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Analyzing Consumers’ Awareness towards CSR,
Focusing on Environmental Management
Eleni Sardianou
Department of Home Economics and Ecology
Graduate Program of Sustainable Development
School of Environment, Geography and Applied Economics, Harokopio University, Greece
E-mail: esardianou@hua.gr
Athanasia Stauropoulou
Department of Home Economics and Ecology
Graduate Program of Sustainable Development
School of Environment, Geography and Applied Economics, Harokopio University, Greece
Ioannis Kostakis
Department of Home Economics and Ecology
Graduate Program of Sustainable Development
School of Environment, Geography and Applied Economics, Harokopio University, Greece
Received: March 28, 2017 Accepted: April 30, 2017
doi:10.5296/emsd.v6i2.10983 URL: https://doi.org/10.5296/emsd.v6i2.10983
Abstract
The deployment of environmental friendly business practices is strongly related to the
principles of the sustainable development. The customers are an important stakeholder group
that appears to be sensitive to the corporate social responsibility (CSR) actions of a company.
The environmental dimension is increasingly being included as a pillar of a company’s CSR
plan. The aim of this study is to examine the determinants that affect consumers’ awareness
of the environmental dimension of a company’s CSR plan, called hereafter corporate
environmental responsible (CER) activities. Results suggest that consumers’ awareness
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towards CER practices is differentiated regarding their demographic profile. Highly educated
and middle aged consumers are more sensitive to corporate environmental responsible
practices. The income of a consumer is not a statistically significant factor though regarding
their awareness of environmentally responsible firms.
Keywords: Consumer, Awareness, CSR, Environmental management
1. Introduction
The deployment of environmental friendly business practices is strongly related to the
principles of sustainable development. Customers, one of the most important stakeholder
groups of a firm, are sensitive to corporate social responsibility (CSR) actions (Mohr et al.,
2001; Rahim et al., 2011; Grimmer & Bingham, 2013). There is a wealth of research
attempting to define what it means for a company to adopt CSR actions. In particular, the
most widespread definition of corporate social responsibility is that of Carroll’s pyramid
(1991). Carroll (1991) stated that social responsibility of businesses encompasses four
dimensions in the following decreasing order of importance: economic, legal, ethical and
philanthropic responsibilities. An expansion of Carroll’s concept that captures the
environmental dimension of a company’s social responsibility is the one developed by the
European Commission (2001; 2011). According to the European Commission (2001) “being
socially responsible means not only fulfilling legal expectations, but also going beyond
compliance and investing “more” into human capital, the environment and the relations with
stakeholders”(page 6). The environmental dimension is increasingly being included as a pillar
of a company’s CSR plan (Montiel, 2008). In the renewed European Union strategy for
corporate social responsibility, CSR is defined as “a process for firms to integrate social,
environmental, ethical and human rights concerns into their operations and core strategy”
(European Commission, 2011, page 6). Some studies have examined the environmental
dimension of the CSR concept (Mohr et al., 2001; Rahim et al., 2011; Grimmer and Bingham,
2013). A subcategory of the broader concept of Corporate Social Responsibility (CSR) is
Corporate Environmental Responsibility (CER). Mazurkiewicz (2004) recognized CER as the
commitment of business to take the environment into account in decision-making processes
and involves measuring and auditing. Gunningham (2009, page 215) defined CER as
“practices that benefit the environment (or mitigate the adverse impact of business on the
environment) that go beyond those that companies are legally obliged to carry out”. Bisschop
(2010, page 351) summarized CER “as the responsibility of business towards various
stakeholders to take into account the environmental consequences of business activities and the
longer-term environmental needs in order to avoid compromising the sustainability of future
generations. Environmental practices may include green technologies, recycling programs,
carbon emissions reduction programs, waste management, auditing, green technologies, etc.
(Mazurkiewicz, 2004; Montiel, 2008; Gunningham, 2009; Dögl & Behnam, 2014). Several
empirical studies have been conducted to measure consumers’ awareness toward a company’s
CSR actions and stressed the importance of communication strategies for consumer decions
making process (Singh et al., 2008; Lee & Shin, 2010; Maignan, 2001; Mohr et al., 2001;
Rahim et al., 2011; Gupta & Hodges, 2012).
