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ETHICAL CONSUMERISM




           Eddie Crowder
            Daniel Palos
           Natalie Smith
DEFINITION OF ETHICAL CONSUMERISM
    The buying of products that are made

    ethically




Define “ethically”
    Ethically made products are those made with

    the least harm to the environment and
    animals and no exploitation of humans or
    human labor
DEFINITION OF ETHICAL CONSUMERISM

    Ethical consumerism also requires

    consumers to think about their carbon
    footprint when choosing which
    goods/services to buy from which companies
DEFINITION OF ETHICAL CONSUMERISM
Four types of consuming
 Positive buying
        Buying ethically-made products
    
    Negative buying

        Not buying unethically-made products
    
    Company-based purchasing

        Choosing whether or not to support a company
    
        based on the goods it produces
    Fully-screened approach

        Combination of the three methods above
    
2004 CONE CORPORATE STUDY

    Objective: To study American attitudes

    toward corporate support of social issues.
     Social  issues include issues focused on human
      rights, the environment, politics, etc.
    Findings: “Companies must get involved with

    social issues in order to protect and enhance
    their reputations.”
HIGHLIGHTED FINDINGS
In the event I found out about         2004
company’s negative practices
Consider selling company’s stock       80%
Refuse to invest in company’s stock    80%
Refuse to work at that company         75%
Boycott company’s products and         73%
services
  18-25 year olds more likely to consider company’s citizenship when
 making purchases, employment, and investment decisions.

 Question: Are these statistics surprising? Truly, would 75% refuse to
 work at a company, given their negative practices? All talk, no action?
2006 CONE MILLENNIAL CAUSE STUDY
    Findings:

      “Millennials [people born 1979-2001] say they
        are prepared to reward or punish a company
        based on its commitment to social causes.”
    Socially and Environmentally ResponsibleBiz’s reap Rewards
    83% will trust a company more if it is socially/environmentally responsible.

    69% consider a company’s social/environmental commitment when deciding
    where to shop.
    89% very likely to switch from one brand to another that is about the same in
    price and quality, if the other brand is associated with a cause
    79% want to work for a company that cares about how it impacts and
    contributes to society
WHAT IS DRIVING CR TODAY?

    BSR/Cone 08 CR in a New World Survey

      CR   professionals attitudes and expectations

    Reputational benefits are increasingly   84%
    important
    More demands on businesses to solve      72%
    societal problems
    Stakeholder demands are increasing       80%
    CR is increasing seen as a driver of     57%
    innovation
ACTIONS BY BUSINESSES
We - the mass of common men and women in all countries -
 also compose the world's market. To sell to us is the ultimate
      aim of the world's business. Hence it is ourselves as
consumers who stand in a central relation to all the economies
 of the world, like the king in his kingdom. As producers we go
  unto a particular factory, farm or mine, but as consumers we
 are set by nature thus to give leadership, aim and purpose to
 the whole economic world. That we are not kings, but serfs in
   the mass, is due to our failure to think and act together as
    consumers and so to realize our true position and power.

   -Percy Redfern, The Consumers' Place in Society, 1920
Not There Yet
Company           Ethiscore (Out of
                        20 )
Apple Inc        8
Ebay Inc         (12.5)

McDonald’s       3.5
Starbucks        4
Exxon Mobile     2
Amazon.com Inc   6
CONSUMERS PUSH FOR
POSITIVE BUYING


•Positive buying- Favoring ethical products, be they
fair trade, cruelty free, organic, recycled, or re-used.
•Companies must rise to the challenge and clearly
define and articulate their corporate social
responsibility (CSR) values.
•Consumer interest in CSR is unlikely to diminish
over the coming years and ignoring consumers'
interest simply gives your competition time to
establish leadership.
SOCIAL ACCOUNTING

  Seven out of 10 consumers are unsure which

  companies are telling the truth
 More than two-thirds do not think companies
  are being genuine.
 Social accounting supersedes the traditional
  audit audience, including suppliers of inputs,
  employees and trade unions, and
  governments.
AUDITS BY FIRMS

  Because there is a wider more influential

  audience it is a good idea to have reports
  audited by a third party.
 By 2005 52% of the Fortune Global 250
  largest firms produced corporate
  responsibility reports separate from their
  annual financials, of which 30% were
  independently verified, usually by accounting
  firms
NIKE’S AUDIT OF LABOR RIGHTS
    A confidential Ernst &

