The ability of consumers to understand how a company operates and where their products come from is increasing all the time.
This is made easier by the rights of public access to information and the internet. There is no longer anywhere to hide.
'Open’ companies, those which have embraced the new ways to communicate with stakeholders, may be able to respond to rapidly evolving market places in the way that a more traditional ‘closed’ company may struggle.
Transparent companies and companies that behave ethically could end up stronger. More than half of the 70,000 people interviewed in 69 countries for Transparency International’s 2009 Global Corruption Barometer said they were willing to pay more to buy from corruption-free companies. And 75% of all those interviewed agree that there is a commercial advantage to ethical behaviour. [i]
For more on Transparency, including new media and the availability of and access to information, see Forces for Change
Consumers have access to more information than ever before, and rising consumer awareness over recent years has created a growing demand for transparency.
When it comes to product selection, market research suggests that 12% of consumers choose products based solely on their environmental and ethical credentials. [ii] However, such products often come with a price premium, and across the board, customers are now expecting more products and services to be ethical and sustainable as standard. This chart highlights how the sales of some ‘premium’ product categories have increased significantly over the last decade.
Average annual growth in UK sales of ethical and green goods and services between 2000 and 2011
Source: Co-operative Bank, 2012, Ethical Consumerism Report 2012.
The growing demand for more sustainable products and services may create new markets and requires increased transparency from business.