Products without moral code face backlash

By Sarah Hills

- Last updated on GMT

Related tags: Fair trade, Business ethics, Corporate social responsibility

Companies risk repercussions if they fail to address the ethical demands of consumers as awareness of the impact corporations have on society and the environment is growing, according to a new report.

Consumers may not necessarily act on their convictions on a daily basis by choosing brands that support a worthy cause or are marketed as ethical, said a Nielsen Global Consumer Report called Corporate Ethics and Fair Trading.

But companies "remain at risk of a consumer backlash if they fail to address consumer demand for products that adhere to their moral code”​.

Nielsen said the increasing awareness of the impact individual consumption has on society is highlighted by the growth of Fair Trade products.

Consumers worldwide spent over $3.6bn on Fair Trade certified products in 2007, a 47 percent increase on the previous year, according to the International Fairtrade Labeling Organization (FLO).

Meanwhile, in the US there are around 19 percent (or 40m people) actively engaged in environmental issues and a further 19 percent who, though not politically committed to the environmental movement, are focused on natural or organic foods.

The report said: “Marketers looking to mitigate consumer concerns through promoting CSR (corporate social responsibility) initiatives need to be aware that consumers will increasingly be looking not just for a company that supports a worthy cause but also one that understands how its very existence impacts the people and environment in which it operates.

“This will require marketers and corporate executives to better understand public opinion and concern surrounding the company’s industry and how this changes over time.”

Ethics poll

Nielsen’s recent Global Online Survey on Business Ethics and Fair Trade, which polled 28,253 online consumers in 51 markets, revealed that over 80 percent of the world’s Internet users think it is very or somewhat important that companies implement programs to improve the environment.

And in the US, about eight out of ten consumers feel it is important or very important that companies engage in programs that support the environment and society.

Related topics: Suppliers

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