the form of a written position from Formel Skin

Derma GmbH ("Formel Skin ") about their attitude towards a CNC.

How we aimed to achieve this thesis' objective is detailed below.

3.2 Quantitative Research: Online Survey

3.2.1 Participants

We collected data with an online survey distributed through Social Media and personal

connections, including distribution sources like connections to South Pole Carbon Asset

Management AG employees, university staff (Hochschule Koblenz), and employees of Socoto

GmbH & Co KG, for our first research method. Whereas the online survey has certain

advantages and disadvantages, it is superior to a paper version since random sampling can

quickly be assured (Wiersma, 2013). In addition, it was less problematic to conduct online

interviews during the current situation of COVID-19. From the 385 answered surveys, we only

included 323 as the others were incomplete. Of the 323 complete responses, 54% were female

and 46% male. The addressed people included different age groups from under 18 to over 65

years old, relatively higher educated people (the majority was at least currently pursuing a

university degree), and varying income groups. As the survey was conducted in Germany and

the questions were German, most participants had a similar cultural background. Furthermore,

we incentivized people to participate by stating that we donate 1€ for a charitable organization

for each filled-out survey.

3.2.2 Experimental Design

The survey consisted of 14 different questions: five addressing the demographic characteristics,

seven concerning the respondent's environmental attitude, and two about the absolute

willingness to pay (WTP). To accomplish the study's overall objective, we developed six

hypotheses to be proven by the survey, which asked participants for their willingness to pay a

premium to compensate the CO2 emissions of their purchase described in the survey.
22

First, we wanted to see whether the product category influences the respondent's relative

willingness to pay (RWTP). Research indicated different WTP for different product categories.

Also, Teisl et al. (2002) stated that the customer's WTP increases when they purchase a product

more frequently because these seem to have a more substantial impact on the environment.

Thus, we developed Hypothesis 1 and introduced an experiment by randomly dividing the

participants into two groups to assure that the responses are independent and identically

distributed. Group 1 needed to state their willingness to pay for a price premium on luxury

products, which people mostly enjoy buying and are rarely in real need of. We used the purchase

of a pullover and two shirts and a pair of jeans in this case. On the other hand, Group 2 expressed

their willingness to pay concerning "necessity products," representing purchases one does not

want to spend much time on and does not enjoy. In the following, we used the terms "necessity

products" and "sleep products" interchangeably.

Further, the terms "luxury products" and "clothing" are also congruent. Here, we used a mattress

and a pillow. We were aware that necessity is a somewhat subjective measure, so we wanted to

individualize the products to allow people to relate better to the situation.

Hypothesis 1: The amount of the WTP depends on the product category, while we

assume that luxury products cause a higher WTP.

We assured an independent distribution as the participant was randomly assigned to one of the

two groups by the survey provider when clicking on the link. Thanks to our large sample, we

might also assume that the demographic distribution between the two groups is similar.

Nevertheless, we will check whether the distribution is indeed independent and identical.

Also, we wanted to confirm that the influencing demographics discovered in the literature

review behave similarly when moving away from a general perspective (eco-friendly products)

to a specialized one (climate-neutral products). Consequentially, we incorporated variables for

gender, age, educational level, income, and the NEP in our survey. We used multiple-choice

questions for all categories, not absolute values, to make the survey participation easier and
23

provide the participants with a more anonymous feeling. We assumed this to decrease the rate

of incomplete responses. Furthermore, we wanted to examine an overall trend rather than

specific differences. The detailed survey design for demographics can be found in Annex A.

Hypothesis 2: Consistent with existing literature, the following demographics influence

the RWTP:

o H2.1: Females have a higher RWTP on average.

o H2.2: As the income increases, the RWTP increases.

o H2.3: Higher educational degrees lead to a higher RWTP.

o H2.4: As the age increases, the RWTP decreases.

As mentioned in the literature review, an eco-friendly attitude has the most significant impact

on the WTP. Since former scales to measure environmental mindset neglected the limits of

growth for the society, we decided to use the New Environmental Paradigm (NEP) scale (Annex

E) to verify this assumption. Furthermore, it provides more comprehensive coverage of the

ecological worldview and avoids a missing valance in the item direction of the original scale

(Dunlap & Van Liere, 2008). Nevertheless, we adjusted it to be shorter and not overwhelm the

participant. Therefore, we only included some statements, which are detailed in Annex A.

However, we were aware that this might lead to potential shortcomings like an inaccurate

portrayal of the green attitude. We used a Likert scale to quantify the customer's ecological

attitude and avoid possible frustration for the participant as it takes less time to answer than

entering text responses. As Finstad concluded, a 7-point Likert scale is more sensitive and more

likely to reflect a respondent's actual subjective evaluation than other Likert scales; so, it

seemed like the best option. Furthermore, it reduces interpolations while remaining short

enough to be answered efficiently (Finstad, 2010). Subsequently, we calculated the "NEP" by

using the average of all responses to the statements, leaving us with an absolute value.

So, we introduced the questions concerning the environmental attitude after asking for the WTP

to avoid priming the participant into responding in a certain way.

24

These questions shall help us to confirm the following hypothesis.

Hypothesis 3: A green attitude positively impacts the willingness to pay a price premium

to compensate the CO2 emissions of the purchased products.

Furthermore, we included the respondent's position, whether she is concerned about

greenwashing when engaging in a CNC. The Oxford Dictionary defines greenwashing as

"activities by a company or an organization that are intended to make people think that it is

concerned about the environment, even if its real business actually harms the environment"

(Oxford English Dictionary Online). Firms engage in greenwashing by selected projects or

initiatives that contribute to their environmentally responsible image. We assumed the people's

belief that a company uses the CNC for greenwashing purposes to impact the WTP severely.

Hypothesis 4: The more strongly a customer perceives a CNC as greenwashing, the

lower the WTP.

Additionally, we included a 7-point Likert scale to learn about the perceived effectiveness of

the CNC. Here, the respondent should indicate whether she thinks that a CNC is an effective

tool to reduce emissions and the negative impact on the environment.

Hypothesis 5: A higher perceived effectiveness leads to a higher willingness to pay a

price premium.

An assumption we composed from the literature review is that with an increasing price, the

relative willingness to pay decreases, partly due to the natural law of demand (Aryal et al.,

2009). To prove this point, we included two scenarios concerning two different price segments

in our study. In both experiments, the cheaper price scenario addressed a price of €50, while

the higher price scenario used €200. To allow the participant to put herself more into the

situation and make it more realistic, we provided specific examples: a purchase of a pullover,

and respectively a purchase of two shirts and one pair of jeans for Group 1; a mattress and
25

respectively a pillow for Group 2. Nevertheless, it is essential to bear in mind potential biases

when evaluating these outcomes because participants might already have a good feeling (warm-

glow) after paying a premium for the first time. Hence, they might understate their genuine

willingness to pay when responding to the second scenario. To avoid this bias, we randomized

the sequence of the questions.

Furthermore, we are aware that we cannot infer any algebraic relation (linear, logarithmic,

exponential of sorts) between price and the relative willingness to pay as we chose only two

distinct price levels. Nonetheless, we can conduct a statistical test, whether the hypothesis that

these two relative price premiums are the same is significant or not. This test will yield a

conclusion on whether the relative WTP is indeed dependent on the product price.

Hypothesis 6: The relative WTP depends on the product's price and decreases as the

product price increases.

3.2.3 Analysis

To answer the presented research questions from the collected data, we used different

methods for our analysis. Primarily, we ran separate regressions in RStudio, a software for

data analysis, to examine the relevance of the different variables. We introduced the RWTP as

the dependent variable, which measures the premium customers are willing to pay as a

percentage of the product price.

As independent variables, we integrated dummy variables for the gender, age, income, and

educational background and an absolute value for "effectiveness" and the new environmental

paradigm ("NEP"), which resembles the respondent's environmental attitude, and the attitude

towards greenwashing ("greenwashing") (Annex A)1. Since people receive a degree in

1
The dummy variables can have the following values. Age: “age25to34”, “age35to44”, “age45to54”, and
“ageAbove55”. Education: “degMittlereReife”, “degApprentice”, “degHighSchool”, “degBachelor”,
“degMaster”. Income: “inc20to39”, “inc40to59”, inc60to79”, “inc80to99”, and “incAbove100”. In the following
they are indicated by quotation marks, e.g. “age25to34”.
26

Germany after finishing the tenth grade, the so-called "Mittlere Reife," we also included it in

the categorical variables besides the other commonly known degrees as it is a valid degree to

start a job. Additionally, we analyzed whether it is reasonable to include the product category

and the price as a dummy variable. Afterward, we included the dummy variable "priceHigh"

for the price and "prodMattress" for the product category.

Before including them in the regression, we tested every independent variable that has not yet

been used in the literature to predict the customer's WTP for eco-friendly products on its

statistical significance. In concrete terms, the independent variables "prodMattress",

"priceHigh", "NEP", "greenwashing", "effectiveness" was tested against the Null hypothesis

that their influence on the RWTP is zero.

To evaluate the number of people a company can expect to use the CNC and their

characteristics, we conducted a logistic regression. Even though their WTP might be interesting,

the company probably wants to know an indication of the percentage of their customers who

will use this service. It further might be interesting to determine which data should be gathered

in connection with the CNC to predict its adoption. Therefore, the findings will cover the

determinants for the likelihood that a given customer will use the CNC. Logistic regression on

these binary dependent variables will show which determinants are significant for determining

whether a customer is willing to pay.

In the next step, we analyzed the dependent variable RWTP to assess which regression fits best.

Since people cannot state an RWTP below 0% and above 25% (in the high-price scenario) or

30% (in the low-price scenario), our dependent variable was censored from both sides. Hence,

we conducted a Tobit analysis to find a linear relationship among the variables. Using a Tobit

model was necessary to adopt the model to the censoring in our data, which would bias the OLS

(ordinary least squares) estimators.

However, we also conducted an OLS regression and compared it to the Tobit analysis as this

regression method enabled us to interpret the coefficients' effects on the RWTP. An OLS
27

method is the most popular method to estimate unknown coefficients in a linear regression

model.

Further, it might be interesting to see whether interaction effects occur in our model. Suppose

the effects of the experiment design, i.e., product category and price, are significantly distinct

from zero; they are considered relevant for predicting the RWTP. In that case, we will conduct

a regression to assess the impact of the other independent variables, respectively. In the next

step, we tested whether the influence of the independent variables is different or consistent

across experiments, e.g., whether the demographics affected the RWTP for clothes and sleep

products to the same degree. If the regression functions are comparable, we could merge them

without introducing interaction effects while introducing a binary variable for either product

category or price.

