The first of a series of reports into the state of play of ethical brands and how they are perceived by consumers worldwide has been published.
The report by GfK NOP has highlighted both the need for businesses to address ethical issues as well as the market opportunities for businesses which have developed ethical policies, brands and products.
Ethical brands are becoming more widely accepted worldwide. Nearly one in three (31 per cent) consumers stated that buying ethical products makes them feel good.
Only 18 per cent of the 5,000 consumers surveyed by GfK NOP thought that ethical brands were just a fad, and 43 per cent stated they thought ethical brands made businesses more accountable for their actions.
Only one in four (24 per cent) don’t believe the hype around ethical products.
Almost half of the consumers surveyed in the US, UK, France, Spain and Germany thought that corporate ethical behaviour had declined.
This was particularly evident in the Germany and the US where 63 per cent thought that companies, in general, are only out for themselves these days.
UK consumers are the most ethically aware, and have identified businesses with clear ethical policies, products and services as the most ethical, such as The Co-op Group and the Body Shop.
Some 62 per cent of UK consumers took the view that ethical brands are making the world a better place.
In other countries, this trend is not as obvious, as consumers from the US, Germany, France and Spain have conflicting views on multi-national corporations and their ethical policies.
Most ethically perceived brands in the UK are:
2. Body Shop
7. Green and Black
The opportunity for companies which have ethical brands, products and policies is immense. One third of all people questioned said that they were willing to pay a 5-10% premium for ethical products.
However the definition of ethical corporations does come into question, illustrated by a majority of consumers stating they had little interest in typical CSR programmes such as charitable donations, sustainability and local community activities.
Activities such as environmental policies and employee relations were stronger features of ethical companies. 56 per cent of those questioned believed that companies should actively promote their ethical credentials and policies.
Head of GfK NOP’s Brand Strategy centre of excellence, Chris Davis, said, “Ethical consumption is perhaps the biggest movement in branding today.
“Corporate behaviour is under intense scrutiny, with corporate policies now clearly posted on the internet.”
He added, “Consumers worldwide are developing their own definitions of ethical practices and are voting with their wallets.
“While this poses a great opportunity for many businesses in the development of products and services, for some, it is a wake up call to address the demands of the growing number of ethically-aware consumers.”
The report also found that consumers use a variety of sources to gain information about companies and their ethical practices.
Independent consumer watchdogs, online consumer chat forums and blogs are among the most popular sources.
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