If I am right, and consumers continue to express a desire to make their consumption ethical and responsible, then companies need to get serious about being good corporate citizens. But a couple of barriers present themselves to this course of action. As I said in an earlier post, investors may be skeptical that there are positive profit outcomes to doing good. But what I’d like to focus on today is the problem that companies face with consumers: Though they often express a desire to do the “right” thing, consumers have a track record of refusing to pay for the privilege.

Some would argue, though, that values are changing now. Over the last few months, as we exit the recession, I have seen a number of articles and posts suggesting that, by forcing consumers to re-examine their consumption, the recession has given consumers cause to “go green.” While I’m skeptical about how rapid or complete this change of values may really be, it is consistent with the idea that consumers are looking to get more from their brand choices.

You see, shareholders are not the only people that “invest” in brands. Consumers spend time in choosing brands, and money in buying them, and those expenditures represent investments.

But “return” is not defined so easily in relation to consumers as it is to shareholders. As I discussed in the first post in this series, for consumers, the definition of a good return continues to change, from a product that solves basic needs, to a brand that promotes status, to a consumption choice that signals personal identity and responsibility.

So in theory, satisfying consumers’ desire to do the right thing—whether that is adopting healthy eating habits, helping citizens in developing nations, or promoting sustainable production and consumption—ought to pay dividends.

Of course, another reason why people may not be willing to pay for green goods is that they simply do not fit with the brand’s image. A recent article in BusinessWeek titled “Nike Goes Green Very Quietly” highlights this issue.

When Nike introduced its “Considered” line of footwear in 2005, critics labeled the products “Air Hobbits” and intimated that they undermined the brand’s reputation for high-tech design. Again, lacking a direct consumer benefit, with indistinguishable (or worse) product performance and no fit with the brand, it is hardly surprising that Nike withdrew the line less than a year after introduction.

The fundamental challenge faced by any company that wishes to do the right thing is that they cannot afford to ignore the basics of branding. People will only buy the green option en masse if it matches the product performance of the regular brands and does not cost them extra. Moreover, like corporate investors, most consumers tend to think mostly of the short-term benefits of an action. They may desire to do good but they will only do so when they clearly perceive a personal benefit.

I’ll return to the financial returns of doing the right thing in a later post. But for now, what do you think of my belief that most consumers are unwilling to pay a premium for good corporate behavior, even though they may expect it?

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