Additionally, we explored whether a linear regression model is best suited or certain

independent variables contributed to a non-linear relation. Having thus selected the final

independent variables for the regression model, we evaluated whether each dummy variable in

the regression is indeed distinct or similar enough to be merged. Merging variables might

remove redundancy from the regression model if a particular dummy variable does not add a

distinct value.

Moreover, we used an ANOVA analysis with a Bonferroni posthoc pairwise test to assess if the

means of the explanatory variables are statistically distinct from each other, supporting the

thesis that these are good predictors of the dependent variable.

Finally, we visualized the responses of each of the four experiments in terms of the share of

respondents that are willing to pay a certain premium for the CNC. Compared to the regression

analysis, which can forecast spending behavior on an individual basis, this visualization of the

whole group allowed deriving conclusions on a societal level. In concrete terms, when the

customer characteristics, like demographical information, are unavailable, the probability of a

28

customer paying a specific premium amount is equal to the relative frequency of customers

paying that amount among the whole population.

3.3 Qualitative Research: Interviews

3.3.1 Description of Data Collection

The interview partners were selected based on their role in the organization and the size of the

online shop. A more extended operation of an online shop, i.e., a minimum existence of five

years, ensured sufficient customer knowledge based on the interviewees' judgment. This

database allowed us to control the validity of their claims. Further, we selected marketing

directors or sustainability practitioners in the company since they have the necessary oversight.

The two interviews took place in a digital face-to-face environment and followed different

structures (semi-structured, unstructured). Further, we requested a written positioning from

Formel Skin's founder Anton Kononov regarding the CNC.

The digital face-to-face interviews with Julien Slijan from Zalando and Philipp Burgtorf from

Emma both spanned over one hour and were conducted online via Microsoft Teams. Due to

technical difficulties, the interview with Emma was not recorded; instead, we took notes

manually. However, we recorded the interview with Julien Slijan and transcribed it afterward.

3.3.2 Analysis

The interviews with the two company representatives have been transcribed and evaluated by

thematic analysis, including identifying and examining two fundamental themes, which we

will further elude in each interview.

3.3.3 Objectives

By interviewing selected company representatives, the insights from the quantitative survey

should be complemented and contrasted by the company's perspective and attitude towards the

CNC. While the survey data could be used to understand the individual's decision-making
29

process, the interviews aim at gaining a picture of the corporate side of the topic. This shall be

achieved through investigating which motives drive the CNC adoption and what trade-offs

accompany such an introduction.

Ultimately, combining the insights from both methods will serve as a heuristic to determine for

which companies it is favorable to introduce a CNC scheme and for which companies it is less

so. This qualitative statement could be based on two things. On the one hand, the findings from

the quantitative analysis will yield information on which customer demographics are more

likely to adopt a CNC and which customer groups prove to be more averse. On the other hand,

we expected the interviews to reveal certain factors that support or inhibit the adoption of the

CNC within the firm.

3.3.4 Scope

In essence, as outlined in the purpose of the methodology, the interviews aim to reveal the

organization's general attitude towards the introduction of a CNC and derive new insights about

implications for the firm upon introducing a CNC. Therefore, the respective scope of the

interview depended strongly on whether the company already introduced a CNC.

While Emma and Formel Skin do not offer a CNC as of this writing, Zalando already partly

features this option on their website since they offer the customer to compensate for the

emissions related to the logistics and packaging. Hence, the interviews with the representatives

of the two former companies focused on understanding the company's perception of their

consumers and their respective environmental attitudes. Conversely, the interview with

Zalando, which offers carbon compensation on their website, also aimed at understanding their

attitude towards the CNC with interest to uncover potential drawbacks of the introduction of

the CNC. Further, these interviews allowed for the possibility to get additional practical insights

into what drives the adoption of the CNC. Based on this, we concluded determinants of a

company's attitude towards introducing a CNC.

30

In the case of Zalando, it was evident that the company is aware of the concept of the CNC

since they already included it. Consequentially, we allowed the interview to be more to the

point and semi-structured. In contrast, it was unclear whether the concept of the CNC would be

beneficial for Emma and Formel Skin. Therefore, it was necessary to design these conversations

in an unstructured way.
31

4 Findings
4.1 Quantitative Findings

The purpose of our findings was to develop a regression model that helped us forecast the

relative willingness to pay (RWTP).

4.1.1 Data Cleansing

Within one week of publication, 385 people started the survey, of which 62 responses were

invalid as those were not submitted.

Given the survey design, it was possible to leave questions unanswered, which was the case for

only a fraction of the responses (3.7%). As omitting a not filled out independent variable would

skew the regression function, we filled blank cells with the variable's arithmetic mean for

independent variables that followed an interval scale, i.e., "greenwashing", "NEP", and

"effectiveness". Conversely, we inserted the median value for the dummy variables that

followed an ordinal scale for age, education, and income.

Frequency Distribution
120

100
#Respondents

80

60

40

20

RWTP
Figure 1

As respondents could indicate their willingness to pay (WTP) through a slide control with the

default value 0, we assumed the respondents who failed to indicate a distinct WTP to be
32

unwilling to pay anything. Figure 1 represents the frequency distribution of the different

RWTPs.

As shown in table 1, every age class was represented

Age groups Responses
among the 323 respondents, yet from the age group below Younger than 18 3
Age 18 to 24 186
18, there were only three data entries, and for the age Age 25 to 34 36
Age 35 to 44 30
group above 65, there were only two. Given the small
Age 45 to 54 38
sample of these age groups, the responses might vary Age 55 to 64 28
Age 65 and above 2
significantly, resulting in disturbances in the regression. Total 323
Table 1
Therefore, we added these five entries to their adjacent

groups. Consequently, the age consists of the following subgroups: younger than 25, 25 to 34,

35 to 44, 45 to 54, and older Product Category Number of responses Average RWTP
Product Price 50 200 50 200
than 55. Clothing 163 163 6.82% 4.17%
Sleep Products 160 160 7.54% 6.19%
Lastly, we regarded every
Total 323 323 7.18% 5.17%
submission as two responses, one stating the RWTP for the compensation of the low- Table 2

priced product and one for the high-priced product. To include them in our analysis, we

introduced a dummy variable ("priceHigh") to distinguish between the two responses (table 2).

Consequentially, we ended up with 646 entries.

4.1.2 Relevance of the Newly Introduced Variables

As precluded in the methodology, we tested every independent variable that the literature has

not used to predict the WTP for eco-friendly products whether it is relevant for predicting

WTP. These independent variables concerned the product category ("prodMattress"), product

price ("priceHigh"), NEP ("NEP"), whether the respondent considers the CNC as

greenwashing ("greenwashing"), and the effectiveness of the CNC ("effectiveness"). We

relied on qualitative as well as graphical reasoning in the discussion about integrating the
33

variables. After including the variables in the regression function, we assessed them based on

their p-values, which shows their statistical significance.

4.1.2.1 Product Category Product category Number of responses Average RWTP

Clothing 163 5.50%
We calculated the RWTP by
Sleep Products 160 6.85%
distinguishing the absolute Total 323 6.17%
Table 3
WTP of the customer by the product category. This differentiation resulted in an average

RWTP across all 160 responses for the sleep products of 6.85%. Similarly, the average WTP

across all 163 responses for the clothes yielded a 5.5% premium for carbon compensated clothes

(table 3). The differences in the number of responses resulted from the survey design. As the

software randomly decided which respondent saw which experiment and some respondents did

not finish their survey, we can conclude that more people presented with clothing products

exited the survey early, leading to differing numbers of responses. Given the high number of

responses per group and the significant difference between these two values, we assumed the

product category to be an influential determinant of the customer's WTP and thus included it in

the regression. The regression model also contained a further analysis of the statistical relevance

and implications for our research questions.

4.1.2.2 Product Price

Further differentiating the product category by price revealed a significant difference in the

RWTP for both clothing and sleep products given different price levels. The discrepancy

between the low and high-priced sleep products equaled 1.4 percentage points (pp); this gap

was 2.7pp for clothing (see table 2). These 2.7pp corresponded to a relative decrease of 38% in

the RWTP for higher-priced clothes.

A decline in the RWTP upon a price increase means that the absolute WTP might be

proportional to the product price but not linear. Therefore, we assumed the product price to

have a statistical influence on the RWTP and thus integrated it into the regression.
34

4.1.2.3 New Environmental Paradigm

RWTP according to NEP

180 9%
160 8%
140 7%
#observations

120 6%

RWTP
100 5%
80 4%
60 3%
40 2%
20 1%
0 0%
0 1 2 3 4 5 6 7 8
NEP

numbers of observations weighted average of RWTP

Figure 2

The New Environmental Paradigm (NEP) describes the environmental consciousness of a

customer and ranges from 1 to 7. When plotting the average RWTP by the value of "NEP",

there was an indication that this variable could determine the RWTP. Depending on "NEP, the

RWTP ranged from 2% to 8%, which is distinct from the average of circa 6%, indicating a high

validity as seen in figure 2. For the observations for "NEP" equal to 3,4,5,6, and 7, there was a

sufficient number of people (≥58) who indicated the difference which ensures the reliability of

the observed trend.". Thus, "NEP" will be included in the regression as well.

Given these observations, it was difficult to infer the relation between "NEP" and the RWTP.

While a linear relationship is possible, one could as well argue a cubic relationship. A cubic

relation would appear logical, as one could claim that environmental consciousness does not

have constant marginal effects on the WTP, but the higher "NEP", the stronger the marginal

effect.

4.1.2.4 Greenwashing

We deemed the independent variable "greenwashing" to have merely a minor predictive power

on the RWTP because figure 3 showed no relevant graphical correlation between the degree to
35

Average RWTP per perceived likelihood of CNC used for greenwashing

8%
7%
6%
5%
4%
3%
2%
1%
0%
1 2 3 4 5 6 7
Figure 3

which a customer thinks engaging in the CNC is greenwashing and her RWTP. Nevertheless,

"greenwashing" will remain part of the regression to serve as a control variable even though we

will not further analyze the statistical influence of this variable in depth.

As can be seen in the visual presentation of the data, there appeared to be a positive relationship

between perceived greenwashing and the RWTP for the greenwashing ranging from one to four.

Nonetheless, this relation did not continue for the rest of the data points, in which the WTP

followed no trendline but instead alternated, i.e., it decreased and then increased again.

Although we could infer a positive relation between greenwashing and the RWTP, this would

have little practical plausibility. The belief that the CNC was greenwashing should if at all,

decreased the motivation to pay a price premium for carbon compensated products instead of

increasing it.

As a result of this low explanatory validity of "greenwashing," we supposed it might not be

significant due to high multicollinearity. As a result of this low explanatory validity of

"greenwashing," we supposed it might not be significant due to high multicollinearity. We

“NEP” “greenwashing” “effectiveness”

“greenwashing” 0.103 1.00 -
“effectiveness” 0.0907 -0.0318 1.00
Table 4
36

examined whether there is a strong correlation between "NEP" and "greenwashing" in concrete

terms.

