Ethical Consumerism: Look Before You Buy

‘ETHICAL consumerism’ is the trend fast gaining popularity among new-age customers. For the uninitiated, what that simply means is that more and more customers are choosing to purchase goods that are ethically sourced, ethically made and ethically distributed; in short, make their purchase decisions based on perceptions created by following their product from inception, manufacturing practices, its motivations, and business model.

US-based sustainability expert Jacqueline Payne, in a paper in Carnegie Mellon University’s The Heinz Journal, says, “The key idea about the ethical consumerism movement is that you ‘know’ what you are buying and that you buy things that are produced ethically because not ‘knowing’ leads to abuse and exploitation…”

[creativ_pullright colour=”red” colour_custom=”” text=”‘An ethical consumer is someone who buys things that are produced ethically… that is recycled and recyclable, by paying fair wages, following sustainable and eco-friendly technology…'”]

“An ethical consumer is someone who buys things that are produced ethically. Depending on the context, ethical production may mean producing something; that is recycled and recyclable, by paying fair wages, following sustainable and eco-friendly technology and process and sharing the profits for larger social goods.”

Perhaps it is an idea whose time has come sooner than expected in the Indian context. The 2012 Greendex survey found that Indian consumers are choosing to buy environmental friendly products, while the Nielsen’s research puts India among the top three Asia Pacific countries, along with Vietnam and Indonesia, which are showing a strong affinity for eco-friendly products.

As consumers express their desire for greener products, brands are responding with the launch of more non-chemical, health-friendly products for homes. More eco-friendly paints, pest control products, lighting, furniture and consumer electronics, among several other things, are vying for consumer preferences. A few examples include:

• Nerolac Paints rolled out impressions that its recent paint offerings were non lead-based health-friendly, and having almost zero volatile organic content. This market is growing at a decent rate of 30-35% per year.

• Eureka Forbes’ ‘Green RO’ membrane technology is made to suit different water conditions. This has given the company a competitive edge and leadership status in this rapidly growing segment.

• LG’s ‘health guard’ feature in its refrigerators claims to deliver high-quality health value from foods through an air purification system. With this new series, the company is expecting to grow more than 25% this year in the refrigerator segment.

• The new category of LED lights, that consume less electricity has managed to create a good connect with the more conscious consumers.

As Mumbai-based architect Bobby Mukherji puts it, “Indians have started demanding green products while designing their homes. Though the demand comes only from 15% of my posh clientele, the query rate has increased significantly.”

In a market that is notoriously price-sensitive, ‘ethical consumers’ want and expect much more than when they are paying a higher price for eco-friendly goods. Some of the things they also look for in a company, brand or product are:

• Natural, Pure Ingredients
• Ethical Sourcing, Production and Distribution
• Clear Information About Nutrition
• Transparency
• Fair Labor
• Honoring Human Rights
• Protecting Human Health
• Respecting the Environment
• Sustainability
• Ethical Marketing and Advertising
• Renewable/Recyclable Packaging
• Giving Back to the Community and Society

In order to accommodate this growing change in the market, companies have to consider reducing prices for non-sustainable products or investing in methods that trigger some behavior modification of consumers to favour and pay more for sustainable products in a manner that better reflects the costs of producing and sustaining ethically sourced products. Purpose-driven marketing is a perfect tool to modify consumers’ behaviors worldwide. India too has seen a plethora of products that have environmental and sustainable value.

The 12th Five Year Plan has laid substantial importance on the issue of environmental sustainability and eco-friendly development. Actions and initiatives like minimization of the waste in production process, more reliance on green and clean energy, good governance and public disclosure of information on polluting activities, etc. have been emphasized on, as something which can create pressure in the market to manufacture environment-friendly products.

In an ideal case, ethical consumers should also care about a broad range of wp-related issues including: health and safety, business accountability and transparency, global warming and climate change, environmentally-friendly products and services, reuse, recycling and waste management, community involvement of businesses and ethical treatment of animals.

There is no doubt that ethical consumerism has changed consumer tastes, which in turn has forced a change in market trends. Companies are recognizing the importance of promoting wp in the long run, and will have to devise a mechanism to focus on social issues and collectivism, apart from being transparent and accountable.

And with the new government policy of 2 percent spent on wp being made mandatory along with the increased consumer awareness on ethical consumerism, we can only expect more corporations to build on sustainability and environmental accountability a part of their business models.