Should we deal with only ethical customers?

This week I attended our CSR board meeting. My brand takes corporate responsibility seriously – the chief executive takes a personal interest, as does the board. I’m sure this is common in many companies these days. Brand reputation is a defining point in meeting the needs of demanding customers.

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But one item on the agenda caused quite a stir. We have been very public in dealing only with ethical suppliers – buying products and services from those that meet the standards we want to be seen to be offering our customers. However, the board chair proposed going a step further by dealing only with ethical customers, turning away those that do not operate on these principles.

Immediately, the sales director started squirming in his chair and the finance director began having palpations. Despite recent hints of recovery, the truth is that the economy is bouncing along the bottom, and we, like all other brands, have to fight for every sales opportunity.

So I was intrigued to read in the press that one leading bank has asked 40 diplomatic missions to close their accounts “as part of a programme to reduce business risk”. Early in my career, I worked for another high street bank, where we piloted ‘Project Pruning’, which involved running a profitability analysis of our customers, and asking the least profitable to go elsewhere. Needless to say there was an outcry and the pilot was stopped.

In both cases, the driver was financial – reducing risk/maximising profit. In the case of my business, the proposal is based on something less tangible. It sort of links to the current debate between retailers asking the ‘lads’ mags’ industry to cover up, if they want them to stock their titles, and the wrangling over payday loans, despite appearing to meet consumer demand.

This debate goes to the heart of CSR. If we are committed to what we say, this is a fair approach, effectively forcing others to become more ethical by stifling their ability to get goods and services. But in a climate where there will be someone else willing to serve these customers, are we merely cutting off our nose to spite our face? 

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