In 2017 we featured this guest blog written by Sian Conway of #EthicalHour on what it means to be an ethical business.
Now as we step into the first days of 2020 we’ve decided to revisit this issue and share our thoughts with you.
So, what does it mean to be an ethical business in 2020? Why does it matter? What have people been talking about? What remains the same? What has changed?
What is an ethical business?
The core definition of what it means to be an ethical business remains unchanged.
A business that takes into consideration the effect of its activities on Earth and the humans that reside on it and takes steps to minimise any negative impact on them. There are many types of businesses, and a for-profit business can be just as ethical as a social enterprise.
Why does it matter?
In 2018, the amount spent by consumers in the UK on ethical goods and services totalled over £83 billion which is a steep increase from £38 billion in 2015. Sectors such as food and drink, beauty and clothing saw an increase in spending. Individual household spending on ethical products grew from £202 annually to £1278 in 2018.
Every generation has its favourite cause. Research by Accenture showed that baby boomers are concerned about plastics and recycling while younger generations care more about social mobility, immigration and poverty. Knowing your customer and the causes that matter to them is critical.
Another key takeaway from that study was that 62 percent of customers want companies to take a stand on current and broadly relevant issues like sustainability, transparency or fair employment practices.
What have people been talking about?
Ethics is such a personal thing because it describes what an individual considers to be decent conduct. Professional ethics defines what a group of people consider to be decent conduct for a business, and for individual actions while representing a business.
Supply chain, provenance, fair wages, good working conditions, animal rights, impact on the environment and how businesses use their profits have underpinned the discussions surrounding ethical ways of business, lifestyle and investment.
For example, a key turning point in the fashion industry was the Rana Plaza collapse in 2013, which highlighted some of these very issues.
In recent years, the market for ethical investments has grown. People can choose to invest their money in line with their values and earn a decent return while encouraging companies to behave more ethically and positively.
What has changed?
The ethical consumer.
The typical ethical consumers are now (often younger) socially engaged, knowlegeable people who feel strongly about one or more ethical issues which influence their focus during purchase. They demand greater accountability and transparency from brands, and will often research a brand before deciding to buy.
Statistics are their friend, not plastics and they are increasingly skeptical of greenwashing. They are interested in Fair-trade, cruelty-free and if your brand gives back in some way to whether to the environment or disadvantaged people, or even to local communities.
The ethical consumer is also vocal and believes that they can be part of the change. According to Accenture, 55% of UK consumers believe their individual actions, such as boycotting a company or speaking out on social media can make a difference in the behaviour of companies.
Bigger companies have responded to this increased scrutiny from ethical consumers by buying smaller ethical brands and developing ethical alternatives to already existing products.
What does this mean for ethical businesses?
1. Be authentic about your ethics.
If you are an ethical business, show this clearly on your website and marketing. Make sure that information ethical consumers seek is easily available. Things like supply chain and provenance are important, so be aware of yours. If you give back to a cause, highlight that.
Consumers want you to take a stand on issues they care about, but they also want to hear about you. Who you are, what you do, why you do what you do and above all, what you dream of for your business and for the world.
2. Seek accreditation from relevant organisations.
A study by Wine Intelligence discovered that 9 out of 10 UK consumers now recognise the Fairtrade mark. In keeping with this knowledge, all wine retailers on the high street carry ranges of Fairtrade wine that are clearly marked.
A little shameless self promotion – Blue Patch (that’s us!) is a collective of sustainable businesses from the British Isles. Our logo marks you as a British brand/business that is committed to sustainability, with values in alignment with ours. We are a social enterprise that aspires to put planet and people right up there with profit by investing our surplus profit into renewables. If you’ve got our logo, display it proudly!
3. Take steps in the right direction.
Have you been meaning to switch to renewable energy for your business or home? Do it. Thinking about packaging? Try plastic-free. Hiring someone? Pay them a decent wage.
After all, change doesn’t happen in a day, but the journey of a lifetime begins with a single step.
For business owners:
Want to know more about Blue Patch and our work? Click here.