By Roxanne Batty, April 2015

 

Times are changing in the world of retail. “Conscious consuming” or “Ethical Consuming” is not a new phenomenon, but it can be perceived by some businesses as a niche market that is of no concern to them.

However, recent research has shown that human rights and social consciousness is increasingly becoming a focal point for consumers, and has a significant impact as to whether or not people choose to buy a particular product. Consumers are asking tough questions, and expecting legitimate answers.

Ethics Matter

While profit is a necessary ingredient for business success, according to the 2015 Edelman Global Trust Barometer, four-in-five respondents want to see profit combined with something more – a higher societal purpose. It is no longer feasible for a business objective to be purely about selling a certain product. “People expect companies to possess a purpose beyond profits. And it is this purpose, when articulated and placed at the center of a brand experience that builds trust and establishes connections that keep a business relevant.”

In 1986 Anwar Fazaz, president of the International Organisation of Consumer Unions, noted:

“The act of buying is a vote for an economic and social model, for a particular way of producing goods. We are concerned with the quality of goods and the satisfactions we derive from them. But we cannot ignore the conditions under which products are made – the environmental impact and working conditions. We are linked to them and therefore have a responsibility for them.”[i] .

Terry Newholm in 2000 suggested that we increasingly express our ethics through consumption precisely because consumption, and the construction of our self image, has become one of our biggest time consuming activities. Rob Harrison proposes several factors that have increased the growth of ethical consumer behavior. These are, among others, the globalization of markets, the rise of campaign pressure groups, the social and environmental effects of technical advance and the shift in market power towards consumers[ii]. Evidently, ethics matter.

A growing trend

A survey by Nielsen, an American company specializing in global consumer research, shows that this trend in consumption is far bigger than a small ‘niche’. In 2011, it was found that 66% of consumers preferred to buy products and services from companies that implement programs to give back to society. Preference was found in other matters too – people preferred to work for these companies (62%) and invest in them (59%).

Not only this, but 46% of consumers said they were willing to pay extra for products and services from these companies. There was also a 9% rise in this trend in just 3 years.

More and more people now expect companies to be socially responsible, and they are willing to pay for it. But what does being socially responsible really mean, and where is the best place to start?  Because we live in an information age, where knowledge about a company and potentially their supply chain can be readily found at the click of a few buttons, companies need to be more aware about not only what is happening within their business but also behind the scenes in their own production line. However, the focus needs to shift away from avoiding scandal and naming and shaming. It is now important to improve our knowledge about what is happening around us, and show what they we are doing in order to prevent and mitigate the impacts that they may have.

Business and Human Rights

Even though a company may put in its best efforts and have great intentions, it is inevitable that all companies will have some level of adverse impacts on human rights. But this doesn’t have to be seen as a negative thing. When these impacts are properly recognized and remedied, a business can considerably improve their workplace, their ethical message and show that they consider the welfare of their workers and the wider society around them to be of the utmost importance. This information, in turn, will improve their wider reputation and attract the growing mass of consumers who care about what they buy, and who they buy it from.

Respecting human rights is important in itself, but it can also be a lucrative business opportunity. However, CSR can be a complex and somewhat confusing area for businesses to delve into and reform. A guide that has increasingly come under the spotlight since 2011 is the UNGPs, which provide a universal UN approved guideline on the way in which to consider and work with impacts on human rights as a business.

It seems it could be worth implementing them. More consumers are drawn to products sold by an ethical business, and more people will want to work with and invest in a company that respects human rights. Quite clearly, it has never been a better time to put social purpose at the forefront of the business agenda – which is a positive development for business, consumers and wider society alike.

[i] Cited in Harrison, Newholm & Shaw. (2005) The Ethical Consumer, page 25

[ii]Cited in Harrison, Newholm & Shaw. (2005) The Ethical Consumer, page 5