“NEP” “greenwashing” “effectiveness”

“greenwashing” 0.103 1.00 -
“effectiveness” 0.0907 -0.0318 1.00
Table 5

In our data, the Pearson correlation coefficient equaled 0.1013, which corresponds to a low

correlation. It needed to be at least 0.4 to indicate a moderate correlation (Akoglu, 2018). Thus,

the low influence of greenwashing on the RWTP was not due to a high level of collinearity.

Further, this pairwise correlation analysis (table 4) exhibited that the other independent

variables had a low correlation with each other.

4.1.2.5 Effectiveness
Effectiveness number of respondents average WTP
Finally, we included the 1 35 1.726%
2 48 4.149%
respondent's position on whether
3 67 6.850%
4 80 6.230%
she considered carbon
5 63 8.604%
compensation an effective method 6 21 6.582%
7 9 9.611%
against carbon emissions or not in Total 323 6.141%
Table 6
the regression due to the positive relationship between the “effectiveness” and the average

RWTP (table 5). Apart from one outlier for “effectiveness” equal to six, one could observe an

increase in the RWTP as “effectiveness” increased. The overall absolute difference was 7.9pp,

unprecedented by the other data. Therefore, “effectiveness” was assumed to be an efficient

determinant of the RWTP.

This finding was reasonable since the motivation to donate for a carbon-compensated product

should, in theory, be arguably lower for a customer who believes that this compensation is not

an effective tool.
37

4.1.3 Comparing Different Regression Methods

4.1.3.1 Logistic Regression

Before analyzing the extent to which customers are

willing to pay by an OLS (ordinary least squares)

estimator and Tobit regression, we examined what

determined whether a customer is willing to pay a

premium for climate neutrality or not. Since a

customer could either be willing to pay or not, the

survey design had to allow also a WTP of 0. As seen

in the frequency distribution (figure 1), a substantial

amount of the respondents stated a WTP of 0.

Consequentially, a logistic regression on this binary

dependent variable was necessary to show which

determinants were significant for determining

Table 7
whether a customer is willing to pay (table 6). The regression yielded that the intercept and

“effectiveness” were highly significant at a 0.1% level. Otherwise, “age35to44” was significant

at a 1% level, and “ageAbove55”, “degMittlereReife” and “inc60to79” were significant at a 5%

level. Furthermore, the price and the mattrass did not seem to impact whether a person is willing

to compensate. Instead, demographics and especially the personal attitude were critical

influencing factors.

This analysis yielded the following regression function to predict whether a certain customer is

willing to pay or not:

WTPlogistic (y/n) = 0.576 - 0.158 x age35to44 – 0.133 x ageAbove55 + 0.212 x

degMittlereReife – 0.133 x inc60to79 + 0.063 x effectiveness

38

4.1.3.2 Tobit Analysis

Having concluded on the factors that influence

whether a customer is willing to pay, we now

examined the determinants of the relative willingness

to pay. Since the RWTP is restricted on both sides due

to the survey design, a Tobit analysis (table 7) was

better suited to describe the underlying censoring in

the data. A Tobit analysis yielded similar significant

estimates as the Logistic, although different ones

proved to be significant in this case. While the

variables “NEP” and “age35to44” became significant

at a 5% level, “degBachelor” and “inc40to59” were

significant at a 10% level. As in the Logistic analysis,

Table 8
“effectiveness“ was highly significant (at 0.1% level)

as well. An interesting observation was that the price also became highly significant in the Tobit

regression. Therefore, one could conclude that although the price of the product did not

determine whether someone is willing to compensate, it was a meaningful predictor for the

RWTP for a price premium to compensate. Concerning the orientation of the estimates, there

were differences in “female”, “age45to55”, “degHighSchool”, “degBachelor”, “degMaster”,

“children”, “inc80to99”, “incAbove100” and “priceHigh” between the Logistic Regression and

the Tobit analysis. This could mean that, for instance, females were indeed less likely to

compensate, but females that are willing to compensate had a higher RWTP than males that

were willing to pay. However, these estimates were neither significant in the Tobit nor the

Logistic analyses, which we neglected the differences.

So, we found a regression function that predicts the customer’s RWTP for values between a 0%

and 30% price premium:

39

RWTPTobit = 0.0038 x NEP - 0.0256 x age35to44 + 0.022 x degBachelor – 0.0166 x

inc40to59 + 0.013 x effectiveness – 0.02 priceHigh, with 0 ≤ RWTP ≤ 0.3

4.1.3.3 OLS Regression

To interpret the impact of the coefficients on the RWTP and examine whether a linear model

also fits, we further conducted an OLS regression. The OLS regression also showed similar

significance among the different estimates. Compared to the Tobit model, “degHighSchool”,

“degBachelor”, “degMaster” and the product category were more significant in the OLS

analysis, while “inc40to59” stayed at the same significance level. However, “NEP” and

“age35to44” were less significant than in the Tobit analysis. Therefore, the two models were

similarly robust. Furthermore, they also did not differ in terms of the estimates’ orientation.

Hence, both models generated analogous results. This yielded the following regression function

to predict the RWTP:

RWTPOLS = (-0.021) x age35to44 - 0.02 x degHighSchool – 0.025 x degBachelor –

0.018 x degMaster + 0.0148 x inc40to59 + 0.011 x effectiveness – 0.02 priceHigh +

0,015 x prodMattress

In the following, we used the results of this analysis as our base case.

4.1.4 Analysis of Different Subgroups

To examine whether the customer behavior essentially stays the same throughout the different

experiments or changes fundamentally, we needed to conduct separate regressions that

addressed the individual cases first.

4.1.4.1 Independent and Identical Distribution within the Subgroups

Before comparing the analyses of the different subgroups, we needed to confirm that the

subgroups are independent and identical distributed. As the respondents were randomly

assigned one of the two experiments by the survey software, we could assume that the

distribution of them is independent.

40

Even though randomizing should result in identical Variable Sleeping Product Clothing
Degree
groups, it could be that by chance, for example, Apprenticeship 6% 4%
MittlereReife 2% 4%
disproportionally more male respondents ended up High School 29% 31%
Bachelor 35% 30%
in one group than in the other. Therefore, we needed Master 22% 24%
Doctor 7% 6%
to compare the demographics of the subgroups to Gender
Male 48% 42%
assure an identical distribution.
Female 52% 58%
Age
Concerning the gender of the subgroups (table 8), we
Under 18 1% 1%
noticed that more female respondents were assigned 18 -24 59% 56%
24 - 34 12% 11%
the clothing group and less male than the sleeping 35 - 44 7% 11%
45 - 54 12% 12%
product group. However, these represented only 55 - 64 9% 9%
65 + 1% 1%
marginal differences. Income
<20,000 60% 58%
Regarding the other demographic characteristics, we 20,000 -
39,999 15% 18%
could observe similar patterns. Although there were 40,000 -
59,999 13% 15%
minor deviations between the two experiment 60,000 -
79,999 6% 7%
groups, they seem almost identical. 80,000 -
99,999 2% 1%
Thus, we could assume that the distribution into the 100,000 + 4% 2%
Table 9

two experiment groups is also identical.

4.1.4.2 Analysis of Subgroups by Product Category

As seen in the literature about eco-friendly products, the product category influences the

willingness to pay a premium. We assume it to hold for carbon-neutral products as well. To

prove this assumption, we needed to test the respondents’ behavior for each group

independently. We ensured this as no respondent saw both product categories, potentially

biasing her. Comparing the estimates for the coefficients proved this assumption as several

values differ in their orientation, e.g., “ageAbove55” and “NEP”. However, a closer look
41

indicated that those values were not significant in the clothing scenario, which is why the

finding was not relevant.

Table 10

The higher adjusted R-squared of the individual models (0.1731 and 0.1824 compared to

0.148) could also demonstrate the better fit of the individuals compared to the summarizing

model. When considering the significance of the different estimates, one could believe that the

summarizing model was a better option since there were fewer significant variables in the

clothing scenario (table 9). On the contrary, the estimates in the sleep product scenario were the

most robust as the majority was significant at a level of below 10%. In this case, there were two

variables at a 10%-level, five at a 5%-level, one at a 1%-level, and one at a 0.1% level.

These varying significance levels could indicate possible interaction effects between the

product category variable and the estimates that were significant in the sleep product only

scenario but not in the clothing or overall scenario. Nevertheless, we cannot infer any further
42

findings due to the small sample size. Nonetheless, it might be interesting to analyze possible

interaction effects with a bigger sample size in the future.

Since the respondent showed a different WTP for each product category, the variance of the

WTP within a product category was subsequentially lower. Therefore, the new model seemed

to have a better fit, but it only explained more similar data.

Dividing the sample data into two groups according to the product category might show that

the differences were due to varying interaction effects and not necessarily because of the

influence of the product category. Yet, as mentioned above, given the small number of

observations, we did not divide the sample, and thus our findings supported Hypothesis 1. We

further discussed the resulting implications later. To include more variables, we continued to

use a model that included both product categories. Thus, the formula RWTPOLS for predicting

the customer’s RWTP remained unchanged.

4.1.4.3 Analysis of Subgroups by Price Category

Table 11
43

Since we presented two different scenarios to the respondent, it might be sensible to examine

whether different factors influence the RWTP in the low-price and high-price scenarios.

Substantially, it might be reasonable to divide the sample according to the price. To evaluate

this division, we used the linear regressions shown in table 10. The similar orientation of the

estimates, except for one variable, could be an indicator not to divide the model. Also, the

significance of these estimates deteriorated in the individual models compared to the base case

(table 10). Thus, these findings already indicated that it was better not to divide the model. As

the adjusted R-squared of the base case was higher than in the individual models (0.148

compared to 0.09 and 0.13), the model that included a dummy variable for the price proved to

have a better fit as the other explaining factors did not vary based on the price. The higher

significance of some variables in the low-priced scenario could possibly indicate interaction

effects.

However, the sample size was too small to conduct any further conclusions from this.

Since we could certainly assume that the price level fitted well in both regression functions and

had no impact on the other explaining factors, it clarified why the adjusted R-squared declined.

Separating the sample into high-price and low-price decreased the sample size, on which the

regression relied. Consequentially, the variance increased while the degrees of freedom

declined, making the statistical model have smaller predictive power. Therefore, the base case

could estimate the RWTP more accurately.

Concluding, it was better to include the price as a dummy variable than to distinguish between

the two scenarios, also because the sample size would further decrease. Nevertheless, the price

was a significant indicator at a 0.1% level. Hence, it impacted the RWTP of the respondents.

Compared to the base case of a low price, the RWTP of the respondents in the high-price

scenario was 2 pp lower.

