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Green Fix
Welcome to the Green Fix, the climate & sustainability podcast for Australian corporations and their ESG practitioners. We explore the top challenges and opportunities in the industry, how they are impacting your business and your work, so that you can keep your sanity.
Green Fix
S1E6: Nudging towards Sustainability: Insights from a Behavioural Scientist, with Andreas Ludwig
Your Hosts:
Dan Leverington
Loreto Gutierrez
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When it comes to advancing sustainability, we often focus on educating people or creating elaborate strategies—but what if the secret lies in simply making sustainable choices the easiest ones to make?
Andreas Ludwig, a behavioural scientist with a fascinating journey from the former East Germany through positions at McKinsey, Accenture Digital, and most recently as Principal Behavioural Scientist with CBA Sydney, reveals how understanding actual human behaviour can transform sustainability initiatives.
Growing up in a country that disappeared almost overnight gave Ludwig a unique perspective on systems change and human adaptation. This experience fuelled his skepticism toward traditional economic models that assume rational behaviour, leading him to discover the experimental work of behavioural scientists who demonstrated the predictable irrationality of human decision-making.
What makes this conversation particularly valuable for sustainability practitioners is Ludwig's practical insights into implementation. While corporations spend millions on sustainability strategies, they often neglect the critical "last mile"—where human behaviour determines success or failure. Take household electrification: banks create green financing products assuming money is the main barrier, when many customers actually struggle most with knowing which installer to trust or what technology to choose.
The power of behavioural science lies in designing "choice architecture" that makes sustainable options effortless. Consider how default settings dramatically impact outcomes—from organ donation rates to energy plans—without restricting freedom. Ludwig also explains why audience segmentation matters, with research showing only 10% of Australians are environmentally motivated, while 60% want to understand "what's in it for me."
For professionals without behavioural science teams, Ludwig offers accessible starting points: adopt the behavioural science "lens" through books like "Atomic Habits," implement simple A/B testing, and recognise that small interventions shifting behaviour even 10-20% represent significant wins. For personal habit formation, focus on making first steps extremely easy and creating "habit stacks" that combine enjoyable activities with beneficial ones.
Ready to apply behavioural science to your sustainability initiatives? Listen now to discover how understanding human decision-making can help you design interventions that actually work.
If you think about the actual decision-making of people, you can try to educate people and tell them what is the right decision and give them more and more information and convince them, or you change the system, not the person Meaning. Why don't we make the decision that we think is the right one, the easiest?
Speaker 2:Welcome to the Green Fix, the climate and sustainability podcast for Australian corporations and their ESG practitioners. We explore the top challenges and opportunities in the industry and how it impacts your business and your work, so that you can keep your sanity. I'm your host, loretta Gutierrez.
Speaker 3:And I'm Dan Leverington, and today we are joined by Andreas Ludwig Born. In 1974, in the former German Democratic Republic, andreas is a seasoned behavioral scientist and management consultant with a truly international perspective. His academic journey took him through Germany, austria and Canada, accumulating in a PhD in economics from Seimer Fraser University in Vancouver, british Columbia. Andreas built a strong foundation in strategy and consulting, spending many years with leading firms such as McKinsey Co, fti, delta and Accenture Digital across Europe and the Middle East. Since the end of 2020, he has dedicated his expertise to behavioural science, recently serving as a Principal Behavioural Scientist with CBA in Sydney. Beyond his professional pursuits, andreas is married with an adult son and embraces a wide range of passions, including professional portrait, event, landscape and pet photography, a deep appreciation for music, a love for travel and a keen interest in food, with Japan holding a special place in his heart. Firstly, we absolutely agree with Japanese food. But secondly, a follow up easy one. What is a behavioral scientist?
Speaker 1:Yeah, you think this is a very easy question. Let me try to answer this very easy question with an easy answer and then we make it a bit more complicated. Basically, a behavioral scientist tries to understand human behavior, Understand human behavior, how people actually behave. As an economist, I can tell you economists claim to do the same, but they have a model of how people actually behave. As an economist, I can tell you economists claim to do the same, but they have a model of how people should behave. Behavioral scientists try to understand how the human behavior actually works.
Speaker 1:Most behavioral scientists don't stop there. They don't want to just understand how humans actually behave, but they also want to use this knowledge and try to influence behavior. Influence behavior in an ethical way. As a behavioral scientist means helping people to achieve what they want to achieve. But they can't really because all the obstacles, the small little obstacles that we don't really see, and the biases that all of us carry with us. If you understand what these biases and obstacles are, you can design what we call nudges. This is probably what people know about behavioral science. You can design nudges to help people over these hurdles and then really achieve what they want to achieve.
