Ethical stances must be for real

A principle is not a principle unless it costs you something, as a famous American adman once said. The truth of this observation is now beginning to dawn on some of Britain’s leading retailers.

At issue is ethical marketing. Many UK manufacturers and retailers would rather not enquire closely into the circumstances in which their products, or raw materials, are resourced in the Third World. And, up to a point, their reluctance is entirely understandable. Increasing globalisation may be a fact of economic life, but it is an uncomfortable one. It involves, for example, relations with people in faraway countries over whose political and social conditions we can have little direct influence.

But like it not, the issue of exploitation has crept onto the agenda. It has been pushed there by consumer concern and, more improbably at first sight, pressure from shareholders.

Shell has felt the ire of the mobilised consumer at first hand and is now seeking to accommodate various powerful pressure groups – some of them completely at variance with its strategic aims. A few years ago, it was the shoe manufacturers Adidas, Reebok, Hi-Tec, Puma and Nike who shared the spotlight in an exposé over the minimal wages paid to their Third World labourers. Most recently, Tesco got a rough ride from a BBC documentary which disclosed, among other things, that its Zimbabwean pickers were paid only 1p for every 99p packet of mangetout sold in the UK.

Increasing militancy among consumers is being reinforced by the presence of ethical funds – over 30 major ones – operating in the City. These in themselves are unlikely to have a decisive impact on the way companies go about their business – there are still too few of them. But they do make Third World trading issues harder to marginalise as ‘sensationalist’.

Sure enough, a constructive approach is beginning to emerge. A number of companies have set up teams of ‘ethical advisers’ to audit corporate conduct in trading relationships. Most conspicuously, Sainsbury’s and the Co-op are participating in a project with the Fair Trade Foundation – a consortium of development agencies – which would seem to commit them to internationally recognised standards of conduct. Less forthright, but nonetheless significant, is Tesco’s decision to set up a team of advisers to monitor the ethical content of goods it sells in its stores.

But these major brand names, and those who follow them, must act with extreme care. Ethical marketing is not simply about removing the sting of adverse PR; or scoring some tactical competitive advantage over competitors. If the commitment is not there, consumers, aided by the media, will soon spot it. Hypocrisy, publicly exposed, can have some very nasty consequences for corporate reputations.

Cover Story, page 26

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