Make the most of your ethics

Companies cannot afford to ignore global environmental or humanitarian issues, as they are of great importance to consumers. But they must be wary of thinking that all ethical shoppers are the same.

Next month, the G8 summit comes to the UK as world leaders meet to discuss global poverty and environmental issues. At the same time, pop stars the world over are calling for an end to poverty, through the Live 8 concerts. Friends of the Earth launched The Big Ask campaign at the end of last month, urging the public to lobby government to reduce carbon emissions (MW May 26) and the week before saw Greenpeace activists invade a Range Rover factory to demonstrate against its “gas-guzzling” 4x4s.

Environmental and ethical issues may be making headlines, but how much do consumers really care? And to what extent do ethical issues influence their lives and shopping habits?

Statistics from the National Consumer Council reveal that 90 per cent of people in the UK are happy to do their bit for the environment, and research from Ipsos UK, included in State of the Nation by the Association for Qualitative Research, confirms there has been a conscious shift among consumers from the materialism of the late 20th century to awareness of and concern over the environmental and social impact of products and corporations’ practices.

Increased media coverage has rendered global issues more personal and the way products are made and the companies responsible for them are now key considerations for many consumers, influencing their buying decisions and brand perceptions.

In a recent study by Ipsos UK’s Capibus for SEEcompanies.com, a website where consumers can research the ethicality of individual businesses, 65 per cent of the adults interviewed said they want to know more about companies’ social and environmental records.

Cost is perceived as a barrier to being ethical, as people assume that environmentally friendly products are more expensive, yet 63 per cent said they were prepared to pay more for ethically sound products. This figure was higher among ABC1s, but over half of DEs also claimed they would pay more. The over-50s appear to be more willing to pay extra for ethical products, but the younger generation is not far behind.

The trend towards ethical consumerism is emerging as a code of conduct rather than a fad, and marketers should monitor this transition. Brands have a real chance to tap into people’s growing sense of altruism. Yet it is important to understand the differences among environmentally aware, ethical consumers. The Ipsos research reveals two distinct groups: “ethical hardcores” and “ethical lites”. Each group has very different motivations, and marketers should not make the mistake of addressing them as a homogeneous whole.

Ethical hardcores research companies and their practices thoroughly before buying their products. They see ethical consumerism as a way of life, whatever the sacrifice, and resent what they see as the mainstreaming of ethical consumerism. Ethical hardcores view ethical lites as people who adopt a version of ethical that is easy to incorporate into their lifestyles.

Ethical lites counter that they are time-poor. They want to do their bit but don’t have the time to research products or companies any more thoroughly than they do already. Three-quarters of ethical lites say it is difficult to know which brands or companies meet high ethical standards.

People see government and industry as key players in making day-to-day ethical consumerism easier. They are also seen as having a powerful role in promoting more sustainable products, developing renewable energy sources and reducing environmental impact by cutting emissions or reducing packaging. Consumers also want more access to, and choice of, sustainable goods and services, and to be able to choose from a range of sustainable products.

But a word of warning for marketers and their companies: it is critical not to overplay the effects of corporate social responsibility. Two-thirds of those sampled in the Capibus study suspect some companies pretend to be ethical in order to charge more or sell more products, and 73 per cent need proof that a company is ethical. It’s also worth noting that 80 per cent of those interviewed claim they would trust a company more if it was honest about its policies and practices, even if they did not agree with them.

Raymond Marks, managing director, VAR international:

Consumers do care about environmental and ethical issues when making choices, but it’s in their hearts and minds. This does not always translate to their actual buying decision – people’s major consideration is how much choices affect their wallet. Yet caring may not be enough. It is essential that ethically sound products and brands demonstrate that they are as good as, or ideally better than, other products. The challenge for marketers is to tap into consumers’ goodwill and to communicate the tangible benefits of their products if they are to encourage sales.

Trends in edited by Nathalie Kilby. Charlotte Parkinson, associate director at Ipsos-Insight Qualitative, contributed to this week’s Trends insight.

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