Speaker 3:If that is the easy answer, how would you go down a further layer?
Speaker 1:Well, a further layer is that there is no such thing as a behavioral scientist. I think an economist is a more well-defined behavioral scientist can be a plethora of different things. It can be a psychologist. That's probably where most of my colleagues are coming from. Myself, I'm an economist by training and got to behavioral science by being frustrated with economic theory thinking people do not behave like this theory is describing it. But there's also neuroscientists. In the team that I had at CBA we had neuroscientists vision scientists so we have people looking from very different perspectives at human behavior. Nowadays a lot of people also come from AI, try to understand how either AI behaves and it compares to human behavior, or how AI can help humans to behave differently. So that makes it a bit more complex, and that also means that if you talk to a behavioral scientist, you will not get the same answer from each behavioral scientist in the same way. You will probably rather like to talk to a team of four or five people that combined can create the magic sword.
Speaker 2:Can you tell us about your career and what you're currently working on?
Speaker 1:I have basically two careers I have an academic career and I have a business career and they have been only loosely linked until about five years ago. I started pursuing a PhD in economics after my university studies and in dealing economics I went into microeconomics, which is kind of describing how people make choices from an economic perspective, utility maximization and whatnot. And after solving so many partial differential equations and a lot of math problems, at some point you ask yourself do people actually behave this way? And this brought me to behavioral science. In the middle of PhD level courses in Vienna at the Institute for Advanced Studies, my partner at the time was like yeah, this is all very fascinating, this is really cool, but at some point you want to earn some money. Can you maybe think about getting a job?
Speaker 1:And then I applied as an economist in Vienna, had a couple of interviews in a more traditional economist's jobs, but it wasn't really that attractive. But what I also did is I applied to different consultancies and it was strange to me because I never really wanted to be there. But I landed a job with a consultancy with a McKinsey company and ended up working for this company for six years and became a strategy consultant. And I did use behavioral science now and then in some of our work projects, but not really as a career. I had this, still this thing in my mind, that hey, I started PhD courses, I want to complete this, and so this is what I did in Vancouver, worked there with over a thousand kids on discrimination between visibly ethnically different kids, and completed my PhD there, but never really brought it together. And it is really only here in CBA Commonwealth Bank in Sydney that for the first time, I had both my consulting and my academic career merging and bringing me together as a principal behavioural scientist.
Speaker 3:I'm really fascinated about how the journey began. You shared with us that you were born on the 25th anniversary of East Germany's creation. I'm really interested in how that experience and that timing in history influenced your journey into behavioural science at the beginning.
Speaker 1:If you understand what happened to East Germany. What happened to us was that the country disappeared. It disappeared in a matter of not even a year. The wall came down and within not even a year the country was gone. And that for me, was and I was 15 at the time right.
Speaker 1:So adolescence your brain is rewired at this very time. You think you're growing up in a country that tells you what you do for the rest of your life. Everything is planned. If you fill the paperwork, you will even be able to buy a car in about 15 years, and then this thing is gone. So that was really liberating and a really joyful moment.
Speaker 1:But it also had a flip side of you don't know what's coming and you're thrown into a completely different system and you have nobody to ask for. So you don't know how to behave, and what it did to me is made me deeply suspicious about traditional views. We have been doing this for the last 50 years and that's why it's right. It doesn't resonate with me, because I grew up in a country where people told this to each other for 40 years and then it was gone overnight. This made me maybe a rebellious thinker, uber critical, and then, if you then have to deal with something very rigid, very structural, like economic, microeconomic theory. I was always looking for the way out and why this is wrong and what is missing.
Speaker 1:And then I discovered the works of Dick Thaler and Amos Tversky and Daniel Kahneman so people who experimentally showed, not because of armchair philosophy and opinion, but they ran experiments and they could show that things are not as described by economic theory, and this really really fascinated me. If you think about it, maybe if I grew up a few hundred kilometers to the west, I wouldn't have known exactly what to do. Hundred kilometers to the west, I wouldn't have known exactly what to do, but as I haven't, it has been a discovery journey, both in terms of academia, in terms of professional life, but also in terms of geographies. Since the wall came down, I've been basically living in different continents, in different cities and exploring the opportunities.
Speaker 3:How do you think that has then fed into your decision to pivot into climate and the work that you're doing now?