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Taking all the above mentioned into consideration, this study contributes to our knowledge of
consumers’ awareness towards firms’ corporate environmental responsibility, providing
empirical evidence from Greek consumers. Unlike previous studies, the objective of our
research is to examine the demographic determinants that affect consumers’ awareness of a
company’s CER actions. According to the authors’ knowledge, this current research differs
from prior studies in this field, as it analyzes the profile of consumers that are aware of
companies that adopt CER activities. We focus on firms’ CER because the environment was
found to be the most important concern for stakeholders in a company's CSR efforts (Kassinis
& Vafeas, 2006; Welford et al., 2007), Companies seek to implement CER practices in order
to meet the growing stakeholders’ demand for environmental responsibility (Dögl & Behnam,
2014). Awareness of the company’s activities is a major target of a company’s communication
strategy since stakeholders might use the information to assist their decision-making process
(Bernam et al, 1999). Studies highlighted the need for more communication of company’s
CSR practices to strengthen consumers’ decision making process (Maignan, 2001; Mohr et al.,
2001; Singh et al., 2008; Lee & Shin, 2010; Rahim et al., 2011; Gupta & Hodges, 2012).
Consumers are not well aware of environmental activities adopted by them (Singh et al., 2008;
Öberseder et al., 2013). Thus, we study consumers because we expected that by profiling
consumers’ awareness of the environmental dimensions of a CSR (called CER), companies
can develop their marketing campaigns appropriately and obtain competitive advantage in the
marketplace.
The structure of the paper is as follows. The next section reviews the existing literature. The
successive two sections present the data and the adopted methodology of the analysis.
Subsequently the derived empirical results are presented and discussed. The last section
concludes the paper and present policy implications of the analysis.
2. Literature Review
There is a wealth of research attempting to define what it means for a company to be socially
responsible (see for e.g. Carroll, 1991, European Commission, 2001; 2011). Within this
context studies support that CSR has its theoretical roots in the stakeholder theory (Campbell,
2007; O’Connor & Spangenberg, 2008; Asif et al., 2013; Dögl & Behnam, 2014; Lu &
Abeysekera, 2014). New challenges for businesses in the reformed global marketplace have
been created due to growing competition which is mainly based on efficiency, cost reduction
and consumers’ satisfaction (Asif et al., 2013; O’Connor & Spangenberg, 2008). CSR and
CER are two of the most important features that characterize a “good” company nowadays.
In particular, CSR is marked as a form of investment intended to maximize a firms’ profits.
This can be achieved because the risk and cost of CSR involvement is much lower than its
less social responsible counterpart (Cruz, 2013; Lu & Abeysekera, 2014). However, a
contradistinction of research is focused on the issue how CSR can be effectively integrated
within existing business processes (Asif et al., 2013). Campbell (2007) indicates that a
business should not follow a strategy that can harm its key stakeholders and if it occurs, the
business has to rectify it whenever the harm is discovered. Integration of CSR actions in the
operation of a business requires the knowledge of infrastructure to match the requirements of
stakeholders in a more sustainable manner. Within this context, Mohr et al. (2001) and Rahim
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et al. (2011) mention that corporate socially responsible behaviour includes a broad array of
actions aimed at minimizing damage to the environment, called CER. Consumers’ perception
of the environmental performance of companies is supposed to positively influence their
purchasing behaviour (Grimmer & Bingham, 2013). Companies focus on their
primary
1
stakeholders, however consumers are not well aware of environmental activities
adopted by them (Singh et al., 2008; Öberseder et al., 2013).
The main processes of integration of CSR actions are the “top-down integration” and the
bottom-up integration”. The first perspective’s starting point is the strategic direction which
includes environmental scanning. On the other hand, the “bottom-up” perspective requires for
a business to look beyond internal processes and focus on the broader impact on the
communities (Asif et al., 2013). Similarly, the most successful companies are those that have
incorporated the three sustainability dimensions of economic, ecological-environmental and
equity-social sustainability in their business practices (Amini & Bienstock, 2014).