Hence, we concluded that the regression model for RWTPOLS continues to include every price

category and is not divided into two separate formulas.

44

4.1.5 Analysis of Non-linear Relations

As already explained, “NEP” 180 9%

160 8%
could have a non-linear 140 7%
120 6%
influence on the model. A 100 5%
80 4%
60 3%
graphical illustration of
40 2%
20 1%
“NEP” (figure 4) and the
0 0%
0 1 2 3 4 5 6 7 8
corresponding averaged
numbers of observations weighted average of RWTP
RWTP values could indicate Figure 4

a possible cubic relationship between these two. We assumed a potential cubic relationship, so

“NEP” to the power of three, to highlight low and high values of the NEP. The RWTP for the

observations for “NEP” equaling one or two are not further examined due to the low amount

respondents indicating them.

A statistical analysis of the sleep product experiment demonstrated no significant differences.

Both functions similarly fitted the model with an adjusted R-squared of 0.1775 for the linear

model and 0.1765 for the cubic model (Annex C). Although the linear model had a slightly

better fit, its coefficients were marginally less significant. Including “NEP” and cubic “NEP”

simultaneously led to inferior results in the fit (with an adjusted R-squared of 0.1747) and the

significance (only nine significant coefficients instead of ten). As introducing a variable to the

power of three in a regression could strongly affect its results, and the analysis did not show

any difference between a linear or cubic influence, we continued with the original linear model

for RWTPOLS.

4.1.6 Potential Consolidation of Variables

The previous chapter outlined the advantages of choosing dummy variables for age, income,

and education. Even though the dummy variables relied on thorough reflection about the

appropriate ranges, this did not require them to be relevant in this case. Therefore, we controlled
45

for the possibility that two adjacent dummy variables are similar enough to be treated equally.

Suppose two dummy variables behaved similarly, e.g., assuming that people with a bachelor's

degree and master's degree would be identical. In that case, they should be consolidated for the

sake of the regression because it reduces the number of dummy variables so that the regression

function is more concise with more degrees of freedom.

Furthermore, merging two dummy variables increased the number of responses for this group,

reducing the internal variance within this group and increasing the estimate's statistical

significance. Nevertheless, omitting one of the dummy variables without a sufficient similarity

between them might decrease the predictive power of the regression. Therefore, the

consolidation of two dummy variables is very delicate and should not be done without thorough

consideration.

With respect to that, we could not merge any dummy variables with confidence in the two

regression functions for the luxury and the necessity products since there was no sufficient

similarity that was consistent across both product categories.

For the clothing products, it seemed reasonable to merge the age groups “age35to44” and

“age45to54”, as their estimates only varied by 0.7pp. However, one of the estimates had a

higher statistical significance, and this similarity was not consistent within the sleep products.

It further appeared to be logical to merge all respondents with a bachelor's and a master's degree,

as their estimates were almost identical for luxury products. In contrast, a difference of 1.5pp

appeared in the estimates for the necessity products, while both estimates were very significant.

Finally, we considered consolidating the income groups from €60,000 to €80,000 and €80,000

to €100,000. As before, merging seemed appropriate for clothing products but not for sleep

products due to a difference in variables’ estimates of 4.4pp for the sleep products. As a

consequence, no variables were merged, leaving the regression model RWTPOLS unchanged.

4.1.7 Evaluation of Respondents' Demographics and Attitude

46

To address Hypothesis 2, we could not directly

confirm predictions about the influence of gender

since its estimate was not significant. However, the

coefficient’s estimate indicated a possible higher

RWTP of females by 0.7pp than the one of males

(table 11).

The orientation of the categorical estimates for age

also supported our expectations. Since the base

case addressed people younger than or equal to 24

and all estimates had a negative orientation, the

RWTP of older people seemed lower.

Furthermore, there was a declining trend

observable in the RWTP with increasing age.

Nonetheless, “age35to44” was the only coefficient

Table 12

significantly different from our base case (“ageBelow25”), which is why we could not certainly
Figure 5Table 13
confirm the influence of age on the RWTP.

Regarding the categorical variables for education, all estimates except “degMittlereReife” had

a negative orientation. Therefore, the assumption that education impacts the RWTP might be

confirmed because the base case considered people with a doctoral or a higher degree, so the

other categorical variables indicated a lower RWTP. We would consider “degMittlereReife” to

be an outlier due to the high p-value (0.563). This value could indicate that “degMittlereReife”

and our base case behaved similarly. Although, it must be said that few people within our

sample belonged to “degMittlereReife”, decreasing the estimate’s meaningfulness. However,

we could not discover any declining trend within the variables at first sight, and also only three

out of five variables were significant to some extent, making it hard to draw certain conclusions.
47

As respondents that are currently pursuing a degree might have been confused whether to

indicate the degree they are pursuing or the last degree they completed, deviations in the

expected estimate trend could occur, e.g., some bachelor students could have indicated

"degHighSchool," although they belonged to the category "degBachelor." Nevertheless, the

overall trend could suggest that the higher the education, the higher the RWTP.

Within the categorical variables for income, only “incAbove100” was significant. All estimates,

except “inc80to99”, had a positive prefix. Since the base case considered people with an income

below twenty thousand euros, one could assume that higher income leads to a higher RWTP,

which was also observable in the estimates for the different categorical variables, ignoring the

possible outlier “inc80to99”. For instance, the RWTP of respondents with an income over 100

thousand euros was on average 8.6pp higher. Although income seemed to impact the RWTP, it

could not be fully proven due to the low significance of the variables. Therefore, we could not

conclude any specific findings.

Further, we performed an ANOVA analysis with a Bonferroni posthoc adjustment method to

test whether the subgroups are statistically different from each other. Hence, we rejected the

Null hypothesis that the subgroups of age, income and education respectively are identical when

the p-values are statistically significant. The ANOVA posthoc comparisons (Annex D) allowed

us to develop the following conclusions.

The income and education groups were not statistically different within each other; i.e., one

cannot certainly say that a particular income or education group behaved statistically different

from another income or education group. Among the age groups, some were statistically distinct

from each other. More specifically, one could regard the groups “age35to44” and

“ageAbove55” years old as different from each other at a 5% alpha level. The groups

“ageAbove55” and “ageBelow25” were different at a 10% significance level. These findings

that age, income, and education were not distinct from each other again confirmed the analysis

from the OLS regression.

48

The dummy variable concerning children was not significant and also seemed to have a small

impact. Compared to respondents with children, childless people's RWTP was on average 0.8pp

lower. Bearing in mind that only a few respondents had children, the meaningfulness of this

variable is not relevant.

As the different groups for income and education were not different from each other from a

statistical perspective, we excluded them from our regression formulas. This means:

WTPlogistic (y/n) = 0.576 - 0.158 x age35to44 – 0.133 x ageAbove55 + 0.063 x

effectiveness

RWTPTobit = 0.0038 x NEP - 0.0256 x age35to44 + 0.013 x effectiveness – 0.02

priceHigh, with 0 ≤ RWTP ≤ 0.3

RWTPOLS = (-0.021) x age35to44 + 0.011 x effectiveness – 0.02 priceHigh + 0,015 x

prodMattress

All in all, we could not directly confirm the relevant demographics found in the literature and

their impact on the RWTP. However, the analysis indicated a possible trend that proved

Hypothesis 2.

Hypothesis 3 concerned the impact of the environmental attitude on the RWTP. Looking at the

estimates for the “NEP” coefficient, one could find that it was almost marginally significant at

a 10% level. Per additional “NEP”-point, the respondents' RWTP was on average 0.5pp higher.

Data suggests that we could not confirm Hypothesis 3, even though we almost accepted it at a

10%- significance level. A firmer belief in the effectiveness of the CNC probably also led to a

higher RWTP because people were on average willing to pay 1.3pp more per point increase in

“effectiveness”, confirming Hypothesis 5. Lastly, we could not accept Hypothesis 4 due to the

insignificance of the coefficient’s estimate. So, as already expected, the perceived

greenwashing of a CNC did not seem to influence the RWTP.

49

4.1.8 Analysis of Relative Willingness to Pay Distribution

Distribution of Respondents' RWTP

35,0%

30,0%

25,0%
% Respondents

20,0%

15,0%

10,0%

5,0%

0,0%
0 1% 2,5% 5% 7,5% 10% 15% 20% 25% 30% 35%
RWTP
Mattrass-high Mattrass-low Clothing-high Clothing-low

Figure 5

When plotting the RWTP and the corresponding percentage of the number of respondents, one

could identify several peaks almost congruent throughout all graphs, as seen in figure 5. All

scenarios almost had identical starting points with a share of approximately 10% of respondents

who were not willing to pay a premium for carbon compensated products. In the following

course, the two low-price scenarios almost identically proceeded, with peak points at an RWTP

of 5%. Around 21% of the sleep product test group and slightly over 25% of the clothing test

group were willing to compensate this amount. Another peak existed at an RWTP of 10%, with

almost 30% of the sleep product test group and 25% of the clothing test group willing to

compensate. Although the high-priced items exhibited the same peaks at an RWTP of 5% and

10%, they did not show many other similarities.

Comparing the price scenarios to each other, one noticed that the first peak in the high-price

scenario happened earlier. Around 30% of the respondents from the clothing test group stated

an RWTP of 2.5%. Although 20% of the sleep product test group revealed the same RWTP,
50

slightly more people were willing to pay around 5% of the product price. While the second peak

was still noticeable at 10% (similar to the low-price scenario), it is not as distinct as only 15%

of the sleep product test group, and 10% of the clothing product test group stated this RWTP.

This could be explained by the fact that 10% represented in absolute terms a significantly lower

monetary value for the low-price scenario than in the other one. This finding was congruent

with the high statistical significance of the product price to predict the RWTP and thus further

supports Hypothesis 6. Additionally, only a few people stated an RWTP over 15%, and one

could not discover any consistent trend or distinct characteristics after the 15% threshold. Since

only a few people indicated an RWTP higher than 15%, any observed trend would not be

relevant. Consequentially, having more observations of people with an RWTP over 15% might

have possibly revealed a trend. Furthermore, it is interesting to observe that in each price

scenario, more people from the clothing product test group were willing to compensate amounts

lower than 7.5%. Afterward, more respondents from the sleep product test group were willing

to pay the price premium than from the clothing test group. The two indicated peaks across all

distributions could resemble imaginary pillars that people tend to choose subconsciously. Those

points exemplify "even" values, which refer to €1-steps, as shown in figure 5, portraying the

relationship of the absolute WTP and the percentage of people willing to pay.

4.2 Qualitative Findings

As already mentioned, we aimed to achieve a second perspective of our quantitative findings

from experienced companies. However, the companies could not provide us with their

observations of the customer demographics for privacy reasons but offered us insights about

their motivating factors to (not) introduce a CNC.

