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Now is the time for an ethical pivot: it's good for the world and good for business

Updated: Aug 10, 2020

"Businesses cannot succeed in societies that fail"

So says former Unilever CEO Paul Polman. Which reflects something I believe strongly: that the point about the post-Covid 'new normal' is not what will or won't change, but what has to change for the world to become a better place for all. A green pivot. An ethical pivot. Call it what you will. But businesses must play a significant part in this future if it's to happen at all, as has been recognised by the We Mean Business coalition and their call that we build back better.

I'm not talking here about the trend for 'purpose-led' marketing, often as superficial as it is opportunistic. But businesses adopting a fully integrated ethical position, anchored in genuine, firmly-held beliefs and lived out in tangible behaviour. A desire to do the right thing because it's the right thing to do, not because it will sell more stuff. Although increasingly that will be the case. But it can't be the motivation. You have to accept there is a potential downside in doing right. After all, as Bill Bernbach once said...

"a principle isn't a principle until it costs you money"

And that will be a challenge for many businesses. Which is why I have to come out in favour of optimism here, as far as ethical behaviour and the response of people to this, because any other path really doesn't take us to a good place.

As we become more aware of the collective challenges we face in the world, from the climate crisis to the Me-Too movement to Black Lives Matter, corporate reputation anchored in a clear, positive ethical position (not just marketing spin!) must become more important to people. Or at least something that's on their radar, and taken into consideration when making purchase decisions.

Maybe not as much (or as quickly) as some research would like to think. If we are to take the Edelman Trust Barometer at face value, 64% of people in the world 'buy on beliefs'. Even I think that's probably a stretch.

At the same time, I truly believe it's not as irrelevant as other research suggests. I'm thinking of Reach Solution's otherwise solid paper that came out recently, The Aspiration Window, which suggested ethics have only minimal impact on purchase decisions.

Because there is definitely a clear direction of travel in favour of businesses and brands with strong underpinning ethics. That's why people do overstate their positive intentions when asked the question: they recognise the rightness even if current behaviours don't always match up.

And regardless of what different research might say, the evidence is there for business impact. Both Kantar's Brand Z study and Havas' Meaningful Brands study have demonstrated the uplift in sales value and share price enjoyed by more ethical, purposeful brands. And Unilever have long celebrated the performance of their Sustainable Living brands versus the rest of their business.

So you really do need to pick your side on the importance of ethics, and the impact it has on business performance (if that is a consideration you have to factor in), and decide if you're going to push for a better world or just give up and hope for the best.

Now the importance of an ethical position, and the impact is has on behaviour, will be different for different people. But there will always be some for whom any given position is key: it will frame their consideration set and influence their decisions. For me personally, this has been fair trade since the 1990s, and now the environment too. Not 100% of the time. We all lapse, and sometimes there is no choice, so no judging! But it's definitely something I approach with serious intent.

In other areas, and for other people, 'ethics' generally, and the reputational trust this delivers, may never be more than a handy tie-breaker: price or functional performance will be the primary driver here (as the Aspiration Window suggests), but given the choice I will plump for the brand which isn't screwing up the world (because I understand the world is being screwed). And as true product and brand differentiation erodes, this tie breaker effect will become ever more significant.

So businesses have a choice: do you set the pace or follow on behind?

My view? Brands operating ahead of the curve will be rewarded. Rewarded by those motivated now. But also rewarded by the future yet to come, where people will look back and see who was on the side of the angels.

This doesn't mean you have to be doing everything right. All the time. No one expects businesses to be perfect. Just as our own purchase decisions don't always reflect our claimed beliefs. What's important is clear statement of intent and honesty about achievements. Avoid the issue washing and tell it how it is. Because where businesses are behaving more purposefully, and moving in the right direction on ethical issues, this level of transparency can reap rewards with the opinion-leaders who care and influence others down the line.

You don't need to make a song and dance about it either, with chest puffing big budget advertising. Sometimes all you need is a 'newsletter'. Which is why I like Innocent's just released 'Good Times'. As a brand, Innocent have always tried to be on the ethical front foot, and this is their first sustainability and ethics report.

At 42 pages there’s maybe a bit too much over-sharing going on. It’s nicely user friendly though and very much ‘on brand’, so they are clearly expecting this to be public facing (for those who are interested). It covers failures too not just successes (speaking to the honesty point made above). Though it skips Innocent's ownership by Coke, which may be something for another day.

So congratulations to Innocent on putting it out there with this, and may we start to see more businesses and brands grasp the importance of ethics and doing what's right. Because it's good for the world...and because it's good for business.

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