Nevertheless, there seems to be a lack of knowledge regarding CSR development in Europe
as indicated by Rananger & Zobel (2014). The main difficulty expressed here is the manner
in which CSR has been addressed in the business sector. In addition, there is a lot of research
that supports the positive causality of CSR and financial performance in a business sector
with its relationship not being static but changing over time (Ballester, 2014; Lu et al., 2014).
Human values are an additional important driver of the behaviour of companies (Sidiropoulos,
2013). Several empirical studies have been conducted to measure consumers’ awareness
toward a company’s CSR actions (Gupta & Hodges, 2012; Lee & Shin, 2010; Maignan, 2001;
Mohr et al., 2001; Rahim et al., 2011; Singh et al., 2008). All these studies highlighted the
need for more communication of their CSR practices. In particular, consumers declared that
they had a difficulty to understand the concept of CSR (Rahim et al., 2011; Singh et al., 2008)
and the lack or low level of awareness is confirmed to be a major barrier in acquiring a
positive attitude. Subsequently this will influence them in choosing for a socially responsible
company (Gupta & Hodges, 2012; Lee & Shin, 2010; Maignan, 2001). Lack of awareness is
attributed mainly to difficulties in obtaining information on the CSR actions of a firm (Mohr
et al., 2001), a raised awareness could lead to a higher level of purchase intention (Maignan,
2001). As Bhattacharya & Sen (2004) confirmed, consumers evaluated a company more
positively when provided with information about its CSR record.
The bulk of the research attests that there is a positive influence of CSR actions on the
financial performance of the companies. In this context, most of the studies focused on the
fact that companies which publicize their socially responsible actions can positively impact
consumers’ purchase behaviour (Groza et al., 2011; Marquina & Morales, 2008; Rahim et
al., 2011; Sen & Bhattacharya, 2001; Tian et al., 2011; Wigley, 2008). However, the
influence of CSR on the decision processes of consumers is complex and differentiates
1
A primary stakeholder is defined an individual or group who can affect or be affected by
the actions of a business, such as the distribution of a product or a change to a service
agreement. Primary stakeholders include for example customers, employees, suppliers, etc.
(available at: http://www.businessdictionary.com/definition/primary-stakeholder.html).
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between intention and actual behaviour. More specifically, Tian et al. (2011) found that
awareness of socially responsible actions only had a significant positive effect on the
purchase intention of consumers. Mohr et al. (2001) confirmed that only a limited segment of
consumers considered in their purchasing choice whether the product was made by a socially
responsible company. Similarly, Gupta & Hodges (2012) concluded that price and quality of
the product was a much more important purchasing criterion. Finally, Papadopoulos et al.
(2011) indicated that Greek consumers should be convinced about the sincerity of the CSR
policies in order to influence their purchasing behaviour. CSR practises thus may indirectly
affect the company’s financial performance (Wigley, 2008). Studies on consumer behaviour
suggested that CSR activities generated a competitive advantage to the company, through
brand loyalty and differentiation (Luo & Bhattacharya, 2006; Marquina & Morales, 2008;
Stanaland et al., 2011), influenced corporate reputation, trust, through advertising
(Bhattacharya & Malani, 2013; Öberseder et al, 2013) and therefore consequently benefit
product sales (Bhattacharya & Malani, 2013).
Consumers believed that rewarding companies that adopt CSR activities could be a
motivating factor for other companies to be more socially responsible (Gupta & Hodges,
2012), confirming they were more willing to purchase products from companies that care
about society (Grimmer & Bingham, 2013; Sen & Bhattacharya, 2001) and even willing to
pay more for them (Gupta & Hodges, 2012). However, Bhattacharya & Malani (2013)
concluded that only a minority of the respondents were inclined to pay higher prices for
products of socially responsible companies. In the same context, Gupta & Hodges (2012)
pointed out that although consumers were willing to pay more, they disagreed about the
amount and considered it not right for them to pay for CSR activities. It is estimated that if
the price and the quality of two products were the same, consumers would buy from the
company that acts in an ethical and socially responsible manner (Maignan, 2001; Singh et al.,
2008). However, as Green & Peloza (2014) concluded, the size of the company also affects
consumer’s trust in its CSR actions.
