The rise of ethical consumerism is driving brands to change their business models to maintain their long-term market viability.
Tastes change with the times, so they say. Coming out of the pandemic, consumers began to reevaluate their lifestyle choices and reset their consumption habits. Now, they're more conscientious than ever.
Consumers are no longer just concerned with the products they buy but also with how they’re made. They’ve become more mindful of the environmental implications of their purchase decisions. In fact, 85% of consumers have begun to buy sustainable products to reduce their carbon footprint (Simon-Kutcher & Partners).
And while price and quality are critical to consumers, 60% consider sustainability one of the top criteria for choosing products (BusinessWire). But for some, price isn’t always the principal deciding factor. Around 35% don’t mind paying more to buy products that are eco-friendly and ethically made (WeWork).
With their heightened environmental consciousness and social responsibility, consumers have become more discerning about the brands they support. They’re more likely to purchase from brands that are ethically responsible. For 77%, it’s imperative that the companies they support espouse values that are aligned with theirs (Havas Group).
Certainly, as consumers have become more aware of the impact of their actions on the environment, they expect businesses to be more socially responsible as well. They want to hold brands accountable for their corporate decisions so being ethical is no longer an option but almost a requirement for brands.
Aside from observing ethical practices, they also want brands to be more vocal and transparent. Consumers (70%) appreciate brands that take a public stand on issues. Aside from adding to their credibility, the majority of consumers believe that brands taking a stand can create real, positive change on causes that are important to them (SproutSocial).
Because of the collective pressure to adopt more ethical practices, businesses are increasingly working to be more sustainable—and are being vocal about it online. According to Boston Consulting Group, 80% of businesses worldwide announced their plans to invest more in sustainability efforts in the coming months and years.
Big-name companies are already leading the charge and have begun rolling out their green initiatives. In a monumental pledge, Honda and Ford announced changes to their manufacturing process to create a line of more eco-friendly vehicles in the coming years.
Starbucks has also been implementing programs to help reduce its corporate waste and encourage other businesses to do the same. Luxury brands, such as Miu Miu and Balenciaga, also followed in their footsteps and started integrating reused materials into their products.
As these popular brands go green, more up-and-coming brands, small-time enterprises, and big organizations are also expected to follow suit.
But while this trend is inspiring positive change, it’s also being used to take advantage of consumers.
As increasing numbers of companies make the move to become more sustainable, consumers are warned to be more vigilant of greenwashing or false ethical claims. In fact, around 68% of business executives in the United States have admitted to making deceptive sustainability claims (The Future of Commerce).
Because of the prevalence of greenwashing, consumers are advised to be more vigilant and discerning. Sustainability shouldn’t just touch one aspect of the business but be integrated into other areas, such as their headquarters, product design, manufacturing, shipping, and sales, according to Amina Razvi, executive director of Sustainable Apparel Coalition.
Experts believe that the move to be more ethical is a crucial step for businesses as it will guarantee their long-term profitability (BusinessWire). They must be able to meet evolving consumer demands and expectations to remain viable in the market. So the pledge to be green must be a continuous commitment and a holistic one as well.