    Young audit of labor and
    environmental conditions
    inside a Nike factory in
    Vietnam was leaked to
    the Transnational
    Resource & Action Center
    (TRAC).
    This is the first time that

    an accounting firm's labor
    and environmental audit
    of any apparel company
    has ever been made
    public.
ERNST & YOUNG FINDINGS
  •The audit notes continuing violations of labor laws on maximum
  working hours, unprotected chemical exposures, poor treatment of
  workers, and management control of the labor union.
  •E&Y received criticism and so other firms because they feel that
  information comes straight from managements. Complaints about the
  audit:
       •The audit is missing information regarding occupational health
       and safety, environment, and general working conditions.
       •The methodology employed by Ernst & Young ignores most
       accepted standards of labor and environmental auditing. For
       example, the audit involved no monitoring or sampling of air
       quality in the factory.
  The audit overlooks many of the key issues of concern in Nike plants
  around Asia, including: physical and verbal abuse of workers, sexual
  harassment, repercussions for attempts to organize, and contract
  violations.
PWC AND WAL-MART

  PricewaterhouseCoopers audit of a factory in
  China producing goods for Wal-Mart missed
  serious problems, including the use of
  dangerous chemicals, management denial of
  collective bargaining and violations of
  overtime laws.
GLOBAL REPORTING INITIATIVE

The Global Reporting Initiative (GRI) produces
 the world’s standard in sustainability
 reporting guidelines. Sustainability reporting
 is the action where an organization publicly
 communicates their economic,
 environmental, and social performance. The
 GRI’s mission is to make sustainability
 reporting by all organizations as routine and
 comparable as financial reporting.
FIRMS JOINING FOR THE EFFORT
BPM | MacKenzie, is a new joint venture between San
 Francisco-based accounting firm Burr Pilger&Mayer
 LLP (BPM) and MacKenzie Communications, Inc.
 The firm offers a diagnostic quot;health checkquot; for
 clients, designed to assess current practices and
 provide recommendations to align corporate
 responsibility practices with strategic business goals.
BPM | MacKenzie addresses a real market need for
 companies who are increasingly focused on initiating
 and promoting corporate responsibility and
 sustainability programs across their organizations.
THANKS FOR TUNING IN…




