Ethical consumerism, does it work for business?

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Ethical consumerism

Accoridng to IGD, Ethical Consumerism can be defined as the practice of purchasing products and services produced in a way that minimises social and/or environmental damage, while avoiding products and services deemed to have a negative impact on society or the environment.

From the point of view of ethical consumerism, by choosing certain products over others, or even whether to purchase at all, consumers can choose or reject particular environmental and labour practices and make other value claims based on the ethical values they hold.

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Examples of Ethical consumerism:

According to Britannica, some of the successful campaigns by ethical consumer movements have popularized dolphin-free tuna, foods that are free of genetically modified organisms (GMOs), sweatshop-free clothing, fair-trade coffee, cosmetic products free from animal testing, and conflict-free diamonds.

Why Ethical Consumerism?

In general, as mentioned by WebMD people tend to embrace being more ethical consumers focus on a few main categories of issues, including:

  • Human rights: child labor, fair trade, livable wages, and workers’ rights, health, and safety
  • The environment: climate change, recycling, renewable energy, sustainable farming, ocean conservation
  • Animal protection: humane treatment, factory farming, habitat preservation, animal alternatives, and vegan friendliness
  • Community involvement: family farms, local businesses, sustainable growth, campaign contributions, political corruption
  • Social justice: harassment and discrimination (based on race, gender, age, sexuality, ability, religion, ethnicity), unethical business practices, illegal activities, executive pay

Its found by Lightspeed that the majority of consumers are willing to put their money where their mouth is and combat pressing environmental issues through what they choose to purchase. Therefore, there are the growing economic opportunity of commodity activism (when companies align themselves with a stance on a political or social issue as a means of winning consumers who share that point of view) which present as an opportunity for businesses!

Look up for the trend in Ethical Consumerism:

Ethical trends in business are gaining momentum. Here are four ethical trends which you may expect to find in businesess:

  • Alternatives to single-use plastics
  • Ethical veganism
  • Eco-friendly supply chain practices
  • Sustainable order fulfilment

But, some businesses might see that as a “threat” or a loss of income when people are more conscious of their purchasing habits or practise “ethical consumerism. So, does ethcial consumerism works for businesses?

We think that it is still plenty of business opportunities around with the raising awareness of civic society on ethical consumerism.

Imagine if your competitors have are all pessimism about ethical consumerism, but you know better. You know consumers have ethical conscoiusness, and you know you can help them to embrace this lifestyle. You realize that past market share doesn’t have to mean consumers aren’t looking forwward for the chance to do good while they spend money. By remaining optimistic about ethical consumerism as a business, you have both made a difference in a larger sense, and you have found a competitive spot where you can grow profits and your brand.

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Corporate Sustainability, is this a new concept?

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What is Corporate Sustainability?

Corporate sustainability is an evolving corporate management paradigm. While corporate sustainability recognizes that corporate growth and profitability are important, it also requires the corporation to pursue societal goals. Societal goals specifically those relating to sustainable development — environmental protection, social justice and equity, and economic development. Click here to know the 3 ways of sustainable development.

Below, we will share the concept of corporate sustainability from 4 established concepts:

1) Sustainable Development

Sustainable development is a broad concept that balances the need for economic growth with environmental protection and social equity. In Our Common Future, it is being recognized that the achievement of sustainable development could not be simply left to government regulators and policy makers only. It also recognized that industry had a significant role to play.

As a result of that, many businesses have now embraced and support the principles of sustainable development.

2) Corporate Social Responsibility

Next, CSR deals with the role of business in society. Click here to learn more about Corporate Social Responsibility (CSR).

3) Stakeholder Theory

Stakeholder is defined as “any group or individual who can affect or is affected by the achievement of the organization’s objectives.” The basic premise of stakeholder theory is that the stronger your relationships are with other external parties, the easier it will be to meet your corporate business objectives; and vice versa.

Nevertheless, strong relationships with stakeholders are those based on trust, respect, and cooperation.

4) Corporate Accountability Theory

Accountability is the legal or ethical responsibility to provide an account of the actions for which one is held responsible. The contribution of corporate accountability theory to corporate sustainability is to help define the nature of the relationship between corporate managers and the society. This theory also sets out the justification why companies should report on their triple bottom lines, not just financial performance.

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How can business response to COVID-19?

holding card with COVID-19

“This is not just a public health crisis; it is a crisis that will touch every sector. So, every sector and every individual must be involved in the fights,” quoted by Dr. Tedros Adhanom Ghebreyesus, Director-General of World Health Organization (WHO).

The coronavirus diseases (COVID-19) pandemic posed a massive global health disaster, economic and social crisis. What are the impacts of COVID-19?

During a critical period like the COVID-19 pandemic disaster filled with fear and uncertainty, the people worldwide are strongly committed to working together and supporting each other in every way possible, including business communities.

Businesses can engage in CSR programs

Business should endure various initiatives to help their employees, customers, and communities during this crisis period through the
various CSR programs as they did before.

CSR is treated as an excellent tool for accomplishing sustainable development by offering a win-win strategy. CSR also permits companies to enhance their financial performance and, at the same time, deliver abundant social benefits that can fuel the people to survive during the COVID-19 pandemic period and overcome the crises.

These CSR actions confirmed that the business and society are intertwined (McLennan & Banks, 2019), as well as it is the best neighbor of the community and vice versa.

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Corporate social responsibility (CSR) : How much it means to environment?

green tree in jungle

Economic development and prosperity are mainly driven by corporates and businesses. In the past, revenue and profit were the only key accounting measures of many organizations.

The main goal for business strategy is to increase shareholders value, in the extent of putting profit ahead of people, environment and society. For example, companies would exploit natural resources to earn short term profit without even thinking of the long-term consequences of their action to the society and environment. This has brought negative impact to the environment due to the exploitation of natural resources.

However, with global pressure to reduce the negative environmental footprint, changing of consumer mindset and stringent environment regulations, there are more corporates and businesses which already shift to a more holistic way of business performance measurement.

The Triple Bottom Line

There are more organizations that accepted “The Triple Bottom Line” approach which stress equally on people, planet and profit in the business performance measurement. Besides, corporate social responsibility also stresses the importance of meeting triple bottom line while maximizing profit.

Corporate social responsibility (CSR)

Corporate social responsibility (CSR) is the implementation of business strategies and practices that does not harm the environment and its natural resources. And at the same time, create social value for the society by having employment and generates economic output in terms of profit.

CSR projects:

Sustainable development project can include:

  • Green materials in new construction,
  • Clean and renewable energy,
  • Designing projects that can harvest own energy or incorporate green space in the organizations and others.

On the other hand, business sustainability refers to the company’s ability to survive into the future. There is an inseparable link between corporate social responsibility and business sustainability in current marketplace. Doing business ethically and responsibly can influent the financial ability and the future of the business.

Short term corporate profit may grow through unethical or irresponsible means which jeopardize the environment and society. However, these unsustainable business practices cannot build customer loyalty, build strong brand reputation, or meet legal compliance in the long term. Doing the right things is a commitment to social responsibility which can stand the test of time.

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