The Ethics Economy.
2018 seems to be a year for making a stand. As individuals and organizations, issues of general concern, such as the ever-increasing plastic problem, are becoming more commonplace. These issues are often connected to organizations decisions, processes, and conduct. Brands cannot afford to sit back and stay neutral anymore.
We are in an age of ‘values’. Companies are collections of people who have come together over common causes or interests, and by extension, why shouldn’t they also have shared values?
Until recently, it seemed to be enough for a brand or organization to be reactive, and apologize when something went wrong, or to respond to customer demands for ‘better’ products. Taking, or supporting, a more ethical approach to business didn’t seem to be on the agenda. The 2013 Rana Plaza incident was a huge wake-up call. Over a thousand garment factory workers died due to working in unsafe conditions. Ethics hit the news in a very big way, and suddenly it was no longer enough to pay lip service to corporate social responsibility. People were demanding action, and ethical action at that.
Today, brands cannot afford to be inactive and reactive. Customers are demanding brands do the right thing, otherwise, they will take their custom elsewhere. This shift towards ethical consumption and behavior is being driven by younger generations.
This change in consumer behavior requires organizations to be proactive and take a stance on the issues that preoccupy both their employees and their customers. Some brands are proactively addressing the challenge. UK retailer, John Lewis, recently retired their ‘Boys’ and ‘Girls’ labels, renaming their children’s clothing range ‘children’. It believes this will be good for gender equality and diversity. Global interior brand IKEA has committed to employing refugees in their production centers in Jordan, as part of their long-term plan to create 200,000 jobs globally for disadvantaged people. Indeed, entire industries of support organizations have also sprung up, stating that their business is there to support and aid the growth of ethical and sustainable brands.
What a brand stands for and how it makes a positive difference in our world will soon become a point of differentiation for a company. Organizations with a strong ethical foundation tend to do better financially, have higher rates of employee retention, and benefit from more customer referrals and higher customer satisfaction.
According to the World Economic Forum, high performing companies are those that focus on values rather than rules. Their recent report found that the highest performing organizations elevated human values to such an extent that 90% of those values have become part of the company’s brand appeal. Furthermore, in 70% of high-performing organizations, values have also become a business enabler. They provide a reference point for tough decisions and for better decision making. Who knows, we could soon see ethics as a business metric, and human metrics, alongside regular KPIs, becoming the norm.
The future is for brands that care. Good business is better business.