Write an analytical business report on what ethical consumerism means for businesses. Choose one
company evidencing how they operate ethically. This must take into account the ethics and values of
the company you choose to focus on.�
In your report (which must be written in business report format), you need to cover the following
topics:�
� An executive summary which gives a brief overview of the argument in your report including key
findings and conclusions�
� A brief overview analysis of ethical consumerism, identifying the examples of some of the products
which fall into the ethical category,�
� A detailed review of one company claiming to operate ethically. Discuss the approach(es) they
have used to become a more socially conscious business, linking this with the ethics and values of
the company that you have identified.�
� A short opinion survey on what influences consumer buying behaviour, carried out by you from a
sample of students at GSM London
An executive summary which gives a brief overview of the argument in your report including key
findings and conclusions�
� A brief overview analysis of ethical consumerism, identifying the examples of some of the products
which fall into the ethical category,�
� A detailed review of one company claiming to operate ethically. Discuss the approach(es) they
have used to become a more socially conscious business, linking this with the ethics and values of
the company that you have identified.�
� A conclusion which includes critical evaluation of ethical consumerism based on the evidence that
you have gathered both from your primary and secondary research, focusing onone company you
have chosen for detailed review�
Supporting material will be posted on Blackboard, but you will be expected to undertake research
using newspaper/magazine/web articles, journals and text books.Word Limit � Not more than 2000
+/- 10%
Ethical Production
EXECUTIVE SUMMARY
Ethical consumers are shoppers who base
their buying decisions on a product’s
social and ethical positions with regard to
their own values.
Consumers have become more ethically
conscious with more people wanting to
know more about the way products they
purchase are produced. Notably, several
studies have also revealed a positive
correlation between ethical production and
company performance. This has in turn
motivated more companies to develop
ethical policies that their production ethics,
practices, structures, and relations.
Example cases of ethical companies
include Co-op bank, M&S, and Innocent
Drinks.
There is a need for companies to
reconsider their policies in regard to the
emerging trend or risk losing on consumer
confidence as demonstrated by these
findings.
Introduction
Over the past 25 years, there has been increased debates on the value of CSR especially one
to do with “ethical consumer” (Wheale & Hinton, 2007).
These are shoppers whose purchasing decisions are based on a product’s social and ethical
positions such as labor practices and environmental impact with regard to their own values
(Healey, 2013).
Ethical consumerism can take the form of positive buying or moral boycott.
The Co-operative Bank is one of the banks that have placed ethics at the heart of their
business.
It is guided by four core ethical values of openness, honesty, social responsibility, and caring
for others (Harvey, 2012).
Ethical consumerism is the trend of buying things made ethically; without harm or
exploitation of animals, human, or the natural environment. This happens through positive
buying or moral boycott. Positive buying is favoring ethical products or businesses that
operate on the principles of the greater good while moral boycott basically means avoiding
products which a consumer believes are associated with unethical behavior.
Ethical Consumerism
Many surveys have also supported this standpoint by showing increasing number of
consumers demanding ethical products.
The studies show that consumer prefer ethical products such as fair labor-certified
garments, products made through sustainable technologies, cosmetics produced without
animal testing, and fair trade-certified chocolate and coffee (Singh et al., 2012).
An example is a study undertaken by YouGov that found out that consumers have become
more ethically conscious with 78 percent saying they would wish to know more about the
way good they purchase are made including the factory conditions (Potter & Lewis, 2011).
Back in 2007, M&S initiated a £200million program of action they called plan A aimed at
making the company one of the greenest through becoming carbon-neutral, sending no
waste to landfill, as well as setting new standards in ethical trading. The pact addresses
health and safety practices, and employment protection. The Plan A can be compared with
the Co-op banks values on honesty concerning their activities and how they go about doing
them and social responsibility in terms of envirnmental consciousness.
Some 58 percent of consumers said they already purchase Fairtrade products while 19
percent said they would buy the Fairtrade items if they were made more widely available
across the high street (Bucic et al., 2012).
Certain trust criteria by consumers such as creditworthiness are considered to form the basis
of sourcing or purchasing behavior.
Natural capitalism proponents hold that comprehensive outcomes of production forms the
basis of using products as opposed to cumulative outcomes.
As such moral criteria forms a broader shift away from commodity markets to a deeper
product economy.
However, there is little validation of consumer reporting in these surveys because of the gap
between what people say and what they actually do (Brunk, 2012).
Current surveys on consumer behavior reveals emerging trends where consumers are
making purchasing decisions guided by certain criteria such as implied warranty or
creditworthiness. This implies that decisions are made on the basis of broader systems that
not only affects the functional but also the moral creteria of the entire production process
from growing, harvesting, delivery, to final production and distribution.
Mark & Spencer
One of the companies that has been
recognized on several occasions as a result
of its recent initiative to become a greener
retailer is Mark & Spencer.
The company back in 2007 unveiled what
they call “Plan A”, a 100 point program of
action aimed at giving the company a
head-to-foot environmental makeover in
ethical production within the next five
years (Johnson, 2008).
This can be compared with the Co-op
bank’s ethical values of honesty and social
responsibility (Harvey, 2012).
The two values entails being honest on
what a company does and how they do it
as well as taking responsibility of the
community and environment.
