Megatrend: Ethical Living is Pushing Companies to Become Socially Conscious
Ethical Living has become increasingly more important to consumers, which can be defined as life guided by ethics and moral values. Ethical living is slowly moving to emerging markets and is causing a lot of companies to rethink their strategy. As modern day consumers are moving towards buying sustainable products and/or products that come with authentic backgrounds or brand stories, they have more power to influence than ever, due to the rise of social media, and the ease of gaining and spreading information and opinion. Long-term charity/sponsorship affiliations have become an important caveat of many companies’ corporate social responsibility and marketing strategies, proving that an ethical agenda and profit do not have to be mutually exclusive.
There’s quite a bit of challenges that come with ethical living for companies. The complexity of modern supply chains makes it difficult to control the implementation of ethical solutions as well as the degree of ethical awareness varies significantly across the globe. There’s also the problem with greenwashing as opposed to efforts to make a real positive impact. Rethinking how business operates as well as meeting growing demand for ethical products while monitoring supply chains brings additional costs, which brings on the difficulty of passing on additional costs, an ethical premium, to consumers.
While the challenges are hard to face, the opportunities are well worth it. Sustainability brings the prospect of innovation of new products and business models, which builds image and aids reputation building. Inclusive economic development leads to growth in purchasing power and a bigger pool of potential consumers. On a more cost focus level, there are many potential efficiency and money savings stemming from sustainable practices. Companies will have to steer towards sustainability as ethical living increases among consumers.
There are five core drivers shaping ethical living. These are shifting economic power, population change, technology, environmental shifts and pressures, and changing values. With the rising importance of emerging markets, increasing interest in frontier markets, and fears over advanced economy stagnation, the global economy witnessed a paradigm shift in 2008 when emerging markets overtook developed countries in their contributions to world GDP in PPP terms. These changing dynamics are affecting all levels of society, from atrisk-of-default governments to job-insecure workers. As the global population approaches 8 billion, demographic shifts such as urbanisation, migration, and higher life expectancy and falling birth rates, increasing the proportion of elderly people, are combining to reshape consumer lifestyles and purchasing decisions. In consumer decision making, technology plays a pivotal role in the ability of manufacturers and retailers to meet the needs of today’s consumer. It encompasses everything from the development of mobile internet to 3D printing and artificial intelligence. The constant innovation within technology and ever-faster technological processes are driving consumer megatrends.
Consumers and business continue to pay attention to ethics and moral values. This translates into decisions framed by concerns about the environment, sustainability, animal welfare, production and labour practices, as well as desires to positively impact communities and people.