What Does Ethical Consumerism Mean for Business?

by Linda Fisher Thornton

What is Ethical Consumerism?

Ethical consumerism means that more customers are choosing to purchase goods that are ethically sourced, ethically made and ethically distributed. In her article “Ethical Consumerism and Conservatism: Hand in Glove” in the Heinz Journal, Jacqueline Payne describes the ethical consumer this way:

“An ethical consumer is someone who buys things that are produced ethically. Depending on the context, ethical production may mean producing something that is recycled, using labor that is produced in facilities without the use of slavery and child labor, or processing food that is raised organic or free range. If you buy one of these products, you could be an ethical consumer and not even know it… or you may not be one. However, the whole point of the ethical consumerism movement is that you ‘know’ what you are buying and that you buy things that are produced ethically because not ‘knowing’ leads to abuse and exploitation.”

Jacqueline Payne, “Ethical Consumerism and Conservatism: Hand in Glove,” The Heinz Journal, Carnegie Mellon University

What Do Ethical Consumers Want?

Consumers are increasingly purchasing ethically sourced and prepared foods. In Top 10 Global Food Trends, Fiona Haynes, lowfatcooking.about.com, says that “More people want to eat eggs, meat or chicken that was raised or killed humanely or to know that the people who grew the coffee they buy were fairly paid.”

In “Ethical Consumerism and the Purchase of Human Rights Clothes” Human Rights Support describes the increasing consumer demand for ethically produced clothing:

An industry that is seeing a push for high-quality products that are produced in a way that supports human rights is the clothing industry. Consumers are demanding human rights clothes and looking for ways to purchase them.

“Ethical Consumerism and the Purchase of Human Rights Clothes”, Human Rights Support, cdhrsupport.com

Trendwatching.com’s 12 Crucial Consumer Trends for 2012 decribes an “eco-cycology” trend in which “Brands will increasingly take back all of their products for recycling (sometimes forced by new legislation), and recycle them responsibly and innovatively.” According to Trendwatching.com, “trading in is the new buying.”

In “Top Trends for 2012: Purity, Authenticity and Sustainability Lead the Way” Innova Marketing describes the customer demand for pure products, and points out that in a customer’s mind, “sustainability is a given.”

According to GlobeScan.com, even consumers in developing companies see the value of the new “green economy” where doing business sustainably is the norm:

GlobeScan’s and SustainAbility‘s most recent survey of global consumers, conducted in collaboration with National Geographic, shows that those in emerging economies are even more likely than their developed-world peers to reject the notion that environmental responsibility and economic prosperity are mutually exclusive.

The survey among consumers across 17 countries asked them to say whether they thought a Green Economy would be more or less effective than today’s economy in addressing a range of environmental and social challenges—and found that, globally, consumers thought a Green Economy would be more effective in all areas except for the creation of low-paying jobs.

Developing World Consumers More Upbeat About Economic Impact of a Green Economy, GlobeScan.com

How Should Businesses Respond?

Ethical consumers want much more than a good product for a good price. They also look for these things in a company, brand or product:

• Natural, Pure Ingredients
• Ethical Sourcing, Production and Distribution
• Clear Information About Nutrition
• Transparency
• Fair Labor
• Honoring Human Rights
• Protecting Human Health
• Respecting the Environment
• Sustainability
• Ethical Marketing and Advertising
• Renewable/Recyclable Packaging
• Giving Back to the Community and Society

Businesses need to carefully examine how well they are meeting the evolving ethical expectations of consumers. They will be simultaneously responding to ethical consumerism trends and figuring out “how to remain profitable yet sustainable in a flat economy.” (Experts Split on Whether Growth and Sustainable Consumption Compatible, GlobalScan.com)

How far ahead or behind is your company in responding to today’s ethical consumer? Use the questions below to explore how ethical consumerism will impact the way you do business in the next 5 years.

Questions for Discussion:

1. How might the ethical consumerism trend affect our business in the next 1-5 years?

2. What will we need to change to keep up with what ethical consumers expect?

3. How will responding to these trends help our business and our customers?

Resources:

8 Reasons Why You Should Take Ethical Consumption More Seriously, TomorrowToday.uk.com

Ethical Consumer: From Margin to Mainstream, EthicalConsumer.org

12 Crucial Consumer Trends for 2012, Trendwatching.com