Mark & Spencer back in 2007 unveiled their program of action aimed at reinventing their
production in order to become a more greener company. The five-year plan which they
called Plan A was focused on making the company more environmental conscious. Plan A is
similar to Co-op bank’s ethical policy especially the values on honesty and social
responsibility. The two values entails being honest on what a company does and how they
do it as well as taking responsibility of the environment.
M&S focus was on converting all its tea and coffee to Fairtrade to match the growing
significance of ethical consumerism.
A total of 38 product lines were switched, increasing the value of all the Fairtrade ground
and instant coffee sold in supermarkets across UK by 18 percent and that of tea by about 30
percent (Johnson, 2008).
As a result of the initiative, the 2012 M&S report confirms that 138 commitments have been
realized, and the company now recycles 100 percent of its waste (Johnson, 2008).
M&S initiative entailed converting all its tea and coffee to Fairtrade to match the growing
significance of ethical consumerism. In this regard, 38 product lines were switched,
increasing the value of all the Fairtrade ground and instant coffee sold in supermarkets
across UK by 18 percent and that of tea by about 30 percent. Following these changes the
the 2012 M&S report confirms that 138 commitments have been realized, and the company
now recycles 100 percent of its waste.
In addition, Johnson (2008) notes that 31 percent of its products now have a Plan A attribute
such as “made at an eco factory” or “made from recycled material”.
Its in record that over 5 million customers have participated in Plan A activities.
M&S uses fewer carrier bags with 1.7 billion bags saved in the past five years (Johnson,
2008).
About 257 of their products are now made using the certified sustainable palm oil.
The company has realized many other achievements in terms of ethical consciousness
including a 5 million customer participation in Plan A activities and a significant reduction in
the number of carrier bags by up to 1.7 billion bags within a five year period. The company
has since achieved a 31 percent attribute on its products.
Over 50000 people facing workplace barriers have completed M&S placement.
The company’s sales of Fairtrade food has henceforth increased by 88 percent since the year
2007 (Carrington et al., 2010).
A comparison of M&S’s Plan A with the Co-op bank’s ethical policy reveals some similarities.
One of the latest considerations that are comparable to M&S are the genetically modified
food.
Co-op bank’s ethical policy currently cover environmental and animal welfare, economic
development, international development, and human rights much more like that of M&S
(Harvey, 2012).
Other achievements include the over 257 products made using certified sustainable palm oil,
placement of over 50000 people in M&S, and the 88 percent increase in sales of Fairtrade
food. Comparison of M&S’s plan A with the Co-op bank ethical policy reveals similarities in
that the two companies emphasizes on environmental and animal welfare, economic
development, and human rights.
Opinion Survey
My opinion survey on 50 students from
GSM London yielded results that concur
with several other past studies on what
influences consumer behavior.
One of my findings was that economic
status was a major factor.
Consumers also consider how the
company treats their customers.
Other factors reported to directly
impacting on how consumers spend their
money include how companies sources
their products, how they treat their
workers, and the impact they have on the
environment.
An opinion survey I carried out on 50 GSM London students, several issues emerged as the
main determinants of consumer behavior which concurred with past findings of similar
studies. Economic status and consumer service were seen as the most basic factor in that
determining consumer behavior. Wealthy consumers were more likely to be more ethical
conscious than less wealthy ones. Other factors are companies sources their products, how
they treat their workers, and the impact they have on the environment.
Conclusion
In conclusion, it is clear from the discussion that ethical consumerism has become a
common trend and a major determinant of consumer behavior.
Consumers are increasingly becoming aware of the ethical aspects of production with
studies showing increased consciousness.
Core factors influencing consumer behavior are where companies source their products,
how they treat their workers, and the impact they have on the environment (Chatzidakis et
al., 2012).
More companies in their quest to match and meet the changing demands of consumers
have embarked on more ethical practices in their production.
Ethical production is to a great extent linked to increased sales and better company
reputation as seen in the Co-op bank and M&S examples.
Customers are more willing to buy from companies they deem more ethical as compared to
others.
To conclude it is important to note that ethical consumerism has become a common trend
and a major determinant of consumer behavior.
Consumers are increasingly becoming aware of the ethical aspects of production with
studies showing increased consciousness.
In this regard some of the core factors that were found to be influencing consumer behavior
are companies sources their products, how they treat their workers, and the impact they
have on the environment.
More companies in their quest to match and meet the changing demands of consumers
have embarked on more ethical practices in their production.
Ethical production is to a great extent linked to increased sales and better company
reputation as seen in the Co-op bank and M&S examples.
Customers are more willing to buy from companies they deem more ethical as compared to
others.
References
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Bucic, T., Harris, J., & Arli, D. (2012). Ethical Consumers Among the Millennials: A Cross-
National Study. Journal Of Business Ethics, 110(1), 113-131.
Carrington, M., Neville, B., & Whitwell, G. (2010). Why Ethical Consumers Don’t Walk Their
Talk: Towards a Framework for Understanding the Gap Between the Ethical Purchase
Intentions and Actual Buying Behaviour of Ethically Minded Consumers.Journal Of Business
Ethics, 97(1), 139-158.
Chatzidakis, A., Maclaran, P., & Bradshaw, A. (2012). Heterotopian space and the utopics of
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Healey, J. (2013). Ethical Consumerism. Thirroul, N.S.W.: Spinney Press.
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