Would you pay up for climate pledges?
Many companies have made climate pledges, and some have already taken them back in the face of higher energy costs. But among consumer companies, I have hardly seen any companies reneging on their pledge to go carbon neutral or net zero. Why? Because it pays to make these pledges.
Vittoria Battocletti and her colleagues performed a series of experiments where consumers were presented with information about a smart watch they could buy. Part of the information given about the smart watch was a climate pledge by the company or the product itself. However, sometimes a company pledged to become carbon neutral, other times they pledged to reach net zero.
These climate pledges were also presented either as standalone pledges without explanation, with a couple of bullet points or with a traffic light system indicating how ambitious the pledge is. If you don’t know the difference between carbon neutral and net zero, you may want to look it up to understand that these are not the same terms and not the same pledge.
Using eye-tracking software, the researchers could show that if a climate pledge is accompanied by bullet points or a traffic light system that explains the meaning of the pledge, they pay more attention to the climate pledge.
Time spent focusing on the climate pledge
Source: Battocletti et al. (2025)
But that didn’t mean that people understood what they were reading or what these climate pledges really meant. The researchers asked the participants how much more they would be willing to spend on a smart watch if it came with a climate pledge. On average, participants were willing to pay about $7 more on a $25 gift card to help a friend buy a smart watch. That is a 30% premium that customers are willing to pay for a smart watch that comes with a climate pledge.
Willingness to pay for a smart watch with a climate pledge
Source: Battocletti et al. (2025)
However, there was no difference in willingness to pay between carbon-neutral and net-zero pledges. Willingness to pay differed more if the consumers were explained what each pledge meant, but the difference was not statistically significant.
Which leads us to a rather uncomfortable conclusion. On the one hand, customers are willing to pay a higher price for a product from a company that has made a climate pledge. But customers are woefully uninformed about what a climate pledge means, which means that companies can capture that higher price with inferior climate pledges, i.e. they can engage in greenwashing and still capture the higher price for their products.