The effects of individual ethical awareness on energy choices through a choice experiment in Japan

Ethical consumption has become popular to achieve a sustainable society and environment. Therefore, there is a need for energy suppliers to provide energy in consideration of corporate social responsibility; environmental, social, and governance; and the sustainable development goals (SDGs). This study investigates how consumers’ ethical awareness affects their preference for energy suppliers using a choice experiment in Japan. Energy sources and suppliers’ social and international contributions were considered as attributes, and the data were collected using a web-based questionnaire that asked households about their energy-associated ethical behavior and awareness. The ethical behavior scores were calculated based on the responses, and the sample was divided into quantile groups based on the scores. The preferences of each group were estimated using a random parameter logit model, and the results were compared. The estimation results showed that households preferred suppliers who provided cheaper monthly energy bills, contributed to the reduction of CO2 emissions, did not depend on nuclear power, and used renewable energy. Moreover, households preferred suppliers who contributed to social and international sustainability. Therefore, in a competitive environment under liberalization, energy suppliers should consider their contributions to social and global sustainability addressing environmental, social, and economic concerns on a worldwide scale to attract customers. Meanwhile, no significant relationship was found between the households’ ethical behavior scores and their supplier preferences. Nevertheless, this study found that regardless of their ethical levels, the households highly evaluated suppliers’ ethical activities.