51

4.2.1 Origin of the Motivation for the Climate Neutral Checkout

The motivations to (not) introduce the CNC differed among the companies. According to their

managing director Philipp Burgtorf, Emma prefers to optimize for conversions, which is why

they want to keep their checkout process as short and straightforward as possible. That is also

a reason why they only introduce something new after thoroughly testing it. He further

elaborated that Emma does not focus on the customer lifetime value since their products

(mattresses) are replaced after ten years, at the earliest. Moreover, he stated that Emma focusses

on highly profitable business cases and tries to perfect their operations, which is why they do

not want to initiate new strategies and test them, but instead be a “fast follower” and adopt

proven best practices.

Similar to Emma, Formel Skin does not want to "scare" their customers and make them "have

a bad feeling [after purchasing]" by raising the topic of adverse environmental effects. Also,

customers do not directly relate carbon emissions to Formel Skin's products, which makes a

CNC less relevant for them, argued Anton Kononov (Founder of Formel Skin). Hence, he stated

that they would focus their sustainability strategy to “reduce and compensate for plastic”

instead, as this constitutes the most polluting part of their product, as perceived by the customer.

On the contrary, Zalando has already introduced a CNC. After a strategic shift within the

company, promoting sustainability, among other things, Zalando wanted to become more

sustainable and educate its customers more on this topic. One approach for that is to offer the

customer the possibility to offset the transportation and packaging of the purchase. However,

they have a solid ideological motive behind the CNC and want to focus on reducing their

emissions first before burdening the customer with it. Accordingly, Julien Slijan stated that he

is in "unease with the whole offsetting" because he believed the CNC to be the last step

("offsetting is a good mitigation effect, but it is not the end game"). Therefore, Zalando wants
52

to internally reduce its emissions first (which they are currently trying) before they offer a CNC

that also offsets the emissions of the products themselves.

4.2.2 Product Characteristics Beneficial to Adopting the Climate Neutral Checkout

Concerning product characteristics that drive or restrict the adoption of a CNC, one interesting

factor is whether the product is second-hand or recycled. As opposed to what we found for

Emma, in the case of Zalando, second-hand is a desirable trait that sparks customer interest,

indicating that customers do not worry about it already being used or a potential quality loss.

Emma, on the other hand, once introduced an experiment on their website where they showed

two identical mattresses but labeled one to be sourced from recycled materials. Thereupon,

there was a decreased demand as compared to the non-recycled product version for the mattress.

Reasons for this, according to in-depth customer interviews, were that customers regarded the

recycled mattress as being already used and thus "being dirtier."

4.2.3 Limiting factors of the Climate Neutral Checkout Adoption

4.2.3.1. Sustainability is of no primary concern for the customer.

By engaging in meticulous market research in the forms of in-depth interviews, empiric

research, and focus groups, Emma is able to maintain a good customer understanding. As a

result, they can tell that their customers value sustainability aspects when purchasing mattresses

online, but they ranked their importance 12th out of 20 factors. The same can be said for

Zalando, which found in their attitude-behavior gap report that sustainability aspects ranked

eighth and ninth out of nine in terms of their influence on the buying decision.

What unites Emma, Formel Skin, and Zalando is that the customer frequents their online shop

with a purpose. So, when a customer visits Zalando, "they want something that fits, something

that they like and something that is in their price range – sustainability just comes after that."

Formel Skin reported the exact root cause in their written statement, stating that "for brands that

are designed to solve a problem, sustainability is a rather secondary purchasing factor. The
53

primary focus is that the product works." What further aggravates this issue is the underlying

problem that "the customer does not understand sustainability," according to Zalando.

4.2.3.2 Sustainability is incompatible with the traditional concept of online stores.

The interview with Emma revealed their motivation to increase their checkout conversion rate

by continuously improving the website by cross-testing different designs. During this, they

found that the most uncomplicated checkout process had the lowest churn rates, so they ignored

functions known from other online shops like "other customers also bought" or something

comparable. Based on this finding, Emma was reluctant to introduce the opportunity for a CNC

with the argument "[their customers] want to purchase the mattress and just get it over with."

Juxtaposing, Zalando, which is aware of this A/B testing optimization ideology, wanted to

redesign the checkout process. The issue they faced is that "the customer has no understanding

what sustainability in fashion means," and traditional online shops speak a "broken language."

Therefore, they recognized that a traditional e-commerce online shop "is designed to have a lot

of [product] choice and optimized for transaction conversions– it is not optimized for a learning

experience." This statement was further supported by the interview with Formel Skin that

outlined that a CNC might resonate better with the customer; the more obvious it is that the

product emits carbon associated with its production and usage.

4.2.3.3 Moral considerations associated with customer manipulation through sustainability

labels.

As stated by Zalando, labels convey the problem that customers are not able to understand them

and compare them to each other. Therefore, many companies currently turn to labels, and thus

"customers trust that the company is environmentally responsible." Despite that, customers still

cannot fathom the implications a specific label has for the production process. Since this can be

easily misused to manipulate a customer into regarding the company as environmentally

responsible, Zalando is trying to break these labels down into what they call "impact areas."
54

This means they want to outline to the customer in what way a particular label supports workers,

reduces water consumption, or affects other areas.

4.2.4 Effects of Introducing a Climate Neutral Checkout

After the introduction of the CNC, it is difficult to draw further conclusions about the customer

who uses the CNC or possible behavior changes within the customer. Zalando values the

privacy of their customers a lot because they feel responsible towards them. As Julien Slijan

stated, their customers are very sensitive about data processing and might lose their trust in

Zalando when they discover that Zalando uses the customer's data for their benefit. While Julien

Slijan indicated that differences in the customer's awareness of sustainability exist depending

on the customer’s country of origin, he could not specify this further or provide insights on

demographical influences. This is a result of privacy regulations that prohibit Zalando from

collecting further data about demographic or similar information on the customer, limiting a

possible analysis. Nevertheless, they track the customer "Sustainability"-journey on their

website and evaluate the recurrence of more sustainable behavior of a given customer. Julien

Slijan mentioned that this represents a success measure for his team.

Besides tracking the Sustainability journey of the customer, Zalando did not conduct any further

research on the customer behavior yet. Therefore, they also have not studied the change in the

customer behavior in the context of carbon offsetting as Zalando wants to put their focus more

on the underlying problems presented in the attitude-behavior gap report, which we will

elaborate on later. However, Julien Slijan was interested in a potential analysis of the customer

behavior before and after the introduction of the CNC.

In line with the conducted survey, Zalando’s customers had differing opinions about

greenwashing. While most customers did not criticize Zalando for potentially greenwashing

their image, the media was more skeptical.

55

5 Discussion

We have gained qualitative insights into the companies’ motivation to introduce a Climate

Neutral Checkout (CNC), while the quantitative findings helped us to understand the

characteristics and motivators of a person who uses the CNC.

However, these findings are highly theoretical, which is why we need to discuss the findings’

applicability in practice. Reviewing the implications of these findings for firms and reflecting

on their interpretation can result in meaningful learnings and guidelines for the introduction of

the CNC.

5.1 Implications for the Customer

We believe that both the share of people that are willing to pay for the CNC and the price

premium that the people are willing to pay might be lower in a field experiment compared to

the indications in the survey. Based on this potential overstatement of the willingness to pay

(WTP) for sustainability, we need to set our findings into perspective. Nevertheless, we believe

that the conclusions we drew about customer behavior and the influence of customer

characteristics on the WTP are generally applicable. Although the WTP might be overstated,

we assume that this overstatement applies to all respondents alike, and thus we expect the

patterns in the customer behavior to be still congruent to our findings.

The categorical overstatement of the WTP is what Zalando prominently covers in their

"Attitude-Behavior Gap Report 2019" (Zalando SE, 2019). As Julien Slijan mentioned, there is

a considerable gap between the stated customer attitude and their subsequent behavior, in the

following referred to as attitude-behavior gap (ABG). The ABG indicates that findings

generated within a hypothetical environment, e.g., surveys, do not necessarily transfer to

realistic environments like one would perceive them in field experiments or actual shopping

behavior. Hence, the gap represents a severe divergence between what customers claim to be

vital in their decision-making compared to what drives their behavior in reality. This divergence
56

is as high as 66% in the case of transparency issues and 50% in ethical labor policies. As further

outlined in Zalando's attitude-behavior gap report (p. 18), while customers say they value

sustainability, these factors are secondary to financial incentives (receiving a discount, a low

price) and style choices (the customer demands variety in her clothes).

Figure 6: Model portraying consumer behavior towards carbon compensation (adopted from Aryal et al. (2009) and Laroche
et al. (2001))

As shown in figure 6, consumer behavior is subject to several partly interconnected influences

that could be accounted for in the theoretical experiment but cause a high variation in real-life

observations2. Due to its high complexity, this model helps to predict the customer's revealed

willingness to pay more accurately than relying on the customer's stated willingness to pay,

which is subject to the ABG. The two main contributors to the ABG are 1) a categorical

overstatement of the WTP and, conversely, 2) an increased ad-hoc willingness to pay.

As opposed to the overstatement of the customer’s WTP, we assume a simultaneous

understatement of the CNC when a customer is asked in interviews. In particular, we came to

believe that the customer's ad-hoc willingness to pay, when presented the possibility to

compensate, might exceed the level that companies predict. This was revealed when comparing

the findings from the interview with Emma as compared to the survey results. Philipp Burgtorf,

who claimed that Emma has a good customer understanding, argued there would be no

2
Dotted lines indicate rejected hypotheses
57

customer demand for a CNC on their website. However, the survey data showed that about 90%

of the respondents would be willing to pay a premium for a climate-neutral mattress. This

positive resonance, when presented with a CNC, is substantial, even after accounting for the

fact that the sample of online shoppers in our survey might differ from the sample of online

shoppers who buy at Emma. We assume this discrepancy to result from a lack of awareness

from the customer's perspective. While the customer might not state that she wants a CNC when

asked for improvements on the website, she might actually like it upon its introduction and

choose ad-hoc to compensate the product emissions. As Davies et al. (1995) defined the

segments we believe a pale green customer to have an increased ad-hoc WTP as she wants to

purchase eco-friendly products when she sees them. The dark green and the armchair customer

are not expected to have an increased ad-hoc WTP. It might be further supported by “inaction

guilt” (Dahl et al., 2005), which states that a customer engages in altruistic behavior to avoid a

feeling of guilt

On top of this lack of awareness, many customers (50% in the fashion industry) do not know

what sustainability means with respect to online shopping. Anton Kononov again supported

this theory when he supposed that their customers might be aware that their products create

plastic waste but do not connect this to subsequent carbon emissions. Thus, we conclude that

the customer is neither fully aware of sustainability nor does she understand this topic to a

sufficient degree, which was already outlined in 1990 by Simmons and Widmar.