Limited studies have been conducted on the demographic characteristics of consumers who
respond positively to CSR activities. Results indicated that women, higher-education, and
higher-income groups are more supportive of company’s socially responsible actions (Youn
& Kim, 2008). Carrigan & Attalla (2011) found that older consumers are more likely to take
ethical issues into account when purchasing products, whereas Tian et al. (2011) concluded
that consumers with a middle level of income and age would be more supportive of a firm’s
CSR practices.
3. Data and Methodology
This research presents insights into some of the determinants that affect consumers’
awareness towards CSR, focusing on CER actions. Data for the current research were
obtained from a random sample of Greek consumers. Athens is the capital of Greece where
productive business activity is concentrated. The survey took place in the five shopping malls
in the area of Athens, using an anonymous structured questionnaire. As a prerequisite, the
respondents were above 18 years old and an income earner. The sampled consumers at each
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mall were chosen following systematic sample technique. In particular, the researcher chose a
consumer entering the mall at random, and choices thereafter are equals intervals. According
to this method, every fifth consumer entering the mall was interviewed until the number of
interviews stipulated for that mall was completed. In order to collect a more representative
sample, including multiple segments of the shopping population, this survey was conducted
during both weekends and weekdays from 9:00 a.m. to 9:00 p.m. In total, 500 interviewers
were conducted (100 per mall) and a total of 464 questionnaires were fully filled in. The
previously mentioned sampling approach was applied to ensure a representative sample and
taking into consideration the restrictions of the research framework, as well as the costs of
money and time (Schatzman & Strauss, 1973; Miles & Huberman, 1994). The questionnaire
consisted of two sections: The first section included closed type questions on demographic
and economic characteristics of the consumers such as gender, age, educational background
and monthly private income. In the second section, consumers were asked to describe their
attitudes towards firms that adopt CSR and CER actions. Annex 1, presents the questionnaire
used in the survey.
Empirical results are based on the estimation of logistic regression model. Logistic regression
is used for predicting the probability of an event occurring by fitting data to a logit function.
In our case, under the binary logistic model, the estimated value of the dependent variable is
interpreted as the probability that a consumer is aware of a socially responsible company
targeting environmental protection, as identified by the values of the explanatory independent
variables. Therefore, in the empirical study, we employed the following expanded
specification for a consumer’s awareness of a company’s socially responsible activities
targeting environmental protection:
ii
iiiiiio
icsr
envirincomeeducationageagegenderYLogit
7
654321 2)]1[Pr(
(1)
where Υ is a binary variable indicating whether the consumer is aware of a company that
adopts CER activities or not; specifically, the variable takes the value 1 when the consumer
is aware of corporate environmental responsible activities and zero otherwise. Genderi is a
dummy variable accounting for 1 if the respondent is female and zero if male; agei is the
consumer's age; age2i is the square of the consumer's age; education is a dummy variable
accounting for 1 if the respondent has completed graduate studies and zero otherwise;
incomei is the consumer's monthly private income in euros; envri is a dummy variable
accounting for 1 if the respondent participates in environmental friendly actions; icsri is a
dummy variable accounting for 1 if the consumer has previously sought information on CSR
dimensions and εi is disturbance term. The empirical results from the estimation of Eq. (1) are
presented in Table 1 in the next section of this study. Finally, using the following formula we
are able to estimate the maximum age of consumers’ awareness.
0""2
""
)"2"""
21
21
AGEbb
GE
AGEbAGEb
(2)
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4. Results
In this section we present the results of the statistical and econometric analyses to estimate
the determinants that affect consumers’ attitudes toward corporate environmental friendly
practices. From the sample of 464 consumers, 60.1% were women and 39.9% men. Most
consumers had completed secondary education (45.7%), 33% were university-educated and
16.8% had a master degree. Most respondents were between the ages of 41 and 50 years
(49.5%); 22.8% were between 18 and 25 years, 15.5% between 26 and 40 years and the rest
above 50 years
2
. 42.0% of consumers were married. The consumers’ average monthly private,
non-property-related, income was €740.00. The income of 25.0% of consumers varied
between €750 and €1.000 and 33.6% of consumers’ declared income no higher than €500.
