The Rise of the Ethical Consumer
Seidman
Out of the ashes of our recession, the “ethical consumer” has risen — or so says a recent TIME cover story:
There is a new dimension to civic duty that is growing in America — it’s the idea that we can serve not only by spending time in our communities and classrooms but by spending more responsibly. We are starting to put our money where our ideals are.
This means consumers in America care more about where a company sources its materials, the manner in which it treats its workers and how transparently it operates in our interconnected world. “People have been trading in their SUVs for Priuses, buying record amounts of fair-trade coffee and investing in socially responsible funds at higher rates than ever before,” says the story. And companies are coming to understand that paying attention to this changing mindset can be very good business. Many companies are now even racing to “outgreen” each other, a competition that is good for their bottom lines and the environment.
Consider TIME’s evidence that we are indeed at the start of a “Responsibility Revolution”:
- Since 1995, the number of socially responsible investment (SRI) mutual funds, which generally avoid buying shares of companies that profit from such things as tobacco, oil or child labor, has grown from 55 to about 260. SRI funds now manage approximately 11 percent of all the money invested in U.S. financial markets — an estimated $2.7 trillion.
- Of the 1,003 adults polled by TIME this summer, 82 percent said they have consciously supported local or neighborhood businesses this year.
- Nearly 40 percent said they purchased a product in 2009 because they liked the social or political values of the company that produced it.
- Nearly half of Americans said protecting the environment should be given priority over economic growth — and this comes in the midst of a recession and historic unemployment.
- Seventy-eight percent of those polled said they would be willing to pay $2,000 more for a car that gets 35 m.p.g. than for a similar one that gets only 25 m.p.g.
- A 2007 Goldman Sachs study found that companies with a strong emphasis on sustainability outperformed the market, often by a large margin.
- A recent PricewaterhouseCoopers report said companies that report sustainability data get better returns on their assets than those that do not.
Although impressive, the TIME article rightly states that we are just at the start of a long climb: “Only 59 percent of the 1,000 largest U.S. companies have publicly available environmental policies. Fewer than 8 percent of companies go to the trouble of having a third party verify their CSR reports, which many consumers don’t bother to read.”
What is clear is that consumers are taking into account how well a company lives its values consistently and whether or not it acts as a good global citizen. They no longer want to purchase products and services that aren’t sustainable and desire those products and services that inspire and add to the creation of a more sustainable world.
In the Responsibility Revolution, as I’ve written about before, the companies that win will be the ones that can foster a culture that acts, thinks and behaves according to values and principles. By shifting their mindset to sustainability, the business leaders who get ahead will stop thinking about today’s needs and accumulating more or spending more than competitors; instead, they will think about today’s needs in the context of tomorrow.
And you don’t have to be a new company, a small, nimble or progressive organization or even a nonprofit to become sustained by values and culture. Procter & Gamble, the largest consumer products company, recently announced a new business strategy to jumpstart growth: P&G will be guided by values, principles and a sense of purpose. Not bad for a 172-year-old company.
According to TIME, “[There] is evidence of a changing mind-set, a new kind of social contract among consumers, business and government. We are seeing the rise of the citizen consumer — and the beginnings of a Responsibility Revolution.”
Amen and long live the Revolution!
Last 5 posts by Dov Seidman
• The Economy: Don't Hit the Reset Button - May 19th, 2010
• Is There 'Honest Tea' on Wall Street? - May 14th, 2010
• Inspirational Shame in the Era of Behavior - April 14th, 2010
• Philosophy Is Back in Business - January 13th, 2010
• How to Behave Our Way Out of Crisis - December 9th, 2009
