Here’s a key question for local manufacturers, retailers and service providers: Are South Africans genuinely interested in ethical products and would they act on these preferences through their purchase behaviour? Louise Gardiner, founder and MD at First Principles Sustainability Services, takes a closer look.
Ethical, or “˜green’, consumerism is the way individuals and social groups use their purchasing decisions to demonstrate a commitment to specific environmental and social causes and to express how they would like companies to respond.
Consumers have always been able to make purchasing choices based on their values, but the ethical consumer movement has only really gained momentum over the last two decades. It was characterized early on by major consumer boycotts of companies like Shell and Nike in the 1990′s. The former was in response to concerns about Shell’s operations in the Niger Delta and the planned sinking of a disused North Sea oil storage platform off the coast of Scotland, while the latter concerned revelations about Nike’s sourcing of products from factories that made use of sweatshop labor practices in Asia. In recent years, positive ethical consumer options have burgeoned with technological and product innovations like solar power, fair trade labels, and zero waste goals.
The UK-focused website Ethicalconsumer.org identifies four main ways in which consumers make ethical purchases:
- Positive Buying: favouring particular ethical products, such as energy saving lightbulbs
- Negative Purchasing: avoiding products that consumers disapprove of, such as battery eggs or gas-guzzling cars
- Company-Based Purchasing: targeting a business as a whole and avoiding all the products made by one company.
- Fully-Screened Approach: looking both at companies and at products and evaluating which product is the most ethical overall.
Green consumerism is on the increase globally but not equally in all countries. First Principles recently completed a high-level comprehensive survey of South African public opinion focused on perceptions of corporate citizenship and the willingness of consumers to make purchase decisions based on environmental and social criteria. The study forms part of an annual global survey conducted in over 25 countries led by international researchers GlobeScan Incorporated.
Entitled “Keeping Good Company”, the SA study draws on results of a 2011 nation-wide survey of what South Africans see as the most important issues affecting society and how they believe the private sector should respond. It also identifies consumer attitudes about which products need to be more responsible.
The findings reveal that just under half of those surveyed have considered rewarding a company they feel is socially responsible, and approximately 20% have actually done so in the past year (compared with 31% in 2004). Despite the dip in actual purchase behaviour, the results show consistent evidence of a significant portion of the SA public that can be counted on to consider ethical issues in their purchase decisions.
Willingness to act on these concerns will no doubt fluctuate in response to current issues and economic circumstances. However, a tentative deeper analysis of the data has shown no significant differences in attitudes and behaviour in relation to the wealth or education levels of respondents.
South Africans are divided when it comes to the area where they feel companies can have the biggest impact in community investment. A major shift compared with previous years is that poverty is no longer the top issue. Rather, the public wants to see business address a plurality of issues.
These results are in line with international findings.
Importantly, this year’s survey revealed South Africans have much higher expectations for “˜operational responsibilities’ than “˜citizenship responsibilities’. This means that, in addition to companies showing they have invested in the community; consumers want to know about how products are sourced and produced.
The survey gave respondents a chance to name companies they thought were doing a particularly good job overall. Coca Cola, MTN, and McDonald’s were the three companies named more regularly than others as being the most socially responsible. They are also companies whose brands are characterized by a strong presence of their products within communities.
Like the boycott of Shell and Nike in the 1990′s, well-known brands are more vulnerable to being “œpunished” by consumers, while their positive behaviour is likewise more readily rewarded. For this reason, top brands such as Shell, Nike, Levi’s, Johnson&Johnson, and Walmart have proactively adopted corporate sustainability strategies.
Walmart has long been regarded by many as an irresponsible company, evidenced by the strong reaction by trade unions and the public to Walmart’s move to enter the SA market. However, in 2008 the company began announcing a series of green supply chain and ethical product initiatives which have since shifted its reputation to the top of many positive perception rankings, including the GlobeScan Radar.
Ethical consumer trends
Ethical consumer behaviour is an innovation which, like other types of innovation, follows a trend of uptake depending on levels of awareness among individuals and the effect of communication within and between social groups or communities.
The internet is therefore playing a major role in promoting ethical consumer habits. It educates consumers about environmental and social issues and provides readily available information on companies and products. It also now connects consumers in unprecedented ways via social networks.
Ethical consumer behaviour also follows a “˜trajectory’ of adoption which can be identified and tracked. Early adoption is characterised by individuals who are passionate about particular issues and eager to gain social recognition through their good shopping habits. They are therefore likely to tell others about their ethical habits and to encourage friends and family to do the same. Early adopters are also known to experience an emotional “œhigh” from their ethical purchases, which motivates them to increase their knowledge of products and frequency of purchases.
Typical feelings associated with ethical purchases are that:
- I have contributed to the well being of my community
- I have invested in my own health and that of my family
- I have acted on my intelligence and what I have learned
- I have voted with my Rand an am able to influence the companies I am buying from
- I haven’t been fooled into buying a product which is bad for the environment or people”
- I am having a positive impact on the world, rather than a negative one
Late adopters and laggards will wait to see whether these decisions have any substance to them and whether purchasing behaviour actually influences companies. With time, they will respond to pressure to fit in with the changing values of their social groups and won’t want to be perceived as being unethical.
The first level of response by business is to anticipate positive and negative perceptions and to guide their product development and marketing accordingly. However, the lesson from companies that have achieved first-mover advantage in this arena is to engage with customers and support them as their values change in response to living in a world in crisis.
Unsurprisingly, there has been a general upward trend in ethical consumer awareness over the last decade given growing awareness about climate change and the social impacts of globalization. There has also been an increase in sustainable supply chain initiatives and ethical product labeling; as well as emergence of companies specializing in environmentally and socially responsible products.
The international GlobeScan Radar survey has been tracking consumer perceptions and declared behaviour for over a decade in over 25 countries. It identified opinion leaders and change agents early on and has revealed fluctuations in ethical consumer awareness and behaviour since then, with an overall upward trend.