Ethical business practices and why consumers love them

Corporate Social Responsibility is more than just a buzzword for big business – it’s time for small business owners to realise the power of showing their ethics.

CSR, or Corporate Social Responsibility, is a term often associated with large companies but many small businesses are realising the power of having a social mission at the heart of what they do.

In reality, CSR contributes a considerable amount of good to the world. If you consider that small businesses do 60% of all private sector employment in the UK, you start to realise that there are a lot of people out there who could make a difference with tangible CSR initiatives.

Not only that, the positive effect isn’t just limited to charity and local communities; CSR can help attract new customers, keep your workforce happy and raise the profile of your brand. And what’s more, the average consumer is getting pretty savvy with discerning who deserves their hard-earned cash. With ethical spending now at £81.3 billion a year in the UK (up 3.2% from the previous year), it’s safe to say that we’re firmly in the age of the philanthropic consumer.

The philanthropic consumer

Competition in the market is inevitable. And having the superior product isn’t always enough to generate sales. However, in a world of choice, how do you stand out? A nice logo and effective advertising obviously help, but having an ethical point of distinction can boost your reputation for the right reasons.

The treatment of people, animals and the environment in the supply chain has never been more important to consumers. And with more choice of products and services comes the ability for people to take their money elsewhere if they don’t agree with how something is sourced, created or recycled.

We live in a world where political, environmental and economic uncertainty is constantly present in our social feeds and all over the media, so it’s become impossible to stay ignorant of the issues. People are changing their behaviours and their buying habits to reflect this. For example, over two-thirds of 18-24 year olds turned out to vote in the 2017 general election – which is the highest in the 25 years.

Similarly, millennials are much more likely to want to be involved in their community than people of the same age in 1999. Now, more than ever, people are choosing to look beyond themselves and see how they can make a difference in the wider world. Businesses need to start thinking about whether their brand and products are insular and destructive or outward-facing and sustainable.

Sustainable manufacturing, equal pay, human trafficking, animal cruelty and responsible farming are all coming under public scrutiny. The trend for transparency makes it even more likely that, if there’s an ethically weak link in your supply chain then people will find out, and once they do the ramifications could be huge. Petitions focusing on the concerns of upset consumers have forced large brands to change their practices, from equal pay and boardroom representation to sustainable ingredients in products.

For example, in April of last year, eight Non-Government Organisations (NGOs) and Global Trade Union Federations partnered with Clean Clothes Campaign to launch the petition – Follow The Thread. The petition reached out to seventy clothes and footwear brands, asking them to sign a transparency pledge to uncover the truth behind their supply chains – after all, do we really know where our clothes are made and under what conditions? To date, nearly seventy thousand people have signed the petition and a number of high street brands, including H&M and M&S have responded, but there are still more milestones to hit.

So, the question becomes; are you the kind of brand that’s doing the kind of good in the world that people really care about? If not, it’s time to find some CSR initiatives that you and your employees, your local community and your customers can genuinely get behind.

Use technology for impactful CSR

Technology has a way of making things more accessible to people. A device with a good data connection is sometimes enough to arm people with the knowledge to do things differently. For example, Winnow, a tech start-up which helps restaurants battle food waste, has helped its customers save £2 million since 2013, and reduced carbon emissions from the hospitality sector by 34,200 tons. Many users have cut their waste by a huge 50% thanks to an innovative smart meter. By using IoT to measure what food is being thrown away and when, it provides restaurants with a report that can help them manage their supply chain and avoid over-ordering, or simply adjust portion sizes and remove unwanted ingredients.

Considering that food loss and waste in the developed world costs $516.6 billion each year, it’s easy to see how integrating new, smart technology could make a huge difference, not just to businesses, but the wider world. Food waste is an issue a lot of people care about, and the widespread nature of it means it’s an easy one to start disrupting.

Another great example is award-winning Toast, which uses unwanted bread to brew beer and donates profits to charity, or app Too Good To Go, which lets restaurants and cafes offer leftover food at knockdown prices throughout the day. Users can log on, search their local area for what’s on offer and pick up a cheap lunch or dinner. Best of all, businesses can very visibly reduce food waste, do their bit for the environment and reduce their losses on stock.

But don’t think it’s just food-related either: people are constantly developing specific devices and programs to solve the most niche of problems. So, even if you don’t struggle with food waste, you can look for ways to tweak and optimise your experience and provoke less negative impact. First Mile are a brand who do just this. They work with small businesses, recycling old and unwanted stationery to schools running low on supplies.

Sustainable brands in the future

Some of the most successful brands have taken the sustainability message and embraced it, making it part of the way they operate instead of something they occasionally talk about. If you want to have less of an impact on people, animals and the environment while attracting new customers and the best employees, think hard about what sustainability goals your business can really have an effect on.