Close-Up: Live Issue - Is it important to be an ethical brand?

Consumers are increasingly choosing brands based on their ethical credentials, Noel Bussey says.

This year's Fairtrade Fortnight, a two-week campaign running from 6 March to 17 March and aimed at persuading UK consumers to buy Fairtrade products, has once again highlighted the growing consumer awareness of ethical issues.

Companies and their brands are becoming increasingly conscious of the need to demonstrate their ethical credentials to consumers.

Whether it be through Fairtrade coffee, which all major coffee shops now offer, or sportswear manufacturers reducing their use of sweatshops, businesses are realising that consumers have not just become conscious of social issues, but are gaining the power to force change.

In 2004, £140 million was spent on products carrying the Fairtrade logo, an increase of more than £100 million in just four years.

"Being ethical is very fashionable," Jonathan Mildenhall, the strategy director at Mother, says. "Doing good is a major trend at the moment and brands need to realise this because consumers have the power to make life very difficult for them."

In February, Mother was awarded the creative account for Red, an initiative backed by U2's Bono and supported by companies such as American Express, Armani and Carphone Warehouse, which channels money into The Global Fund in a bid to stop the spread of disease.

Last year, the research company GoodBrand&Co conducted a survey of 2,000 members of the public to determine the social value of 200 of the country's biggest brands.

Called the Social Equity Index, the study provided concrete evidence that good corporate citizenship is no longer simply an ethical necessity; it is now vital for business success in the coming years.

"Our research has shown us that innovation, ethical standpoint and social behaviour is now driving consumer choice, not quality and price," Dean Sanders, the founder of GoodBrand&Co, says.

Many companies have realised this and are now giving consumers a more ethical offering. Earlier this year, Marks & Spencer launched its "look behind the label" campaign, allowing customers to see how and where many of its products were made or imported from.

"The M&S positive purchasing is proving a very good campaign in terms of its consumers," John Sauven, the communications director at Greenpeace, says. "But lots of brands talk about corporate social responsibility and ethical practices but do not have a clue."

However, there are companies, such as Green & Black's and The Body Shop, for whom an ethical stance is integral to their business.

"The original and the best is The Body Shop. It is the pinnacle of this consumer proposition and it is yet to be superseded," Mildenhall says.

However, in February this year, the cosmetics giant L'Oreal made a tentative bid to acquire the chain of stores. The Body Shop initially rejected the bid, but L'Oreal is pursuing the acquisition. The bid raised questions about how a multinational could retain the ethos under which The Body Shop was set up.

The social commentator Peter York says: "A lot of companies think ethical business practices are sprayed on by your PR company. But they are not. It is really about changing hearts and minds."

With opinion moving toward the need for good social practices, companies that want to ensure their long-term future need to offer their consumers a strong ethical policy, as part of their brand.

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CREATIVE AGENCY - Jonathan Mildenhall, strategy director, Mother

"It is becoming increasingly important for companies to be ethical in their dealings because the make-up of business is changing and the consumer is becoming more powerful.

"Consumers are now shareholders and have the strength, the financial muscle, the voice and the numbers to effect changes in companies.

"Government and local councils are also taking note because the issue is high on the agenda.

"However, if a company is advocating ethical practices, it really has to be true to those principles and not just be using them as a cheap trick."

CLIENT - Mark Palmer, marketing director, Green & Black's

"The number of consumers who care about a company's ethical standing has increased massively since we launched in 1991. It was only a small number then, but now it has exploded.

"That is not to say that it is the only reason some companies with strong ethical propositions are successful - I think consumers are reassured by it, but not attracted by it.

"However, consumers are savvy and they also know when a company is just saying it is ethical, or tagging on an ethical issue as an afterthought."

SOCIAL COMMENTATOR - Peter York, social commentator

"What starts off as minority generally ends up becoming mainstream. As a business, you ignore this issue at your peril.

"People are better educated and informed and the ethical issue is becoming more important. It even extends to the Tories - David Cameron is now putting forward the concerns that, ten years ago, would have only been important to an Islington Guardian reader.

"Ad agencies know this and are running with this idea because they need to keep up with current issues and also because if a company is putting forward an ethical campaign, it generates the publicity itself. I can't remember seeing a Body Shop ad, but it has generated a huge amount of PR for itself over the years."

CLIENT - Tristia Clarke, marketing director, Carphone Warehouse

"We have seen a significant rise in the interest our customers have in ethical issues and it has become very important for brands to be as ethical as they can on two levels.

"First, an organisation needs to consider risk and reputation management from a business perspective. Companies suffer from shame campaigns right down to the bottom line. Second, from a corporate side, it is down to how the organisation wishes to evolve.

"Businesses, to some extent, have to comply with legislation but there is always more that can be done. We aim to take responsibility for our impact on the environment and the communities around us."

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