Increasing consumers’ willingness to pay (WTP) for environmentally friendly products is a key challenge for sustainable development in market economies. Still, how consumers react to favorable and unfavorable environmental information of different quantitative extents is largely unknown. This research therefore uses prospect theory and competing theoretical foundations to derive pertinent hypotheses and test them by using a multi‐level structural equation model. The analysis draws on a survey‐based experiment conducted among a representative sample of the German population. Results confirm key assertions of prospect theory. The negative effect caused by unfavorable product carbon footprint information on WTP is stronger than the positive effect caused by respective favorable information. Besides this negativity bias, consumers tend to generally reward or punish deviations of a product's environmental performance from industry average instead of consistently accounting for the size of these deviations. From a sustainable development perspective, the observed patterns highlight a problematic contrast between the need for substantial environmental improvements and limited market incentives for companies. Consequently, political intervention is needed to introduce negative labeling, raise consumers’ reference points, set minimum industry standards, and subsidize companies for radical improvements.

Companies have been experiencing increasing pressure from NGOs to overcome unethical and unsustainable behaviours. The purpose of this research was to study the interplay between supply chain transparency and NGO pressure. The analysis builds on the literature on supply chain transparency and institutional pressures. We conducted a time-lagged, multi-level regression analysis that included data from 270 fashion companies over a 5-year period to investigate the effect of NGO pressure on transparency and vice versa. The results revealed that companies with higher levels of transparency are more likely to be pressured by NGOs than less transparent companies. Furthermore, our findings show that, depending on the number of campaigns, NGO power and communication about campaigns, NGO pressure can either stimulate corporate transparency or turn into a negative effect that leads to lower levels of transparency.

Biodiversity loss is one of the planetary boundaries that is most urgently in need of action. However, very little is known about the consumers’ willingness to pay (WTP) for products with higher (or lower) levels of biodiversity performance. Therefore, this research was conducted to investigate how consumers’ WTP is influenced by a product's impact on biodiversity. To address this question, we collected representative data from 524 German consumers in a survey‐based experiment. Drawing on prospect theory, we identified the shape of the WTP reaction function for a given product in relation to its biodiversity performance. We demonstrate that consumers with sufficiently high levels of education and concern about biodiversity loss are willing to pay more for products with above‐average biodiversity performance and less for products with below‐average biodiversity performance. However, the extent to which a product outperforms the industry average does not influence consumers’ increased WTP. From a sustainable development perspective, these observed patterns highlight the problematic contrast between the pressing need for substantial improvements in product biodiversity performance and the limited incentives provided by consumers. Consequently, the findings suggest that the incentives that consumers currently provide for corporate biodiversity management are insufficient to assist in staying within the planetary boundaries.