What is ethical business?
When a company makes decisions about their business based on the social or environmental cost/benefit of their actions, they are practicing ethical business. An ethical business will consider their impact on society and the environment to be equally (or close to equally) as important as their profit. Ethical companies often have goals to solve a particular problem within society and this is reflected in their mission and company culture.
Ethical business refer to both 1. a specific act, where a business makes an ethical decision, or 2. an overall culture within a company.
Example (definition 1): A company who does not have a culture that values the environmental or social impact may still make ethical business decisions from time to time. An ethical business decision for a clothing line would be to stop sourcing their shirts from a supplier after discovering they were illegally employing children during the manufacturing stage.
Example (definition 2): Ethical business is rooted in the culture of companies that measure their success by the good they do for their community.
What ethical business means for conscious consumers
Conscious consumers value ethical businesses and support them when they can. There are many different ways to find out how ethical a business is and some businesses can be ethical in some areas but unethical in others. Some conscious consumers highly value worker’s rights and they place a high value on that aspect of a company. Others value animals rights or environmental impact and place a higher value on a companies stance toward those aspects.
Most conscious consumers don’t take every aspect of a business’ ethics into account when they shop and it’s okay to base your purchasing decisions on a handful of issues you’re passionate about. As long as you’re conscious about why you’re choosing to buy, your values will be reflected in your purchases and will impact the market.
Popular areas in ethical business
Animal testing – animal rights advocates boycott companies that are known to have any type of animal cruelty in their supply chains. There are eco-label certifications like the leaping bunny that help consumers know which brands are cruelty free.
Worker’s rights – there is a wide variety of offenses covered by the term “worker’s rights” ranging from slave labor in factories all the way to cutting employees’ hours in retail stores. Labor issues are usually uncovered by the media and can quickly change ones opinion of a brand they previously believed was ethical.
Pollution – companies that are causing environmental destruction and aren’t making a concerted effort to reverse their impact are unethical. Environmentally conscious consumers will steer clear of products they know blatantly contribute to pollution.
Things conscious consumers should know about ethical business
- A company may be ethical in one area but unethical in other areas. You should know what you value and base your shopping decisions on that.
- Ethical business is a cultural part of a business. If a business isn’t ethical now, it’s not likely that they will be ethical any time soon. Companies can change their culture, but it’s difficult and takes time, so be wary of old school corporations claiming to turn a new leaf.
- Ethical business isn’t black and white; and everyone has their own opinions. Some may think it’s okay for children to work if their conditions are fair and they are paid a fair wage. Others believe that any form of child labor is wrong. It’s up to you to decide what’s right and wrong.
As with all aspects of conscious consumerism, you need to do your research to better inform your purchasing decisions.