Great expectations: Companies must demonstrate socially responsible business practices to keep consumers’ business
A number of recent events, including this week’s Associated Press’ report linking Thai shrimp producers – such as those that ship to popular U.S. grocery stores and restaurants – to slave labor, recent decisions by large publicly traded companies to establish corporate human rights policies and programs, and the findings of a recent national survey on consumer sentiment towards corporate social responsibility, indicate the increasing attention that companies, news organizations, and now consumers themselves are giving to a company’s ability to demonstrate ethical and socially responsible business practices.
Indicators of this increasing consumer expectation for ethical business practices also include the recent media statement from New Jersey Republican Congressman Chris Smith, a member of the House Foreign Relations Committee, in response to the Associated Press’ findings of slave labor links to the Thailand fish and shrimp industry’s supply chains, as well as this quarter’s release of a national consumer survey conducted by Aflac, a large U.S.-based insurer.
Representative Smith was quoted by the media as saying, “All of us may find ourselves eating a slave-made product without knowing it, but once we know it, we all have a moral obligation, I believe, to make a personal decision to boycott it.”
Details from the 2015 Aflac-Light Speed GMI’s Corporate Social Responsibility (CSR) survey fact sheet are based on a national survey that included 6,000 respondents (2,000 nationally representative and 400 within each of the top-10 Designated Market Areas in the United States). Expanding its scope to include the investment sector, Aflac also surveyed 355 investment professionals about how corporate social responsibility impacts their decisions.
While Aflac’s conclusions are drawn from a single survey research effort, the selected sample pool indicates wide representational coverage of the U.S. consumer markets and, at least in terms of the number of participants, a significant sampling of investment professionals. The findings are worth noting and indicate substantial consumer preference towards perceived ethical companies as well as a strong bias for working for companies with a strong CSR program and publically recognized ethics. In both areas, strongest consumer preferences for perceived company ethics/values are attributed to millennials, which, as a group, will continue to rise in overall market purchasing power. Specific conclusions from Aflac’s research include:
- 79% of consumers believe companies that stay true to their ethics/values outperform others in their field.
- 82% of millennials believe companies that stay true to their ethics/values outperform others in their field.
- 92% of millennials are more likely to purchase from an ethical company.
- 75% of consumers said they would be happier to work for a company with a strong CSR program.
- 44% of consumers feel that salary is most important when it comes to a prospective employer, but 74% of consumers are likely to seek out employment at a company that has been awarded publicly for its ethics.
- 82% of millennials are likely to seek employment at a company that has been publicly awarded for its ethics, whereas 68% of people over 35 would.
While continued analysis is needed to further understand the specifics of rising consumer expectations for socially responsible business practices, the factors and events above seem sufficient enough to suggest that rising consumer expectations for firms to “know and show” socially responsible business practices has potentially very real commercial benefits and consequences for firms to consider.