Speaker 1:In terms of sustainability. It's very clear that over the years the discussion has shifted from we need to protect our environment. Where I grew up in East Germany, the environment was not well regarded regarded. The country was struggling to sell whatever we could sell to make ends meet down to taking the cobblestones from roads and putting asphalt on top because the cobblestones were more valuable to be sold to West Germany for getting some hard currencies. So the environment was really bad and protecting the environment was a big driver at the time for ordinary people to say we want a better country. And so the revolution in East Germany was not about we want to get rid of the country. This only happened later. It was we want a better country and the environment not being in any acceptable shape was one of the reasons. But it shifted.
Speaker 1:Now we're not really talking about protecting the frog around the corner so much as seeing that this is a global problem, that carbon emissions is not something that you can contain, even if you want it, in Australia, if China at the same time pollutes way more and vice versa. The global perspective is very important to bring to the sustainability discussion, and the global perspective is also super fascinating if you think about behavioral science, because behavioral science also tells you that all the decisions that we do as human beings are contextual. It really makes a difference what kind of cultural context you grew up in, who you believe, what media you follow, what is your perspective to authority. And if you don't know that, you can not design anything that will resonate with people and make them change their behavior.
Speaker 2:And Andres, you have been focusing on behavioral science from an academic perspective and you have done a lot of work around social issues, and now you have a focus on climate and sustainability. Why do you think that behavioral science has a role to play in shaping sustainability strategy in the corporate environment?
Speaker 1:I might push back a tiny bit. I'm just pushing back against strategy. There's a wonderful book I go to when it comes to behavioral science the Last Mile by Dilip Soman, a professor in Canada. He describes how behavioral science really works, and the one point he makes is that we spend a ton of time on strategy and at the end, the impact is created through implementation, and implementation has to be done by people, and these people behave in a certain way. So if you neglect the last mile, you can create tremendously beautiful products and then you sit and wonder why nobody likes them. And it can be very, very small, seemingly unimportant factors that will change people's behavior, and if you don't understand this, you can waste a ton of money.
Speaker 1:And sustainability. One of the discussions we have in the banking system was you need to invest into sustainability. So one of the areas of activity for households is electrification. You want to make sure that people remove their gas stoves, people put solar on the roof, people have a battery in the basement. Maybe they change to an EV. There's so many things that you can do and many people need money to do this.
Speaker 1:So banks are thinking this is a business opportunity. Let me create a product that is green financing, and I will offer you the green financing. I'm solving the problem by giving you money. True, strategically correct, but if you don't understand the customer journey and you don't understand that the biggest problem that people face electrifying their house is not the money For some people it is, but for the majority of Australians, this is not the biggest problem. The biggest problem is where do I even start? What is the installer? What type of solar do I need? Can I trust them? These questions are way before you talk about any kind of financial impact. And when you have clarified all of this, the installer might come up and say hey, and, by the way, here's a finance option that I can offer to you. Very simple here you sign, all is done. The bank is not even there.
Speaker 1:So we spend too much time on strategy and we spend too little time thinking through what is really the last mile, what is the real touch point with customers? What is the real thing that they struggle with? Where can we actually help them and not just assume, because we have a nice product that we designed well and priced well, people will just come to us and use it appropriately. That's why I think it's so important to have behavioral science because you want to understand this. But it's not a strategy thing. It's more an implementation planning. And then it's a lot of experimentation what works and what doesn't work Again, not something that you typically do in strategy.
Speaker 1:In my days at McKinsey, people would not really be entertained by you entering the boardroom and say, okay, here's three different options that we can do. I don't know which will work, but we have to experiment. And people expect I pay you a lot of money, you tell me what to do, right, and in many consumer problems customer problems, human decision problems it doesn't work that way. You have an idea of what could work, what has a higher likelihood to work, what has a lower likelihood to work, but at the end of the day, you need to test it, and just because things worked in the US doesn't mean they work in Australia. So that is something that I think is a fundamental shift and needs to be incorporated, for sustainability work a lot.
Speaker 3:What you're describing also is multiple levels or stages of friction that are unaccounted for, and they end up not working, even though there are probably solutions for them if the implementation is planned out properly.
Speaker 1:And I'm not saying that behavioral science is the only way to deal with the frictions. Many people that design successful applications and products they know right. So a product designer doesn't need to be a behavioral scientist to know that there's frictions and that you need to test this properly. I think what we can provide as behavioral scientists is just another lens that says many of the frictions are not technical. There can also be psychological frictions, things that as human beings we are biased. We are not able to follow all our strategic plans, and that is not random. You could say an error is. For an economist, an error is always like sometimes you get it right, sometimes you get it wrong. On average, it will average out. Behavioral scientists know that there's biases, that there are just reproducible mistakes and even if you try it 15 times, the mistake will still be there and it will go into one direction only. If you have this understanding then you can start solving right. So we could say, just to give you a very simple example, any kind of drop-down list that you have in any digital product is a sorted list and it does make a difference if your option is the first one or the 20th, if you say, oh, let's sort all the options alphabetically, because that is nice and orderly. You're running the risk that people are stuck with options they don't like simply because they are in the top three or top five or whatever fits on your screen, because they don't like to scroll twice.
