BPhil Thesis

Sustainable Consumer Decisions and Value Creation:
How Consumer Choices Drive Business Success and Global Progress

Jack Pearson

Bachelor of Philosophy, University of Pittsburgh, 2024
Bachelor of Science in Business Administration & Finance, University of Pittsburgh, 2024

Submitted to the Faculty of the
David C. Frederick Honors College in partial fulfillment
of the requirements for the degree of
Bachelor of Philosophy

University of Pittsburgh

2024

UNIVERSITY OF PITTSBURGH

COLLEGE OF BUSINESS ADMINISTRATION

This thesis was presented

Jack Pearson

It was defended on

November 15, 2024

and approved by

Rebecca Badawy, Associate Dean for MBA and Specialty Masters; Clinical Associate Professor of Business Administration, Joseph M. Katz Graduate School of Business

Joaquin Rodriguez, Associate Professor at the Chemical and Petroleum Engineering Department, Swanson School of Engineering

Nicholas Muller, Lester and Judith Lave Professor of Economics, Engineering, and Public Policy, Tepper School of Business

David Lebel, Associate Professor of Business Administration Ben L. Fryrear Faculty Fellow, Joseph M. Katz Graduate School of Business

D-Scholarship @ Pitt Link

Preface 1.0 Introduction: Climate Change and Sustainability 1.1 Proposed Solution: Sustainability & Systems Thinking 1.2 Consumers: the power of the masses 1.3 Sustainable Decisions and Greater Value Creation 1.4 Thesis Structure and Purpose 2.0 Consumers and Sustainable Consumption 2.1 Who are consumers?2.2 Consumers as drivers of change 2.3 The Value Framework 3.0 Experiment Methodology 3.1 Goals of the experiment 3.2 Methodology and Structure 3.3 Consumer Choice 1 3.4 Consumer Choice 2 3.5 Results and Measuring Impact 3.6 T-Test 1 – S versus NS Confidence 3.7 T-Test 2 – Choice 1 versus Choice 2 Confidence 3.8 Value Framework Component Weights 3.9 Summary of Findings 3.10 Insights for Future Research 4.0 Discussion 4.1 Consumer Impacts 4.2 Business Impacts 4.3 Economic Impacts 4.4 The path forward Appendix A Appendices and Supplemental Content Appendix A.1 Tables and Figures Bibliography

List of Figures & Tables

Figure 1 – The structure of the experiment Figure 2A and 2B – Vehicle Purchase Model Figure 3 – The Value Assessment Figure 4A and 4B – Home Purchase Model Figure 5 – Value Equation Component Weights Appendix Figure 6 – Vehicle Model Inputs Appendix Figure 7 – House Model Inputs Appendix Figure 8 – Vehicle Financial Model Appendix Figure 9 – House Financial Model Appendix Figure 10 – Vehicle Environmental Model Appendix Figure 11 – House Environmental Model Appendix Figure 12 – First Choice S vs NS Appendix Figure 13 – Second Choice S vs NS Appendix Figure 14 – Test 3a Financial Appendix Figure 15 – Test 3b Environmental Appendix Figure 16 – Test 3c Social Appendix Figure 17 – Test 3d Personal Appendix Figure 18 – Test 3e Psychological

Preface

This thesis was written to highlight the inefficiencies in our current systems of consumption, production, and business. It is evident that significant changes to these systems are necessary to avoid environmental catastrophe. During my undergraduate study of finance, I was trained in methods for making financially sound business decisions but observed that the downstream and environmental impacts of corporate and industrial projects were often overlooked. This realization led me to explore sustainable business practices as a way to build truly successful businesses—those that create long-term value for society. Successful entrepreneurs understand the importance of building customer-focused businesses. Providing maximum value to customers not only generates higher returns but also fosters a stronger competitive advantage. Through this research, I have gained valuable insights into what consumers value most and how those decisions impact broader systems. This thesis represents the beginning of my efforts to develop stronger, more persuasive arguments that sustainability provides a powerful framework for addressing complex problems. Moving forward, I hope to extend these principles to explore applications in business and economic systems. The ultimate goal is to create efficient, sustainable systems that benefit humanity and allow us to live in harmony with our planet.

