Green acts followed by bad acts: Could sustainability have a dark side?

ASU research follows New York City cab drivers to find out if green business decisions prompt people to be more or less honest.

Have you ever topped off a great morning workout by sneaking a donut into your diet once you got to the office? If so, you're not alone. Many of us take such actions because we tell ourselves virtue earns a self-reward.

It's called moral licensing, the belief that doing good deeds gives us a little moral credit we can spend doing something not so good, explains Roger White, associate professor of accountancy. Given the current climate of corporate responsibility, White wondered if sustainability initiatives at work could justify bad acting among workers. His research shows it can, which managers might want to consider when crafting company policy.

Getting taken for a ride

White joined with three colleagues from other universities and conducted this research using data from New York City cab drivers as supplied by the NYC Taxi and Limousine Commission (TLC), the regulatory board for NYC cabbies. TLC captures ride-level information for every registered cab ride via the onboard computer systems that calculate fares. The data include the date and time of the ride, pickup and drop-off locations, fare, tip, method of payment, plus driver and cab information.

White and his team evaluated a six-month period representing nearly 37,000 drivers who steered more than 53 million rides. The research target was rate-code fraud, which occurs when drivers stay within New York City but charge the rider the out-of-city rate. In this study, the average fare was $10, and rate-code fraud jacked it by an average of $6.90. "It's a pretty good lick on top of a regular fare," White says.

It's enough to make a small percentage of cabbies cheat from time to time. About 4% of the drivers studied had defrauded customers the week before the timeframe under review.

During the six months studied, about 60% of cab rides took place in hybrid cars, and the researchers tracked whether driving a more climate-friendly car correlated with more drivers engaging in rate fraud. White says it could make a driver think:

If I'm sustainable and I make a green business decision, doesn't that give me credit that I can spend being dishonest in a business transaction?

Such thinking could also go the other way. Some research has found that green business decisions prompt people to make other sustainable choices, and "it can build on itself," White says. "Our goal was to determine whether green business decisions spurred business people to be more or less honest."

NYC cab drivers were an excellent fit for this investigation because there is plenty of data on their activity, and they also get to choose whether to drive an internal combustion engine (ICE) or a hybrid vehicle.

Among the 37,000 cabbies in the raw data, the researchers found 8,649 who drove both kinds of cars: ICE and hybrid vehicles. The scholars only looked at that smaller sample because it ruled out drivers who only drove hybrids. After all, hybrids are less gas-hungry, and drivers pay for their gas. That way, White said, it eliminated the possibility that "drivers who are focused on financial gain are going to cheat more and opt for the economical taxi cab."

Accelerating awareness

Next, the team had to figure out if driving a sustainable car made the drivers more prone to cheating. To do that, the team used climate-related information or experiences that drivers experienced on certain days. Specifically, they looked at behavior on days when smog alerts were broadcast citywide or when climate issues made the front page of the New York Times, which the team considered a proxy for a day when environmental issues were in the news.

The team also looked at where the drivers had pickups and drop-offs to correlate data with trash complaints in the city. The researchers wanted to know if a "driver was exposed to a filthy corner … a lot of trash on the street … pollution," White explained.

The idea behind these bits of information or trash-filled streets was that such input would get the drivers thinking more about things like climate change, environmental degradation, and sustainability, which could also make their own choices to drive a hybrid vehicle feel a little more virtuous. After all, more feeling virtuous could translate into enhanced moral license.

The other important thing about the information and experiences was that they hit drivers suddenly, which was something the drivers themselves couldn't control. "They came out of the sky, and this allowed us to be more confident that what we were picking up was a causal effect of the decision to be green and not some characteristic of the individual's honesty and propensity to be sustainable."

Did the information or trash-strewn streets impact drivers? Yes. "When drivers made a green business decision and were exposed to one of these events that put sustainability at the top of their minds, we saw that they were more likely to defraud their customers that day," White says. "Drivers did receive some moral credit for being green, and they spent that moral credit by cheating their customers more often."

On the days when drivers saw uncollected trash, they were 40% more likely to engage in rate-code fraud. Smog alerts bumped up the number by 10%, and having climate news on the front page of the NY Times was accompanied by a 50% increase in fraud.

The numbers sound huge, but they're not. "The likelihood of rate-code fraud on any ride is three in 10,000. A 50% increase in that means instead of three events, it's four and a half," White explains.

There's not a lot of policing in the taxis' environment, but these drivers tend to be honest more than they're dishonest.

Still, the findings of this study — the first of its kind to test cross-domain (from sustainability to defrauding customers) moral licensing in a real-world situation instead of a university psych lab — suggest that sustainability initiatives could have unintended consequences. White and his colleagues demonstrated that being green did seem to give people moral license that jumped out of the sustainability space and into business ethics.

Noting that these unintended consequences stem from human psychology, White says, "In businesses where you see a lot of your workers making green business decisions, this is maybe a concern that you should keep an eye out for."

He adds that much of the work on sustainability is conducted in psychology labs or aimed at behavior in Fortune 500 companies, where there are data on the impacts of sustainability initiatives.

"We know a lot about how 21-year-old psychology undergraduates make decisions in university labs. We know a lot about how Fortune 500 companies make sustainability-driven decisions in their board rooms," White says. "We don't know much about sustainability issues and entrepreneurs or individual service providers, like taxi drivers, who are essentially entrepreneurs. There's a big missing middle ground where there are still a lot of question marks."