Speaker 1:The order effect matters. It also matters how many options you have. We call it choice overload. People don't like to have too many options. Right down to the fact that if you tell people what to do, you want to focus on one thing at a time, because that that gives the best, the best opportunity for people to do something. And you have to be careful because many times you need to do more than one. But as a starting point, make it one like super simple things and all of these small things. People say yeah, yeah, trivial, small things, but you forget them and then all your great strategy falls apart.
Speaker 3:It's a really good segue into those core tenets that exist within behavioral science. How do you see them presenting themselves, particularly from a commercial sustainability perspective and the acceleration or deceleration of sustainability initiatives?
Speaker 1:I have a couple of thoughts to this. First of all, if you think about the core tenets of what behavioral science has to offer is trying to understand what human behavior really looks like and be experimental in this. What I mean by this is there is no such thing as a simple solution, a singular solution. One of the hypotheses that we were driving in my work in CBA is we try to understand. When we talk about sustainability, we're not talking about the same thing. Not everybody has the same feeling when we talk about protecting the environment. They could be interested in protecting the environment or being sustainable even further for very, very different reasons. At the end of the day, as a business owner, I don't really care If I want to make sure that the energy transition happens and we have solar roofs on every roof that can carry one. I don't really care why you think about it, but if I communicate to my customers, they do care. So if I have a communication plan that says, oh, we need to convince everybody that the world's coming to an end, oh, we need to convince everybody that the world's coming to an end, and if you don't act now and put solar on the roof, the world will crash and humanity will disappear. For many people, this will create what we call reactants. They will not listen because they don't want to listen to this. This is something that doesn't resonate with me. I'm not this kind of person. I'm not listening. And then we have wasted millions of dollars in communication campaigns that are just backfiring, and especially for companies that don't have really a green pedigree in the first place. People are asking why are you telling me this? You are a financial institution. You are part of the problem. You're not a solution. They get very defensive.
Speaker 1:In the research that we've done, we found that about 10% of Australians are willing to go the extra mile for the environment. That's a minority. And you have another 30-ish percent that want to but can't because they just bought a house, interest rates were going up, they have two kids at school, so they can't really afford to do it. But you have this 60% of people who say well, show me what's in for me. Then we're talking. Fortunately, for many of the green transition technologies that we are using now, this is not a contradiction. You can say if you want to earn, save money, solar is good now because it is the cheapest way of generating energy for many people.
Speaker 1:If you have the right communication strategy and you resonate with people where they are thinking, what they are thinking, what they are trying to solve, that can be much more helpful than trying to put a singular message to everybody. This is one of the core tenets that says you need to understand people and it needs to resonate with them what you're saying. But then on the nudging, we have another term that we call choice architecture. If you think about the actual decision-making of people, you can try to educate people and tell them what is the right decision and give them more and more information and convince them. Or you change the system, not the person Meaning. Why don't we make the decision that we think is the right one the easiest?
Speaker 1:A very prominent example was an experiment that has been run on organ donation. It was the question of like does it make a difference if we structure the decision for becoming an organ donor differently? And people looked at different countries and they were puzzled by the fact that the country of Germany and the country of Austria, both of which I live in they're basically what they say divided by the fact that the country of Germany and the country of Austria, both of which I live in. They're basically what they say divided by the same language. We're basically the same, but they had so different rates of organ donation. Austria had 99.7% Don't quote me on the number. Germany had like 20, 30%. The big difference was one was an opt-in and the other one was an opt-out. One was a. You need to tell us if you don't want to be an organ donor. Austria, in Germany, you need to tell us if you're good being an organ donor. This makes all the difference. This is what we call choice architecture and the example of the drop-down list. Another one is default work.
Speaker 1:In my work as a consultant, we worked in telecoms and we had pricing plans for people where they could very easily select different price plans. Very simple. It was in the time where you put a SIM card in your phone it was not eSIM at the time and the first thing you do is you want option one, two, three, four, five Different price plans. Very nice, and people really liked it. It was simple. They had a choice, they had agency, they liked it and at the end we had 60% sitting on the default tariff because they just put the SIM card in, dialed the first number, made the first call, they never bothered to say, oh, I want to have the monthly fee plan or the incoming calls for free plan. Knowing this, you can be very impactful with very, very little investment, and this is where behavioral science shines right. So we want to make small changes and have oversized impact.