Given that customers showed no progress with respect to noticing and understanding

sustainability over the past 30 years, it becomes evident that the customer needs to actively "be

taught sustainability". According to what Zalando's consumers indicated, they see that the

responsibility for this education on sustainability in online shops should be on the online

platforms, the brands, and the vendors (Zalando SE, 2019).

58

Thus, if the customer's comprehension on the topics of sustainability is to be increased,

companies ought to take a guiding role that compasses how to behave while shopping online

responsibly.

However, it is necessary for firms first to understand the current customers who already show

eco-friendly behavior and also what drives them to be willing to pay more to compensate for

the CO2 emissions.

We could not conclude any specific findings of the demographic that influence the willingness

to pay a price premium to compensate for the product's emissions. This finding is in line with

our literature research, which included conflicting results about its influence on the willingness

to pay a price premium for eco-friendly products.

Nevertheless, our research indicated specific possible trends that are consistent with the work

of most of the researchers. Additionally, it might be interesting further to evaluate the

coefficient “age” as a predictor. The differing age might represent a new mindset which

currently evolves in younger generations. Therefore, one would assume that age rather concerns

the year a person was born. Consequentially, the age itself of the person would not matter, but

the year the person was born. So, the person’s surroundings and upbringing influence the WTP

instead of the age. Consequentially, one could assume that people who are of a younger age

today will still care about the environment when they are older. Thus, their WTP would still be

similar to when they were younger. This theory implies that one should consider the year a

study was published as well to evaluate the influence of “age”. Furthermore, it might be

interesting to see whether new generations, who are considered to be more eco-friendly, will

change their attitude as they become older, making age a meaningful predictor.

Regarding consumer's attitudes, our findings are coherent with those concluded about the WTP

of eco-friendly products and also prove it to be a better predictor than the demographics (Tsen

et al., 2006). While the New Environmental Paradigm (NEP) is just not marginally significant

anymore (p-value of 0.1009), the perceived effectiveness is a significant indicator. The missing
59

significance of the NEP compared to other researchers' findings could result from potential

biases in the survey design or the fact that we shortened the NEP not to elongate the survey. As

people first stated their WTP to compensate the CO2 emissions, they subconsciously could have

thought of themselves as more environmentally conscious because they just did a good deed

for the environment. However, as explained in 2.2 – Moral Licensing and Warm Glow,

somebody already receives this warm-glow about herself after a small beneficial act.

Consequentially, the contribution to compensate the CO2 emissions could bias people and lead

them to overstate their genuine attitude towards the environment.

We further need to emphasize the importance of “effectiveness” for a company's operation as

it is an outstanding, influential factor in our analysis and also mentioned by several studies.

Therefore, companies must respect the communication of the CNC to highlight its

effectiveness, though we will discuss this more in detail later. As low “effectiveness” is the

primary driver not to pay a premium, companies should listen to their customers to examine

why they think that a CNC is not effective. Gupta and Odgen (2006) also exemplify the need

for perceived effectiveness well. With increasing effectiveness, the customer's involvement

develops from accidentally buying green products towards being actively in purchasing those

eco-friendly products.

With respect to the distribution of the relative willingness to pay (RWTP), the majority of the

people engage in the usage of a CNC. Especially the perceived effectiveness influences whether

people will pay a premium or not, as shown in the logistic analysis. Further, we could identify

three different peaks: people who are not willing to pay, people with an RWTP of 5%, and

people with an RWTP of circa 10%. Zalando categorizes their consumers into "the unaware"

(the clueless), "the apathetic" (who shows a negative attitude towards whatever action Zalando

undertakes), "the skeptical" (who does not trust the sustainable actions of Zalando fully), and

the "engaged" (who shows a positive attitude towards Zalando’s initiatives). However, these

segments are not suited to describe the three customer segments apparent in our data. So, we
60

define these customer segments as the “disengaged” who do not pay, the “mildly concerned”,

and the “ideologist”. An analysis of the demographics of these respective groups could provide

valuable insights for firms to gain ideas about how to implement a CNC. Nevertheless, our

demographic variables were not sufficiently significant to draw any further conclusions about

their deviations across the different segments.

After analyzing their customers more in-depth, firms could assess whether their target groups

cover the mentioned segments and what share of their customer base each segment constitutes.

In the case that their customers seem to be engaged in sustainability, the introduction of a CNC

could benefit the firm in terms of potential warm-glow effects and improve customer feedback.

The regression function that includes all statistically significant variables serves this purpose

well, yet the only significant variables from the logistic model were the intercept and

“effectiveness” (the other variables were not different from each other as found out by the

posthoc pairwise test). As we already saw tendencies in our data that are coherent with the

existing research body, more observations could help create an improved logistic model.

Companies can use this model to assess whether to introduce a CNC or not, depending on their

customer demographics.

5.2 Implications for the Company

As a next step, firms could examine whether their product groups are suited for a CNC. The

CNC might be of particular interest to firms with an online shop that provides high cross-selling

or bulk-purchasing potential. Following a Moral Credits model, the customer needs to engage

in altruistic actions like compensating carbon emissions in order to regain Moral Credits that

support the customer in purchasing other products. Thus, gaining Moral Credits might influence

the customer to purchase more products, benefitting the firm economically. Clearly, in the

scenario of the sleep products, these cross-selling opportunities are rarely given. The implied

worse fit of the sleep products is also coherent to other studies that show that customers are
61

willing to pay a higher price premium for frequently bought products, a category in which a

mattress or a pillow does not belong.

However, in reality, it is hard to define which product categories or prices are more suited for

a CNC, as our experiment showed. According to our analysis, product and price only influenced

the amount of money that the people are willing to pay but did not determine whether a customer

is willing to pay at all. Hence, the decision to compensate relies solely on the person's attitude

and is eventually influenced by her characteristics. As mentioned in our experiments, the RWTP

decreased for both product categories with an increasing price. Nevertheless, the RWTP did

not decrease for both products by the same degree. Precisely, the customers of sleep products

show a higher WTP, even when purchasing higher-priced items.

Nonetheless, this finding could also be the result of a biasing survey design. We hypothesize

that the formulation of purchasing two t-shirts and one pair of jeans might be too intangible and

too hard to picture for the participant. Therefore, the questions are much more theoretical than

in the case of only one pullover, so the customer can put herself better into the position of

buying this article in practice. Avoiding this bias might result in a too-long survey, which people

are reluctant to fill out entirely. Hence, the problem remains that it is hard to find an expensive

piece of clothing that fulfills the criteria. When choosing a single expensive item like a coat, it

might be that some of the respondents do not consider the coat as a luxury item but rather

something necessary. Furthermore, the definition of what is a luxury and what a necessity

product is rather personal.

Despite a potentially biased survey design, a selection bias could also explain this gap in the

WTP across product categories. Customers that show a higher level of environmental

responsibility, and that would consequently be willing to pay more for the CNC, might not react

to the example of buying two shirts and one pair of jeans as they would not engage in such a

big purchase but just buy what they “need”. Moreover, as Julien Slijan stated, consumers

probably do not yet differentiate consciously among different product categories, i.e., they
62

might not consider if they buy a product for their own pleasure or because they need it when

deciding whether to use the CNC. The primary focus on the functionality of the product further

explains her missing reflection, as Julien Slijan explained, “[the customer] want[s] something

that fits, something that they like and something that is in their price range – sustainability just

comes after that." Therefore, it is still too early to differentiate between product categories.

Nevertheless, one can already observe a trend that the CNC is more relevant for companies that

offer luxury products, e.g., clothing (Zalando) and electronics (eBay, Digitec Galaxus), as those

are the ones who started introducing it. Thus, even though research does not necessarily support

it, companies pioneer the CNC in these product categories and thus seem to make this

distinction for themselves.

To conclude, products or services that are known to emit much carbon (transport, electricity)

or receive a lot of media attention (clothing), which makes people aware of the products'

emissions, are most suited for the CNC.

Regarding companies with products which emissions are not evident at first sight, it is essential

to create an understanding of the carbon emissions and the CNC first. For instance, Philipp

Burgtorf from Emma only talked about the customer's unfavorable attitude towards recycled

products, using it as a red flag for how she would engage in or react to a CNC. However, a CNC

might, in fact, benefit Emma since they currently cannot make their mattresses more sustainable

by changing the ingredients as this would make the product seem "dirty". This marks a

fundamental change when compared to other products like organic vegetables. Upon farming

and harvesting them, the farmer needs to make a conscious decision whether this product will

be an organic vegetable or not. With a CNC, though, the production decision is entirely

decoupled from the carbon intensity of a product.

Therefore, the underlying problem is that companies do not necessarily understand that "climate

neutrality" is not a product category, which the customer has to search for actively, and the

company needs to implement effortfully. It is rather an option that the customer can choose
63

from on the website. Julien Slijan from Zalando further supports this finding as he mentions

that "the customer has the fear to miss out on the great stuff when [Zalando] would filter out

the 'unsustainable' products". With a CNC, the customer can still see every product. However,

Philipp Burgtorf from Emma is correct in worrying about keeping the check-out process as lean

as possible, so implementing a CNC could lead to a higher churn rate in the check-out process.

Despite that, mentioning the negative environmental impacts of products altogether might repel

customers. According to the sustainability report about the Attitude-Behavior Gap from

Zalando, the most common word associated with sustainable fashion was "guilty", while the

least common was "fun". This implies that consumers often take sustainability as a burden they

are unable to carry. Acquainting the customer with the negative impact of her purchase could

either encourage her to leave the online shop (and hence prevent them from purchasing

anything) or switch to a different shop to avoid the confrontation with the adverse climate

impacts of the purchase.

Coherent to the already described attitudes, we can easily classify Zalando and Emma according

to the three company types, conventional, responsible, and essential (Jeronimo Silvestre et al.,

2018). While Emma is a “conventional” company in terms of sustainability because it "assumes

the paradigm of profit as its central reference" and acts as a second-mover, only meeting the

essential customer requirements, Zalando is an "essential" sustainable enterprise. They

implemented sustainability as part of their primary strategic orientation after the strategic shift

they undertook, striving to minimize their footprint and environmental impact. Comparing the

ranked importance of sustainability for Zalando’s customer to the one for Emma’s customer

also provides further support for the differing categorization. Although Zalando's and Emma's

customers similarly evaluated the influence of sustainability for their purchasing decision (8th

and 12th respectively), only Zalando introduced a CNC. This shows that the importance of

sustainability aspects to the customer is not the main driver of Zalando implementing
64

sustainability at the core of its strategy. However, sustainability will probably never reach high

scores in terms of its importance for products "that are designed to solve a problem", as

customers will always want the solution of their problem first. So, one could regard

sustainability in a product as a “motivator”, similar to what Herzberg (1959) defines for

workplace motivation. This is not expected to change in the future, and hence, sustainability

will not become a core product characteristic but a clear differentiator for companies.