      QUESTIONS?
SOURCES

  http://www.123exp-business.com


 http://www.ethicalconsumer.org/

 http://www.ethiscore.org/

 http://www.corporatecritic.org/

 http://www.globalreporting.com

 http://www.corpwatch.com/

 http://www.accountability21.net/

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Ethical Consumerism

  • 1. ETHICAL CONSUMERISM Eddie Crowder Daniel Palos Natalie Smith
  • 2. DEFINITION OF ETHICAL CONSUMERISM The buying of products that are made  ethically Define “ethically” Ethically made products are those made with  the least harm to the environment and animals and no exploitation of humans or human labor
  • 3. DEFINITION OF ETHICAL CONSUMERISM Ethical consumerism also requires  consumers to think about their carbon footprint when choosing which goods/services to buy from which companies
  • 4. DEFINITION OF ETHICAL CONSUMERISM Four types of consuming  Positive buying Buying ethically-made products  Negative buying  Not buying unethically-made products  Company-based purchasing  Choosing whether or not to support a company  based on the goods it produces Fully-screened approach  Combination of the three methods above 
  • 5. 2004 CONE CORPORATE STUDY Objective: To study American attitudes  toward corporate support of social issues.  Social issues include issues focused on human rights, the environment, politics, etc. Findings: “Companies must get involved with  social issues in order to protect and enhance their reputations.”
  • 6. HIGHLIGHTED FINDINGS In the event I found out about 2004 company’s negative practices Consider selling company’s stock 80% Refuse to invest in company’s stock 80% Refuse to work at that company 75% Boycott company’s products and 73% services  18-25 year olds more likely to consider company’s citizenship when making purchases, employment, and investment decisions. Question: Are these statistics surprising? Truly, would 75% refuse to work at a company, given their negative practices? All talk, no action?
  • 7. 2006 CONE MILLENNIAL CAUSE STUDY Findings:   “Millennials [people born 1979-2001] say they are prepared to reward or punish a company based on its commitment to social causes.” Socially and Environmentally ResponsibleBiz’s reap Rewards 83% will trust a company more if it is socially/environmentally responsible. 69% consider a company’s social/environmental commitment when deciding where to shop. 89% very likely to switch from one brand to another that is about the same in price and quality, if the other brand is associated with a cause 79% want to work for a company that cares about how it impacts and contributes to society
  • 8. WHAT IS DRIVING CR TODAY? BSR/Cone 08 CR in a New World Survey   CR professionals attitudes and expectations Reputational benefits are increasingly 84% important More demands on businesses to solve 72% societal problems Stakeholder demands are increasing 80% CR is increasing seen as a driver of 57% innovation
  • 10. We - the mass of common men and women in all countries - also compose the world's market. To sell to us is the ultimate aim of the world's business. Hence it is ourselves as consumers who stand in a central relation to all the economies of the world, like the king in his kingdom. As producers we go unto a particular factory, farm or mine, but as consumers we are set by nature thus to give leadership, aim and purpose to the whole economic world. That we are not kings, but serfs in the mass, is due to our failure to think and act together as consumers and so to realize our true position and power. -Percy Redfern, The Consumers' Place in Society, 1920
  • 11. Not There Yet Company Ethiscore (Out of 20 ) Apple Inc 8 Ebay Inc (12.5) McDonald’s 3.5 Starbucks 4 Exxon Mobile 2 Amazon.com Inc 6
  • 12. CONSUMERS PUSH FOR POSITIVE BUYING •Positive buying- Favoring ethical products, be they fair trade, cruelty free, organic, recycled, or re-used. •Companies must rise to the challenge and clearly define and articulate their corporate social responsibility (CSR) values. •Consumer interest in CSR is unlikely to diminish over the coming years and ignoring consumers' interest simply gives your competition time to establish leadership.
  • 13. SOCIAL ACCOUNTING Seven out of 10 consumers are unsure which  companies are telling the truth  More than two-thirds do not think companies are being genuine.  Social accounting supersedes the traditional audit audience, including suppliers of inputs, employees and trade unions, and governments.
  • 14. AUDITS BY FIRMS Because there is a wider more influential  audience it is a good idea to have reports audited by a third party.  By 2005 52% of the Fortune Global 250 largest firms produced corporate responsibility reports separate from their annual financials, of which 30% were independently verified, usually by accounting firms
  • 15. NIKE’S AUDIT OF LABOR RIGHTS A confidential Ernst &  Young audit of labor and environmental conditions inside a Nike factory in Vietnam was leaked to the Transnational Resource & Action Center (TRAC). This is the first time that  an accounting firm's labor and environmental audit of any apparel company has ever been made public.
  • 16. ERNST & YOUNG FINDINGS •The audit notes continuing violations of labor laws on maximum working hours, unprotected chemical exposures, poor treatment of workers, and management control of the labor union. •E&Y received criticism and so other firms because they feel that information comes straight from managements. Complaints about the audit: •The audit is missing information regarding occupational health and safety, environment, and general working conditions. •The methodology employed by Ernst & Young ignores most accepted standards of labor and environmental auditing. For example, the audit involved no monitoring or sampling of air quality in the factory. The audit overlooks many of the key issues of concern in Nike plants around Asia, including: physical and verbal abuse of workers, sexual harassment, repercussions for attempts to organize, and contract violations.
  • 17. PWC AND WAL-MART PricewaterhouseCoopers audit of a factory in China producing goods for Wal-Mart missed serious problems, including the use of dangerous chemicals, management denial of collective bargaining and violations of overtime laws.
  • 18. GLOBAL REPORTING INITIATIVE The Global Reporting Initiative (GRI) produces the world’s standard in sustainability reporting guidelines. Sustainability reporting is the action where an organization publicly communicates their economic, environmental, and social performance. The GRI’s mission is to make sustainability reporting by all organizations as routine and comparable as financial reporting.
  • 19. FIRMS JOINING FOR THE EFFORT BPM | MacKenzie, is a new joint venture between San Francisco-based accounting firm Burr Pilger&Mayer LLP (BPM) and MacKenzie Communications, Inc. The firm offers a diagnostic quot;health checkquot; for clients, designed to assess current practices and provide recommendations to align corporate responsibility practices with strategic business goals. BPM | MacKenzie addresses a real market need for companies who are increasingly focused on initiating and promoting corporate responsibility and sustainability programs across their organizations.
  • 20. THANKS FOR TUNING IN… QUESTIONS?
  • 21. SOURCES http://www.123exp-business.com   http://www.ethicalconsumer.org/  http://www.ethiscore.org/  http://www.corporatecritic.org/  http://www.globalreporting.com  http://www.corpwatch.com/  http://www.accountability21.net/

Notas do Editor

  1. Perhaps most surprising: I am very/somewhat likely to switch from one brand to another that is about the same in price and quality, if the other brand is associated with a cause….89%
  2. Perhaps most surprising: I am very/somewhat likely to switch from one brand to another that is about the same in price and quality, if the other brand is associated with a cause….89%
  3. One Hope Wine 2008 Financial information$1 million in salesGave away 150,000 in cashDonated 3,400 volunteer hours at 200 charity events
  4. Explain the ethiscore. A method of assessing a company’s appeal to a typical ethical consumer. Supposed to be an objective measurement, though you can customize theethiscore to better reflect what you are most concerned about. The score is made up by combining:A Company Rating out of 15 on corporate social responsibility issues.A Product Rating out of 5 on product sustainability issues. (fair trade, organic produce, etc) Subtract numbers ascribed to criticism categories from a baseline of 14. 15th point is for “Company Sustainability” (organic produce only).