Speaker 2:Do you have some good examples that you've seen applied to climate and climate choices from a consumer behavior perspective?
Speaker 1:One of the examples not in Australia, but this has been documented in Europe again is default. You have a new energy plan and I'm offering a brown or a green energy plan. The green one is fully sustainable. I make this the default. Now.
Speaker 1:You might say, now you bank on the fact that people don't pay attention, they click through and they don't care, and this is probably what happened with our default tariff in telecoms. But the experiment and the experience of real customers went further. They actually said well, here's three options. One of them is sustainable, in line with the company's strategy. We would suggest, if you can't make up your mind, to go with the default, and that is a green plan. So you be very transparent and you be very upfront to say if you don't do anything, you will end up in this green plan, and the green plan is actually quite a bit more expensive. And still this default was very successful, putting people onto green plans, and some people unsubscribed or changed the plan afterwards, but a majority of people stayed with this green plan. That is choice architecture at its best. You don't want to force people like there's no other option, you only have to do the more costly, but you want to make the right choice the easiest, so that most people will follow and stick with it.
Speaker 2:It's really fascinating to understand the potential impact that behavioral science can have from a corporate perspective, in particular, how effective it can be. I'd be curious to understand from your experiences is it challenging to apply behavioral science in the corporate environment? You've got some really great recommendations by some very clever people that have studied human behavior, and then when we take that to the practice, where do you see the pitfalls are?
Speaker 1:The number one problem that you have with behavioral science is that it's experimental. Number one problem that you have with behavioral science is that it's experimental, and you cannot believe the amount of discussions that we had with colleagues, but this is not only in banking, this is throughout the world. The biggest discussion that we had was we need to experiment, and we need to experiment properly. And what does it mean is we need to have what we call a control group. That means you have this wonderful product, you think you're saving the world, and now there's somebody comes and says, well, yeah, good, we roll it out to 90% of your customer base, or even to 50% of your customer base, meaning we need at least 10% of your customer base not getting this product, because we need to measure if this thing actually works. For various reasons, this is a very hard battle to fight. Number one you have a product manager and the higher the interest, the more vocal these people are that are deeply convinced that this product works. People in America are flocking to this. We need to have it as soon as possible. In Australia, we need to roll it out now. We're already late. Now you tell this person that you can only roll it out to 90, 80, 50%, depending on how many people you have on the product, because we want to understand if it actually works Very hard. Second thing is, even if you convince this person, these people, they need to wait for the results, because it's not that you roll out a product and day one you have 5 million people sitting on the product. It takes time for people to switch to the product. You need to invest money in marketing campaigns Some of the interventions that we run as behavioral scientists.
Speaker 1:They typically take like six months, eight months a year. For some products it might take two years to actually know if they work or not, depending on how many people you get on the product or not. And having this uncertainty which one will actually work makes people very reluctant. It's much easier to say, well, I have an expert. The expert says it's a great idea, we roll it out, I show that I did my work. It very reluctant. It's much easier to say, well, I have an expert. The expert says it's a great idea, we roll it out, I show that I did my work. It's there, we have built it, it looks great, you have a nice demo. And then it didn't work. Okay, market forces. The expert wasn't right, but I did my work right.
Speaker 1:Whereas if you take behavioral science and you say let's implement this intervention, you're looking at a research and design process already of several months and then you have to wait for half a year to see which of your options actually worked. It's too long, right? That is. The biggest obstacle that we have for using behavioral science in corporate is, if you want to do it properly, it takes too long. Then what happens with behavioral science? It becomes more like advanced marketing. Defaults is something that is very robust. It seems to work across cultures, across situations. So that is something that you can implement and it should work. Other things, like framing effects, anchor effects they might not be that robust. It might depend on the culture. It might depend if you talk to a woman or a man, young or old, so you need to test it and therefore people are reluctant to use it.
Speaker 3:For sure If that can be incorporated into the workflow within sustainability teams and as companies are on their decarbonization journey. What do you see as being some of the problems that behavioral science can solve for these organizations?