To further understand why Zalando implemented the CNC nonetheless, one needs to understand

their ideological solid motive concerning sustainability since they want to educate the customer

on sustainability and offer more options to be sustainable to her. As part of their aforementioned

strategic shift, they want to focus on reducing emissions first before burdening the customer

with it. Their mindset is to "not put something on the customer" that is, in fact, "their own

responsibility". Therefore, they only offer a CNC that addresses the logistics and packaging as

it is too complicated to reduce emissions in that area. This leads to interesting implications

concerning the introduction of the CNC: companies might have to internalize sustainable

thinking first before they can introduce a CNC onto their website and burden the customer with

the "guilt" and responsibility.

Regarding future developments, companies probably will have to implement sustainable

measures to stay in competition. So, the previous importance of making a profit for companies

could in the future also include a desire to make an impact. As current younger generations,

who value sustainability, will shape and educate the generations after them, future customers

will increasingly demand sustainable products.

5.3 Implementation of the Climate Neutral Checkout

As Julien Slijan suggested during the interview, the customer needs to understand sustainability

in online shops better. Yet, as he further mentioned, this contradicts the "broken language" of

online shops that were designed and optimized for maximum conversion rates. Thus, enabling
65

the customer to behave more environmentally sustainable in an online shop by showing

information boxes and the option of a CNC might compromise the conversion rate.

Once a company chooses to pursue the possibility for carbon compensation on their website, it

needs to determine in which way to include the carbon compensation in the checkout process.

One question in connection with the CNC is the selection of climate projects for carbon

compensation. These projects differ in costs based on their geographical location, certification

standard, issuance year, market supply and demand, and technology, i.e., reforestation,

renewable energy, community, or industrial innovation. The survey results showed that many

respondents were willing to compensate 10% of their purchase, which represented almost the

exact middle of the scale they were presented with to indicate their WTP. Even though these

respondents can be attributed to the segment of “ideologist”, we assume that it was not arbitrary

that this number was chosen. Instead, it might be that the customers, which presumably had

little to no experience of what price premium is suited for compensating carbon emissions, are

subject to consumer conformity (Khandelwal et al., 2018). In concrete terms, this means that

the consumer, absent better knowledge, chooses an option that she thinks many people will

choose – a premium not too high, but not too low, rather in the middle. Indicating what others

paid on average could manipulate the customer even further since it increases the effect of the

conformity bias.

This is also aligned with the theory underlying the warm-glow effect that states that a customer

is, among others, motivated to donate to charity in order to avoid contempt by their peers.

Another implication regarding the selection of carbon removal projects can be drawn from the

observation that the relative willingness to pay for more expensive purchases is lower.

Assuming that purchasing four shirts instead of one emits four times the carbon emissions

would imply that a customer is not willing to pay as much per ton of carbon dioxide equivalent

(tCO2e) as before. Thus, for higher-value purchases, cheaper carbon reduction projects should

be suggested, while for lower-priced purchases, more expensive projects can be supported.
66

In addition to internally deciding which projects to use, the customer journey needs to change

as well to make them feel more comfortable.

Zalando outlines in its report that around 82% of customers experienced a form of regret after

their online shopping process, while more than a quarter of this group had particular concerns

about the environment (Zalando SE, 2019). As customers further mention, "guilty" is the most

associated adjective with online shopping; this makes a case for the importance of relieving the

customer after the purchase. Stating the positive effects of the CNC in the post-checkout phase

might mitigate the concerned attitude of the customer.

Finally, it might be attractive for the company to introduce a reward scheme for sustainable

behavior. As outlined by Giebelhausen et al. (2020), charitable donations should be combined

with private benefit goods (rewards) to maximize the adoption of altruistic behavior while

controlling for the adverse effects. Zalando's findings again support this claim as 54% of

customers indicated that they would be motivated to purchase more sustainable fashion if

incentivized by rewards.

5.4 Ethical Considerations

Amidst all best practices for design and implementation, there is one fundamental topic casting

its shadow on the whole endeavor, and that is the perception of greenwashing. As indicated by

74% of the survey participants, a CNC could potentially be regarded as greenwashing3. The

good news is that customers are reasonable in assessing organizations' sustainability efforts.

They do not call for a sustainability strategy to be flawless, but above all, they want to trust the

company (Zalando SE, 2019). Customers want to accompany the organizations on their

sustainability journeys, so it is most important for companies to be forthcoming and not

exaggerate while quantifying their impact whenever possible. Quantifying the company’s

3
Share of respondents who indicated 4,5,6, or 7 for the variable “greenwashing”
67

sustainable actions helps the customer to comprehend whether a company uses the CNC for

greenwashing purposes or as a part of a holistic sustainability strategy.

Simultaneously, as the WWF recommends, a company should also disclose areas where their

initiatives are not that successful yet or where abating emissions is more difficult to achieve

(WWF, 2019).

Above all, the customer wants to be able to trust brands and know where brands are on their

sustainability journeys. To avoid the perception of greenwashing, brands should quantify their

impact wherever possible. Furthermore, it seems as if the consumers are still giving companies

the benefit of the doubt. Zalando supported this claim as they brought forward that they barely

received any negative feedback regarding greenwashing once they introduced the CNC. This is

aligned with the conclusions we drew from this thesis’ survey data.

We observed that a fair share agreed that carbon compensation would be greenwashing.

However, there was no indication that their WTP would be lower as a consequence of this. As

indicated by Hypothesis 4, we expected the WTP to decrease the more a customer perceives

the CNC as greenwashing. In the survey, the participant was first asked to state their WTP and

just after that indicate whether they perceive the CNC to be greenwashing. Therefore, we

hypothesize that the participant did not perceive this as greenwashing before she was asked, as

she was not actively thinking about greenwashing at this point. This would explain why there

is no influence of “greenwashing” on the WTP. Nonetheless, this finding could also be

applicable in reality since the online shops certainly do not address greenwashing on their

website.

Due to this benefit of the doubt that customers still seem to give companies when it comes to

greenwashing, adopting a sustainable strategy appears to be relatively straightforward.

Nevertheless, this naivety is what creates the possibility for organizations to engage in

greenwashing in the first place successfully. Companies can exploit the fact that customers can

already be manipulated into experiencing a warm-glow effect after a minor environmental

68

contribution (Giebelhausen, 2017). This finding is in line with the literature; as Trudel and Cotte

(2009) mentioned, the customer does not distinguish between a product that is 25% green and

one that is 100% green. Consequently, even though it is just the first step in a decarbonization

strategy, companies might be tempted to offset their emissions only partially as the customer

shows the same positive response as for offsetting the product emissions entirely.

The problem is that the customers might thus be deceived into believing the company would be

green while the few selected initiatives by far do not compensate for the adverse environmental

impact of the entire firm’s operations.

One fundamental issue with greenwashing is the lacking availability of data about the

companies' environmental impacts. Hence, this follows a phenomenon parallel to the effect of

warm-glow giving, i.e., that already a small contribution creates this warm-glow, regardless of

whether the amount of the donation is appropriate or not.

The vision behind the companies that offer carbon compensation schemes for their products is

that customers who purchase offset credits are relieved of their obligations towards mitigating

climate change impacts from their product purchases. As opposed to that, paying other people

to reduce emissions does not replace the fact that each individual is morally required to reduce

their own emissions (Hyams & Fawcett, 2013).

Concluding on the aforementioned points, there needs to be a hierarchy that prioritizes carbon

reductions over carbon offsetting (Hyams & Fawcett, 2013). Only when the options for

reducing emissions have been exhausted should the remainder be compensated to achieve a

transformation to a carbon-neutral future (WWF, 2019). Yet, if this dogma is not communicated

sufficiently, the ordinary customer will not be able to understand the shortcomings of a carbon

compensation absent a carbon reduction plan (Smith, 2007).

Additionally, Hyams and Fawcett (2013) elicit the importance of both, reductions and

offsetting, schemes (Hyams & Fawcett, 2013). They suppose that for the environment, not

emitting is better than emitting, while offsetting is better than not offset, and hence, the best
69

option would be to do both; not emitting and offsetting. Thus, he separates the question of

reducing emissions and offsetting emissions altogether (Hyams & Fawcett, 2013).

So far, we investigated to which extent the positive environmental effects of the CNC compare

to the non-product-related emissions of a company. In the following, we take one step back and

examine the positive effect of carbon compensation altogether. To this point, the CNC was

considered a tool that is able to drive the sustainability agenda of a firm in a legitimate way.

Nevertheless, there are critics like Kevin Anderson who condemn "offsetting [as] a dangerous

delaying technique because it helps us avoid tackling the task [of dealing with climate change]"

(Smith, 2007). Criticism is raised mainly on the fact that carbon offsetting firstly is a mean to

export moral responsibility and secondly is widely exploited for greenwashing. This was again

supported by what Julien Slijan mentioned, that Zalando aims at first reducing carbon emissions

as much as possible and regards a CNC just as a last resort.

First and foremost, one frequently raised ethical concern is that offsetting projects do not deliver

on their promises about reducing emissions (Hyams & Fawcett, 2013; Smith, 2007). Although

this is arguably the case for some questionable organizations, we assume the CNC to rely on

trustworthy offsetting providers.

Thus, assuming the effectiveness of the CNC in saving CO2, the question about its morality

(Bik Sia et al., 2013) remains. A satirical illustration of the ethical shortcomings of offsetting

schemes is the project "cheat neutral" by Beth Stratford. Even though the domain was taken

offline, there is a YouTube video showcasing the idea (GreenTV, 2012).

In essence, they argue that it is no problem to cheat on one's partner as long as this is offset by

a fee. This fee is forwarded to other faithful couples who, in turn, will not cheat on each other.

Thus, so they say, one can "neutralize the damages done to the relationship by preventing other

couples from cheating". (GreenTV, 2012) Of course, offsetting cheating and offsetting carbon

emissions does not function in the same way since the climate does not care who emits

emissions, yet the romantic partner does indeed care if their partner cheats on them or someone
70

else in the world cheats on their partner. Nevertheless, this example showcases very well that

moral responsibility is exported from the one which offsets to someone who gets paid. This

follows a purely consequentialist argumentation, which treats unethical behavior and

subsequent compensation equal to behaving ethically in the first place. Consequently, one

would be allowed to do everything, e.g., emit as many emissions as desired, as long as they are

compensating for it (Hyams & Fawcett, 2013). Zalando opposes this consequentialist

argumentation, as Julien Slijan mentioned that they consider carbon compensation the last

resort, which clearly indicates a moral judgment about offsetting.

