There are lots of influential voices who are now more vocal than ever in showing support for ethical brands as big corporations are called out for their ill-treatment towards their employees, to animals, or the environment. With this said, it is evident that the need for sustainable and ethical business practices seems more prevalent than ever.
Being a “good business” is not just popular today but it also is becoming more profitable as entrepreneurs and the market itself have started to positively react towards this movement. The UK’s renewable energy market has grown with government support and is expected to be worth over £40 billion by 2020.
What does it mean to be an ethical business?
An ethical business is concerned with anything impacted by its activity, products, and services. This includes customers, employees, third parties, and the buyers of the product or service. Every decision made by the business is impacted by the effect it may have on any one of the people involed in the supply chain or the environment surrounding it. The end product or service, how it is made or the processes behind it and how it is manufactured and distributed.
More and more people nowadays are waking up to the need for sustainability. Big companies are also slowly shifting to a more sustainable route. For example, H&M launching eco-friendly initiatives, and other successful businesses that are deemed ethical such as AECOM (a construction giant) and HTC (a phone company).
Why should your business be ethical?
Being ethical, especially if you are a small business owner, will help you create a standout brand and for you to have the opportunity to run your business in line with your personal values.
Based on a research done by Forbes, it turns out that employees are also mindful about the ethics of the companies they are working for. About 65% of employees would seriously consider resigning from their jobs if their company harmed animals and the environment. About 83%, on the other hand, would consider resigning if their employer used child labour in sweatshops.
Being ethical also brings a commercial advantage as 87% of consumers are likely to purchase a product from a company that advocated for an issue they care or are passionate about. Around 75%, on the other hand, would refuse to purchase a product from a company if they found out that it is supporting an issue opposing their beliefs.
Brands are building ethics into their business models which they use to their advantage by making a difference as well as to set them apart in crowded marketplaces.
Business ethics refers to the implementation of appropriate business policies and practices dealing with controversial subjects which include:
- insider trading;
- social responsibility; and
- fiduciary responsibilities.
The law usually sets the tone for business ethics by providing a basic guideline that businesses may follow to gain public approval.
Respect for employees and customers
Ethics and respect go well together. An ethical business respects:
- its employees by valuing opinions and treating each one of them equally;
- its customers by taking their feedback into consideration and assessing their needs
- its vendors by paying on time and utilizing fair buying practices; and
- its community by being environmentally responsible, showing concern, and gives back to the community as it deems fit.