Speaker 1:The easiest and the area where we've been asked the most, although not my favorite, is communication. I use the term framing. The idea of framing is that if you have a decision, you can describe the same decision in very different ways, and it makes a difference. Right, you can explain a drug to be a drug that has a 10 probability of dying, or you can describe it as it has a 90 probability of saving you, and just flipping this around makes a difference. Right, you could say, circling back to what I said at the beginning, if we have an understanding of our customer base as a company and we know which customers reacted to sustainability topics better than others, which ones reacted to more monetary incentivizations, we can tailor our communication. This this way. Right, so we can talk to the 10 or even the 40 that I mentioned before on, here's the the best thing that you can do to save the planet, and you talk to the 60%. This is how you save money and be energy independent. Rather more material arguments, and this framing is something that behavioral scientists can do. And the other thing that is good, our, our toolkit is we don't typically go out to to everybody and see what happens. We test it before and you can have nice tests in what we call a laboratory environment, which nowadays is mostly online surveys. You can incentivize. We pay money. You pay money so that people actually have skin in the game in these experiments and then you can see which resonates and which doesn't before you roll it out to. You pay money so that people actually have skin in the game in these experiments and then you can see which resonates and which doesn't before you roll it out to the market. So framing is one thing.
Speaker 1:The other thing is really choice architecture, going through the customer journey and seeing where do they struggle? Where's the complexity really hitting them? Where are they stuck? Where can we help by putting proper defaults right? A typical example is put the salads next to the cashier instead of sweets. Just changing this. You don't have to inform anybody. You don't have to explain that sweets is not a good idea, that you need to eat more carrots, nothing. You just flip it and have the salad bar where people stand and wait in order to pay. This makes a difference For many products. Going through a behavioral audit will help them to see where are these micro obstacles. That don't seem to be a big deal, but they are for actual behavior and then change that.
Speaker 2:As a large corporation, you may want to think about how do we start embedding the programs that behavioral scientists can build for our own organization? A lot of our listeners are also going to be coming from medium-sized businesses, even small businesses, that don't have access to a team of behavioral scientists to review their decisions. What are some resources that individuals, practitioners of sustainability or management can look at to start embedding these practices without having access to their own teams?
Speaker 1:Embedding the behavioral science practices without a team has two parts. One is think like what I call the behavioral science lens. Think like a behavioral scientist and that can be done very simply. The book from James Clyke Atomic Habits is one, and the Last Mile, dilip Soman is another one. They are nice, easy reads.
Speaker 1:Behavioral science is not rocket science. It's not even at the same level of obscurity as economics, where you need to do math. You can start applying the lens, thinking through what could I miss when I design a new product? Why would it fail? Maybe I have a blind spot? Maybe I can ask somebody outside the team who's not an engineer to tell me why they can't use my beautiful product.
Speaker 1:The experimentation is a bit more problematic because for experimentation you need to be able to gather data. Again, you don't need to be super sophisticated. We have been pretty sophisticated. But you can use Excel as long as you have a good number of data points. You can use Excel to see just main effects, like would it be A or would it be B. This kind of A-B testing doesn't need a lot of infrastructure. You can do this and test something even if it's rudimentary from a statistical point of view. But testing it, looking what is better. Just compare the means and see what is better and keep it open. Keep learning. Whenever you have a new idea, test it first and then implement it. That will save you a lot of money and makes it much more likely that you're successful with your product without having a super big team.
Speaker 2:Andres, I want to flip the switch now to the other side of the fence, because, as much as we are all working in this corporate environment, we ourselves are all consumers. We are individuals that are consuming both products, services, media, information. We'd love to understand a little bit more of the way that our brains work if we want to change our own behaviors, in particular, when it comes to sustainability, and to create new habits. Do you have any advice on that?
Speaker 1:There's a wonderful book this is James Gleick. It's called Atomic Habits. Absolutely worth reading. He argues you need to build habits right. Habits are not a willpower thing. Oh, from tomorrow on I'm not smoking anymore. Or from tomorrow on I go to the gym. This is not a thing. Okay, there's a couple of really good points that James makes. One is habits. Start with the first step. You don't build a habit of running 10K, you build a habit on putting your sneakers on and get out of the door. And if you know that, then you can choice, architect, you can put a choice together that makes it more likely for you to put the sneakers on.
Speaker 1:For instance, I was cycling in Dubai. We brought my road bikes over and it was here in my man cave and I never used them. And one of the reasons was because, in order to get the bike out, I first need to move the car out of the garage so that I have space to put the bike through the garage, so that I have space to put the bike through. And then here in North Sydney, you know the streets are not really pleasant to bike. So I never did, and only now, with a bit of time, I bought a bike carrier and I combined this. So okay, if I want to bike, I take the bike and I put it to the car, I go to Centennial Park or some place where you can bike properly, and I basically solve this whole thing together. So biking now is there and it works, and the first step is easy.