However, 14.9% of consumers declared having an income above €1250
3
. 47.6% of the
respondents reported that they were aware of socially responsible enterprises that operate in
Greece and 35.1% could name a socially responsible company aiming at environmental
friendly practices.
4
From the sample of consumers in question, 21.3% had previously sought
information on CSR dimensions. The majority of the respondents (53.9%) participated in
environmental friendly actions (such as recycling, waste management, eco-driving,
reforestation, energy saving, etc.
5
) and 70.9% strongly believed that companies should adopt
CER practices to minimize the environmental damage they cause.
Several interesting results were obtained from the empirical estimation of Eq. (1). Table 1
presents the results of the fitted binary logistic model with respect to consumer’s awareness
of a company’s socially responsible activities focusing on environmental protection.
From Table 1 can be concluded that the variable “income” is statistically insignificant. Thus,
consumers’ income does not affect their awareness towards firms’ CER actions. Contrary, the
variable “age” is statistically significant at a 1% level. In particular, the coefficient of “age” is
0.16 and the relative risk of this particular variable is 1.174, which implies that the
corresponding percentage change is 0.174. Thus in relation to age the odds of consumers’
awareness toward a company’s environmental responsible activities increase by 17.4 per cent,
ceteris paribus. This means that as age of the respondent increases by one year the probability
of awareness of CER activities increases by 17.4%. Applying the formula (2), it follows that
consumers’ awareness of corporate environmental responsible actions reaching a maximum at
40 years of age. A similar result was reported by Tian et al. (2011). This result may imply that
middle-aged persons are more likely to take environmental issues into account when
purchasing products. Concerning the educational level, the result implies that the
corresponding percentage change is 0.934. This means that in relation to highly educated
groups of consumers the odds of consumer awareness to CSR actions increases by almost
0.934 per cent while all other remain fixed. “Gender” results imply that women have an
increased probability of almost 27.1% over men to be aware of companies that adopt
2
Open ended question. Percentages are grouped for better presentation within manuscript.
3
Open ended question. Percentages are grouped for better presentation within manuscript.
4
The respondents that gave a positive answer regarding CSR and CER awareness also named a company that adopt similar
practices.
5
It is expected that consumers reporting a general eco-friendly to be aware to firms’ corporate environmental responsible
actions than others.
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environmental responsible activities, ceteris paribus. These results are in line with those by
Youn and Kim (2008) whose research indicates that women and higher-education groups are
more supportive of CSR actions. Thus, companies should focus their communication
strategies for the adopted CER activities to men and less educated persons so as to gain a
competitive advantage to market place. As expected, the odds of consumers’ awareness of
environmental friendly companies increase by 0.284 and 2.525 in relation to consumers’
general eco-friendly attitudes and consumers’ prior knowledge about CSR dimensions,
respectively. Both, “envir” and “icsr” are statistical significant at a 1% level. Thus, it is
confirmed that CER has a clear connection with CSR, because it indicates its environmental
pillar.
The Nagelkerke R square which is a measure of predictability of the proposed model is equal
to 0.207. The log likelihood statistic is quite high, rejecting the null hypothesis and
concluding that at least one of the estimated coefficients is different from zero. Finally, the
Hosmer - Lemeshow goodness of fit test (HL test) returned a chi-square value equal to 4.12
and a p-value equal to 0.721(>0.05). With a p-value greater than 0.05, HL test indicates that
our model fits the data well.
Table 1. Estimated binary logistic regression of consumer’s awareness of a company’s
environmental responsible activities (yes: 1 no: 0)
Independent variables
Estimated Coefficients
Odds Ratio
eβˆi - 1
Constant
4.62***(4.24)
-
-
gender
0.24**(2.10)
1.271
0.271
age
0.16***(2.77)
1.174
0.174
age2
-0.002***(-2.72)
0.998
-0.002
education
0.66***(2.83)
1.934
0.934
income
0.26(0.23)
1.297
0.297
envir
0.25***(2.70)
1.284
0.284
icsr
1.26***(5.01)
3.539
2.539
Log likelihood
-260.821
Nagelkerke R2
0.207
Hosmer and Lemeshow
4.12 (0.721)
Note: ***, ** represent levels of significance at 1% and 5%, respectively. Z statistics are presented in
parentheses.