1.0 Introduction: Climate Change and Sustainability

The climate is changing and humans are to blame. Natural ecosystems continue to be disregarded as an integral input of our economic systems. Our economy’s primary energy sources are fossil fuels which are being extracted from Earth's core at a rate faster than they can form. These extraction and refinery practices not only remove valuable, finite, and nonrenewable resources, but are also highly inefficient as most of the material is wasted before it reaches the end use-case. A remarkable percentage (over 30%) of the resources extracted are directly discarded or mismanaged. [1] In Natural Capitalism, author Paul Hawken attempts to quantify the wastefulness of our systems based on industrial flows. Of the materials mined or harvested, 93% is lost in extraction and manufacturing, with only 7% transformed into finished products. 6% of those are discarded after one use by consumers, and only 1% remains in durable goods. [2] Waste surrounds us, and our production and consumption practices have exceeded nature’s ability to process outputs. Plastic waste, for instance, can take between 20 to 500 years to decompose, and much of it ends up in oceans polluting marine ecosystems. [3] Carbon emissions, too, persist in the atmosphere for up to 30 years before being reabsorbed into the carbon cycle. The global average CO₂ concentration now exceeds 419.3 ppm (2023), a 50% increase from pre-industrial levels. [4] Our modern economy is built on mass production and industrialization—optimized for speed, volume, and unit economics, not waste minimization or efficiency. Some firms employ strategies like planned obsolescence, where products are intentionally designed for early replacement, further escalating waste. These production systems, deeply rooted in American culture since the advent of the assembly line, influence how goods are manufactured and consumed. To fix inefficiencies, both consumption and production cycles must be addressed. As these human-centric systems become increasingly complex, so does the need to manage their shortcomings. This research explores consumer choices and sustainable decision-making—filling a gap in existing research. Consumers drive demand, shaping business behavior more than supply constraints.

1.1 Proposed Solution: Sustainability & Systems Thinking

Sustainability provides a guiding framework for responding to the climate crisis. It was first defined by the United Nations Brundtland Commission in 1987 as “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” While that definition is comprehensive and widely accepted, it is also vague and overly broad. More recent definitions have refined the concept to be more actionable. In Sustainability: What Everyone Needs to Know, Thompson and Norris offer a sharper take: “a measure of whether (or to what extent) a process or practice can continue.” [5]

This modern definition shifts the emphasis toward long-term feasibility and repeatability—what can continue and for how long. It reinforces the need to factor future viability into current decision-making. From a business or individual standpoint, this definition helps connect sustainable practice with strategic planning, as decisions must be compatible with continuity.

This thesis adopts a simple working definition: a sustainable decision is one that does not jeopardize your ability to make the same decision again in the future. In theory, the most sustainable decisions are those that can be repeated infinitely. While such perfect cases are rare, sustainability lies in the effort to maximize net benefit and minimize net cost in a way that maintains future opportunity.

Systems thinking is a critical complement to this framework. It emphasizes interconnection and feedback loops. Donella Meadows, in Thinking in Systems, argues that “the behavior of a system cannot be known just by knowing the elements of which the system is made.” [6] In other words, the structure and feedback of the system matter just as much as its components. Most human activity—including economic activity—is a subsystem of the biosphere. Nearly 30% of global economic output is macro-critically dependent on natural systems like water cycles, nutrient flows, and ecological stability. [7]

From a systems view, sustainable processes are those that produce equal or greater output with fewer inputs over time. These systems last longer, use fewer resources, and typically deliver stronger long-term value. They minimize extraction while maximizing regeneration. That is the vision of sustainability embedded in this research.