Speaker 1:The first step is not, oh my God, I first have to get out of here, and then traffic, and I don't like it. And before I start enjoying it, I'm frustrated. You want to have the first step being super easy. Um, and then what happens is you might even say, well, I'm, I'm cycling, maybe 10k today, but then, as you do the 10k, you feel like, actually, maybe I can do 20, and then before you, before you notice, you have 50. Right, because you, you are then in, your endorphins are floating, you're, you feel your body, that's. It is nice. But if you're just thinking about it and you have no way to go the first step, it will never happen. Make the first step the most easy and put decision rules there.
Speaker 1:The other thing, other thing that I found really interesting, is like you don't start with a habit, you start with a routine. So first build a routine, say I will not take the lift to the fifth floor. I take the stairs. Make it a routine for this week. At some point this routine will get you into a habit. A habit is something like brushing your teeth you don't even think about it and you feel uneasy if you don't do it. This is how you transform your routines into a habit. If you want to put the icing on the cake, you want to have it stack. You want to say can I put the habit that I enjoy and the habit that is useful together? Whenever I go to the gym, I have the pleasure of watching whatever TV series that I would be ashamed to watch with my partner, but in the gym I'm allowed to. You can combine these things and then can make sure that the habit is yeah, you get the reward, and you get the dopamine kick that you need for being rewarded for what you're doing.
Speaker 3:That's really, really cool, I guess. Drilling down a little bit further, how have you seen that from a sustainability space in the consumer mindset, in terms of changing out of either brand loyalty or changing shopping patterns or switching to renewable energy?
Speaker 1:Switching to renewable energy is a structural decision that is really hard to do as a consumer, as a provider. I could imagine using behavioral science to try to make this more attractive. But this is more of a structural decision For everyday choices. There are two choices that make all the difference. One is how we get to work and the other one is what we eat. These decisions we take every single day.
Speaker 1:For transportation, one of the questions would be can we stack one behavior on top of each other? So you say you need to be more active, you want to make sure that you're reaching your step goal. You want to do things for your health, that you're reaching your step goal. You want to do things for your health. How do you do this if you have 20 steps to your car and then you have another 100 at the office? Why don't you take public transit? And for me, public transit is about 1,000 steps to the train station. That's already 1,000 steps, and then I take the stairs in the office. On the office side is another one. So it's easy to come to 5,000, 6,000 steps a day just simply by taking public transit, not taking the car.
Speaker 1:The other question would be eat. I would also suggest a very simple decision rule. At the end, these are not super complicated decisions, these are more trivial things. But if you have a habit of following a certain decision rule, you can actually shift your food choices to a more sustainable direction as well. So my rule is I'm not a vegetarian, I'm not a vegan. I like to eat a good steak.
Speaker 1:But my rule is I'm approaching a restaurant and I start looking at the menu from the vegetarian side and if there's something amazing, something nice that is vegetarian, I'm ordering the vegetarian. If there's nothing that I like vegetarian, I look at the chicken and if there's nothing, then I might go for pork and only then I might go for pea Again. It's almost like your drop-down list. Right, you want to make sure that the nice options or the useful options are on top, but you also want to have your freedom of choice. You don't solve it 100%. It's something else than saying from tomorrow on, I'm a vegan. But, as with any behavioral science intervention, if you, with simple measures, shift the dial by 10, 20%, this is a big win.
Speaker 3:Love that actually, because often perfection gets in the way of the good right, and so just a 10 to 20% is actually hugely material.
Speaker 2:Absolutely Looking at it from those two perspectives. It removes complexity how you get to work, what you eat two simple things that you can look at in your life. That is not going to overwhelm you with decision making.
Speaker 3:That is all very good advice. Speaking of having blind spots and having biases, have we missed anything today, or is there anything that you wish we had spoken about?
Speaker 1:Actually, yes, I think behavioral scientists are struggling, especially on the sustainability side, with one big question, which is okay, I tell you what to eat, I tell you not to take your car to work away. It always feels like, yeah, you have your freedom of choice, you can take your car, but at the end of the day, I still tell you, consumer, to do xyz to to save the planet. Why is it that consumers have to do this? Is behavioral science an exercise for big companies to just point fingers at consumers? Is it just like oh, qantas, we want to nudge people to buy offsets for their flights? Okay, you are the industry that pollutes. I wanted to fly, that is true, but why is it me? Why isn't it you that make sure that your business model is sustainable? And I think this is something that we do struggle with as behavioral scientists to not be accused of just helping companies to shift the blame to their consumers. And it's a bit of a mixed bag on evidence, we actually did some research on this question and what we saw is very behavioral science. It's a mixed bag.