Even though the idea of carbon offsets seems new, the concept of offsetting predates back to

the late middle ages. At that time, the Catholic Church issued indulgences that would forgive

the "sinner's" wrongdoings. The underlying idea was that the clergymen constantly engaged in

reputable actions while only “sinning” rarely, which means they effectively had an “excess of

good deeds”. What followed was the commercialization of the indulgences, selling them to

"sinners", who did not have the time or motivation to engage in good deeds themselves (Smith,

2007). This created what could be described as a warm-glow effect for those who bought the

indulgences. As a result, trading immoral behavior, be it carbon emissions or “sinning”, is said

to progress existing injustice through deteriorating an already unjust distribution. Therefore, the

wealthy can continue to emit high rates of carbon or respectively “commit sins”, at the expense

of the underprivileged (Hyams & Fawcett, 2013). This will yield the result that the dichotomy

between the rich and the poor among society will further be perpetuated (Smith, 2007).

Furthermore, through an emissions trading scheme, there is no moral incentive that influences

behavior towards more ecological behavior. When one is able to offset the emissions of flights,

this behavior is no longer condemned as irresponsible and anti-social. Instead, it becomes

morally neutral. Thus, people do not face this social pressure into reducing their emissions when

they simply engage in offsetting projects which will arguably not be enough to combat climate

change (Smith, 2007). This concern was confirmed by a survey of 1,600 environmental
71

management practitioners, of which 44% stated their concern that offsetting might distract civil

attention from decreasing our emission levels (Hyams & Fawcett, 2013). Unfortunately, we

could not confirm this given that our survey design could not distinguish between the

respondents who just did not want to compensate, whom Zalando calls the “unaware,” and those

who are against compensation altogether, whom Zalando calls “skeptical”.

Ultimately, the question remains whether a CNC constitutes greenwashing and the morality of

carbon compensation, in general, is yet to be concluded. However, a necessary first step is to

incorporate the reduction of carbon emissions into the company’s strategy first before

introducing a CNC, as is evident in the case of Zalando.

72

6 Conclusion
6.1 Limitations of our Research Approach

Above all, our findings of the relative willingness to pay (RWTP) are subject to deviations

between the theoretical and stated willingness to pay (WTP) since, in reality, many uncertain

factors influence an individual’s WTP. These deviations result from the theoretical nature of

our experiment. The theoretical design also prevents the respondent from imagining how she

would behave during an actual purchase because it is difficult to sufficiently describe such a

situation, leading to an incorrect representation of the RWTP. As the survey directly and only

presented information about the CNC, the respondent could not miss it. However, on a website,

it might be the case that the customer does not see the opportunity, or the customer is currently

overwhelmed by other variables influencing her shopping behavior. Consequentially, the effect

of the CNC might differ.

Additionally, the survey design itself was subject to different limitations as well. As we only

introduced two product categories, clothing, and sleep products, these might not accurately

represent the intended deviation into luxury and necessity for an individual. Thus, it might be

necessary to introduce several other product categories.

We further used a modified version of the New Environmental Paradigm (NEP) by shortening

it to four questions to avoid a lengthy survey. In a more advanced setting, we had to control

these questions to be a relevant predictor for the result of all twelve original questions

concerning the NEP. Also, the usage of broad ranges for age and income (which we used for

privacy reasons) might not portray the effect of those demographics accurately. Therefore,

letting the respondents state exactly their income and age might bring different results. Also,

the categorical variable for education might have confused the respondents since we asked them

to state the degree they are currently pursuing. Hence, in reality, people pursuing their
73

bachelor's degree instead put “degHighSchool” because it is the degree they last accomplished,

as already mentioned.

Even though we have no reason to believe that we left specific predictors of the WTP out of

consideration, there might be an omitted variable bias since predicting purchasing behavior is

very complex. For instance, there might be a difference in culture or origin of the respondents

that we did not account for as our respondents mostly had the same cultural background, which

we assumed due to conducting the survey in German.

The order of the questions concerning the WTP and the NEP could have introduced another

psychological bias, which influenced our results. Since we asked the respondent about her

environmental attitude, after she did something positive (i.e., paying a premium to compensate

for CO2 emissions), the respondent might think of herself as a more eco-friendly person and

answer the questions NEP differently. In general, it is challenging to avoid priming when asking

for the NEP, greenwashing, and WTP a price premium as asking for one of them might bias the

answer to the following ones.

Lastly, our sample especially included young students as most people from our surroundings

fall into this category. A more equally distributed sample could yield more insightful and

significant conclusions.

6.2 Future Research

We aimed to provide first insights about the motivation of the customer to pay a price premium

to compensate the purchased products CO2 emissions and the motivation of the firm to

introduce a CNC. Nevertheless, to make our research more applicable to daily business, one

needs to extend the research in different topics onto a real-life scenario.

As we only talked about the stated RWTP, a field experiment conducted by an online shop

would help to compare the stated RWTP to the revealed RWTP. These insights could provide

insights into the difference between these two WTP. From that, one can evaluate our experiment
74

to the real world and hence, the applicability of our findings. Furthermore, it is interesting to

see whether any systematic differences will occur, e.g., the theorized tendencies do not hold

anymore.

Additional experiments with different products, contrasting necessities, and luxuries allow us

to learn whether the difference between clothing and sleep products represents the intended

categories. Consequentially, we could exclude the effects of the product that are unrelated to

whether a product is seen as a luxury or necessity product, i.e., it might be that customers have

a different WTP for sleep products.

For similar reasons, one should conduct experiments with several price points instead of only a

high and a low one. This was not possible as the experiment, in this case, focused on the

marginal impact of the product category on RWTP, keeping everything else constant. Hence,

we could only introduce two different price points. With further research that would include

various price points, one could observe a more accurate distribution of the RWTP. A real-life

scenario would facilitate incorporating many price points since there is a wide variety in the

potential basket sizes of purchases.

Correspondingly, one can assess the RWTP more accurately by changing how the customer

(respondent) indicates the absolute WTP. Our experiment design enabled the respondent to state

a WTP between zero and another value with a slide control to simplify the survey. However, to

examine the RWTP more accurately, the customer (respondent) should indicate a specific

amount for the WTP without seeing any range for it. This different design provides us with

information about whether a WTP over 30% exists and shows whether the indication of a range

influences the customer.

Since we only theorized about potential warm-glow effects on customer behavior, one should

analyze potential differences in customer behavior before and after introducing a CNC. It might

be interesting to examine whether the average basket size of customers increased or whether

the customer returned more frequently to the online shop after introducing the CNC. As one
75

should conduct this analysis in a real-life scenario, it might be difficult to collect sufficient data

due to privacy reasons. A conclusive analysis would require many people who frequently

purchase products at the store to conclude the influence on customer behavior.

Finally, it might be interesting to evaluate the influence of changes in the CNC communication

in the online shop to clarify its effectiveness. These changes would allow firms to assess

whether low perceived effectiveness results from the customer's attitude or the CNC's portrayal

on the website. Consequentially, the organizations might then be able to engage more customers

to use the CNC.

76

7 Final Remarks
Summarizing our learnings from the literature review, the survey analysis, and qualitative

expert interviews, we discovered that one could divide the influencing factors on adopting a

CNC into two categories.

On the one hand, we found essential factors for a consumer to have an influence on her relative

willingness to pay. Although we could not conduct any further conclusions about the possible

influence of different demographic factors, we learned that the perceived effectiveness is a

crucial factor that firms can influence by clear communication.

On the other hand, companies need to bear different factors in mind when introducing a CNC.

Regarding the products an organization offers, the price and product category determine the

relative willingness to pay (RWTP) of the customer since the RWTP declines with an increasing

price. Moreover, customers are currently more likely to compensate products for which it is

evident that they emit CO2. Considering these factors help a firm evaluate if it can (financially)

benefit from potential warm-glow effects and a better reputation. Furthermore, a company

might also improve its brand image by introducing the CNC, rendering the brand a

differentiator. However, before introducing a CNC, each company must incorporate

sustainability in their strategy first to avoid the perception of greenwashing and be able to

educate the customer.

We transferred the existing knowledge about the willingness to pay (WTP) for eco-friendly or

"organic" products and charitable contributions to climate-neutral products with our thesis.

Therefore, we could also identify how a customer behaves when she already accepted a product

price and then is asked to pay a price premium compared to choosing the more expensive (eco-

friendly) product at first. Additionally, we managed to segment the customer into three

categories of the RWTP, providing different options for the design of a CNC. Lastly, we

identified the product category and price to be influencing factors on the WTP as well. This
77

identification could help the market forecast the areas where a CNC is demanded and

implemented first.
78

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Annex
Annex A : Survey Questions

Willingness to Pay

Attitude
85

Demographics

Annex B: List of our Interview Partners

Name of Interviewee Position / Role Company

Philipp Burgtorf Managing Director Emma Matratzen GmbH

Julien Slijan Head of Product DX Zalando

Sustainability

Anton Kononov Founder Formel Skin Derma GmbH

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Annex C: OLS Regression on non-linear relations

Annex D : ANOVA Analysis – Results

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Annex E : New Environmental Paradigm

Dunlap & Van Liere (2008)

88

Delineation of Contributions
0 Abstract L.G.

1 Introduction L.G.

2 Literature Review K.L.

2.1 Willingness to pay for eco-friendly products

2 Literature Review L.G.

2.2 Moral Licensing and Warm-glow

2.3 Adoption of corporate sustainability initiatives

3 Methodology K.L.

3.1 Purpose

3.2 Quantitative: Online Survey

3 Methodology L.G.

3.3 Qualitative Research: Interviews

4 Quantitative Findings K.L.

5 Qualitative Findings L.G.

6 Discussion L.G.

6.1 Implications for the Customer

6.3 Implementation of the CNC

6.4 Ethical Considerations

6 Discussion K.L.

6.2 Implications for the Company

7 Conclusion K.L.

8 Final Remarks K.L.

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Declaration of Authorship

Candidate Name #A: Lars Gründer Candidate Name #B: Katharina Liersch

Date of Birth #A: 22.02.2000 Date of Birth #B: 07.06.1999

Supervising Professor: Prof. Dr. Dries Faems

Title of the Thesis:

Influencing Factors on the Adoption of a Climate Neutral Checkout

I hereby declare that I have written this paper on my own and with no other help than

the literature and other supportive material listed in the annex. Citations of

sentences and parts of sentences are declared as such, while other imitations are

clearly marked and linked to original sources with regard to extent and intention of

the statements made. This thesis has never been handed in to any examination

authority before and it is also not yet published.

Vallendar, 12.05.2021
_________________________ ____________________________

Place, Date Signature Lars Gründer

Vallendar, 12.05.2021
_________________________ ____________________________

Place, Date Signature Katharina Liersch