5. Conclusion
This paper has focused on providing insights into which factors affect consumers’ awareness
towards companies that adopt socially responsible activities aimed at environmental
protection in Athens, Greece. For this purpose logistic regression model was estimated to
identify the socioeconomic profile of the consumers that are aware of environmental
responsible companies. The empirical results suggest that middle-aged people and women are
more likely than others to be aware of a company’s CSR actions targeting environmental
dimensions, named for the purpose of the study CER actions. Further, it is estimated that
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income is not a predicted variable of awareness of corporate environmental friendly strategies.
As consumers pay attention to companies’ environmental strategies, more companies would
be motivated to adopt a corporate environmental friendly image to gain competitive
advantage and try more to satisfy the requests of their customers concerning better
environmental performance. In this context, profiling customer groups would have multiple
useful economic and environmental policy implications for firms’ strategic plan.
A number of limitations of the current study can be noted, as well as some directions for
future research. First, the sectional nature of this study might affect the interpretation of our
empirical results. The analysis is based solely on self-reported intentions on the part of
consumers without being able to verify their claims, regarding corporate environmental
responsible actions adopted by firms. Nonetheless this is something common in all types of
survey-based researches. Second, the study is focused on analyzing consumers’ awareness
towards firms’ CER, without being able to examine purchasing preferences from
environmental responsible firms. An understanding of consumer purchasing choices of CER
at the firm level is important in the development and implementation of successful CER
programs and enhancement of sustainability, since consumers buying in the midst of
economic crisis products may not have as a market criterion the environmental practices of
businesses but the cost. Thus, it is suggested for future studies to empirically explore
consumers’ awareness-buying outcome towards corporate environmental responsible firms,
as this was not the scope of this current research. Future research on this topic, based on
different time and countries are highly recommended. Finally, it would be important for
policy makers to examine the reasons behind the managerial decisions not to adopt CER
activities, so as to formulate effective motives to boost companies’ environmental
performance.
Acknowledgements
The authors would like to thank the Editor and the three anonymous reviewers for their
insightful and constructive comments from which the present paper greatly improved. Any
remaining errors or deficiencies are solely the authors’ responsibility.
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Appendix
Appendix 1. Survey Questionnaire
Section A.: Demographic and economic characteristics
Q1. Your gender: Male [ ] Female [ ]
Q2. Your age: __________years old
Q3. Your education: Elementary [ ] Secondary [ ] Bachelor Degree [ ] Master/ PHD degree [ ]
Q4. Your family status: Married [ ] Other [ ]
Q5. Your monthly private income: _______ €
Section B: Attitudes towards firms’ CSR and CER actions.
“Corporate Social Responsibility (CSR) is a process for firms to integrate social,
environmental, ethical and human rights concerns into their operations and core strategy”
(European Commission, 2011, page 6)
“Corporate Environmental Responsibility (CER) is a process for firms to adopt practices that
benefit the environment on a long-term basis or mitigate the adverse impact of businesses on
the environment that go beyond those that companies are legally obliged to adopt. Examples
of company practices include recycling programs, carbon emissions reduction programs,
programs for waste management, auditing, green technologies, etc.” (Mazurkiewicz, 2004;
Gunningham, 2009, 215)
Q6. Are you aware of companies in Greece that engage in CSR activities?
Yes [ ] No [ ]
Q7. If yes, please name one: ________________________________
Q8. Have you ever sought information on a company’s CSR actions?
Yes [ ] No [ ]
Q9. Are you aware of companies in Greece that adopt CER activities?
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Yes [ ] No [ ]
Q10. If yes, please name one: ________________________________
Q11. Do you think that companies should adopt CER activities to minimize the
environmental damage they cause?
Yes [ ] No [ ]
Q12. Do you usually participate in environmental friendly actions (such as recycling, waste
management, eco-driving, reforestation, energy saving, etc.)?
Yes [ ] No [ ]
Thank you for finishing the survey.
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