Speaker 1:In the same sphere of things that you could do, which is consumption choices like spending your money, we actually saw that there is a trade-off. If we nudged people to a sustainable energy plan, they are less likely to spend money on other sustainable consumption products. They're like oh, we can spend the money only once. The good thing was, we also asked people how likely are you to take other steps on sustainability? Write to your local representative, go, vote for a greener political representation.
Speaker 1:Clean your environment, volunteer non-monetary choices, and we found that there is no spillover. People who are willing to volunteer for the environment have not been less inclined just because now they have a more sustainable energy plan. It's a bit of a mixed bag. Still, we need to be very mindful that we don't want to claim that behavioral science is all that is needed in order to save the world. It's not A lot of structural problems or structural decisions that need to be taken, and decarbonizing the grid will not be solved by behavioral science. But you know, buying an EV or taking public transit or maybe even getting your gas stove out of the house that might be something that behavioral science can help.
Speaker 3:That's really good advice and really good insight. Going full circle back to the start of the conversation. Often people don't make behavioral change because they don't know where to start. I also love the fact that you reference the importance of systemic change rather than necessarily individual change. An example I often refer to is the major supermarkets getting rid of plastic bags. Them doing that on an industry scale has a significant larger impact than individuals choosing to take a tote bag and plastic bags still being available.
Speaker 2:We're about to end the podcast, so before you go, we're going to end on a high note, asking you the last two questions we ask all of our guests. We've got a really great tool here at the Green Fix. It's called the Green Fix Magic Wand. Andres, if we give you the magic wand, what would you do with it?
Speaker 1:It's a magic wand. It's a tech tool. It solves the problem with one sweep right. This has nothing to do with behavioral science. So let me do the magic wand in the traditional sense. I think with a magic wand I would want to have nuclear fusion at a decentralized level. You know, if every city could have a fusion plant tomorrow, that would be the end of our problems.
Speaker 3:That's magic right. Excellent, Thank you, Andreas. And final one, can you take us out by telling us a piece of positive climate news that you've heard recently?
Speaker 1:Yeah, coming back to where I come from and in Germany. We had elections in Germany lately and, despite me not being very happy with the shift to the right overall in Europe and in particular in Germany, we basically have a new government and the new government decided we need to invest in infrastructure. There's also the war in Ukraine that we need to react to and support Ukraine, but infrastructure program was a priority for the new government and Germany has been sitting on their hands 10, 15 years because we had a debt break. Basically, in the constitution it says we cannot have excessive debt, and so Germany. Even though there was negative interest rates, so people would actually be willing to pay money for the German government to sell them bonds Germany was not investing in infrastructure. So now bridges are crumbling. We need to do a lot. The internet infrastructure is not good. So the new government was like we need to have a proper infrastructure project and they were suggesting to have four or 500 billion euros over 10 years or 12, to invest into infrastructure.
Speaker 1:Unfortunately, the constitution said no and the new government will not have the majority to change the constitution because you need a two-third majority to do that. So what the new government did is why don't we bring the old parliament together as long as it's functional? Because it takes some time for the new parliament to kick in. We bring the old parliament together and then the parties that before was opposition and government, now they form a coalition. We will then ask some others to join us and we change the constitution, and the party that was asked to join for changing the constitution was the Green Party.
Speaker 1:And the Green Party said, okay, yeah, infrastructure, I think we agree, but it cannot only be bridges. We also need to invest into green infrastructure. And so they were able to put 100 billion into the 500 billion in for green infrastructure. They're not part of the government anymore, but they used their last mile, used their power on the last mile, to say well, if you want that and you want to change the constitution, this is what we want. And that meant that 100 billion are now for climate change related measures, and it also meant that the net zero target has been reduced from 2050 to 2045. Both of these things are in the constitution. We hope that Germany is continuing on a relatively ambitious trajectory.
Speaker 3:That is fantastic, what a story, and it just shows the importance of understanding leverage in political negotiations can be used towards climate advantage. That is an excellent use of a wand and an excellent bit of good news. Andreas, thank you. The depth of your knowledge, your experience, your insights into behavioral science and how our listener can use that both in their personal life and then also in their professional life, is something that we're incredibly grateful for you taking the time to share. Thanks for being on the Green Fix.
Speaker 1:Thank you both, it was a pleasure.
Speaker 2:This was Green Fix with your hosts Loretta Gutierrez and Dan Levington. You can get your Green Fix every two weeks on Apple Podcasts, spotify or Pocket Casts.
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