Despite the recession and the bleak views of sceptics, the news is good for ethical businesses. According to the Co-operative, the ethical market was worth £43.2 billion in 2009, more than tripling from a decade earlier when the figure was £13.5 billion.
The high-profile conversion of brands such as Cadbury’s Dairy Milk and Starbucks to fair trade cocoa and coffee respectively has helped promote corporate reputations and boost the availability of ethical products. Fair trade sales totalled £749 million in 2009 and the movement has been influential in raising consumer awareness of social, environmental and ethical issues and more importantly, the power of their spending choices.
A breakdown of sectors provides an interesting read and a better insight into consumer behaviour as well as corporate activity. The increase in standards and certifications, coupled with strong commitments from retailers and restaurants has meant that the availability of an ethical option has influenced consumer spending. Where there has also been the introduction of regulation and legislation, for example in developing environmentally friendly products, corporate activity and consumer buying has followed. A nudge in the right direction does obviously influence corporate and consumer behaviour.
We know that companies which recognise the business case for being more ethical in what they do and what they produce enjoy real benefits to their bottom line and their reputation. M&S continues to receive accolades for the changes that Plan A has initiated in the business and Ethical Consumer has recognised it as one of the greenest supermarkets, encouraging readers to shop there. That’s quite an endorsement.
However, as McKinsey pointed out in their global survey (March 2010), despite more than 50% of executives considering sustainability as “very important”, there remains a reticence to take action. Only 30% feel that their companies are actively seeking opportunities to embed sustainability into their business. Given the hard data on the growth of the “green pound”, isn’t it about time that companies realise the power of ethics and of the ethical consumer?
Deepa Mirchandani is a consultant at Corporate Citizenship
The Co-op and M&S have been named the UK’s ‘greenest’ supermarkets by Ethical Consumer’s new buyer’s guide, released 17 December. Nineteen leading supermarkets and convenience store chains were assessed through corporate social responsibility reports and policies, with a stark divide emerging between the top two performers and the other 17 companies. At the opposite end of the spectrum, Asda, Tesco and Netto were identified as the three worst performing companies. Stand-out policies include the Co-op’s fish sourcing policy (aligned with the Marine Stewardship Council) and its aim to use 98% renewable energy, while M&S was noted for its policies on palm oil and its target to use non crop-derived biofuels in its fleet.
The Co-operative Financial Services’ annual Ethical Consumerism Report 2010 values the UK ethical market at £43.2 billion in 2009, compared with the pre-recession figure of £36.5 billion in 2007, an increase of 18%. The new report compiles sales data for the ethical food, household goods, travel and finance sectors, thus combinING the value of both product and capital markets. Ethical finance increased by 23% to reach £19.3 billion, while sales of Fairtrade certified products grew by 64% to £749 million, boosted by the increased mainstreaming of Fairtrade by brands including Starbucks, Cadbury and Nestle. In contrast, UK sales of organic food fell by 14% over the two years to £1.7 billion.
Consumers across Europe call for ‘fair and green’ mobiles
MakeITfair campaigners throughout Europe handed over thousands of signatures to mobile phone network operators such as T-Mobile, Telefonica and Vodafone in December to highlight growing consumer demand for mobile phones that are ‘fair and green’. The campaign group alleges harsh and exploitative working conditions across the mobile phone supply chain, both in factories and mineral extracting mines across the world, with poor conditions claimed to have caused the suicide of 14 workers at the Foxconn factory in Shenzhen, China, in 2010. Over 7,000 signatures and digital postcards were collected from consumers across Europe.
The results of an annual survey on the British public’s attitudes to ethics in business were released by the Institute of Business Ethics (IBE) in December. Carried out by Ipsos MORI on behalf of the IBE, the survey indicates a 7% increase in public perceptions of business ethics compared to 2009, reversing the downward trend seen between 2007 and 2009. Despite the upswing, figures highlight that 41% of respondents still believe British businesses are not acting ethically. From a sample of 1,019 adults and 13 identified issues, the key priorities were executive pay (35%); the need for employees to be able to ‘speak up’ about company wrongdoing (24%); the issue of sweatshop labour (23%); and environmental responsibility (21%). Bribery and corruption and advertising practices were rated the least important at 11% and 6% respectively.
In a bid to promote low-carbon transport, the UK government revealed [14 December] the first nine electric vehicles for which the purchaser will be eligible to receive a subsidy of up to £5,000. The government has pledged £43 million to encourage British motorists to move to electric vehicles. Those to receive subsidies have been announced as: Mitsubishi iMiEV, Daimler smart fortwo electric drive, Peugeot iON, Citroen CZero, Nissan Leaf, Tata Vista electric vehicle, Toyota Prius Plug-in, Vauxhall Ampera and General Motors Chevrolet Volt. The scheme will run from January 2011 through until the end of March 2012 and more cars will be added to those eligible this year.
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