Consumer power and the ethical business

In recent decades we have seen the rise of the ethical shopper - the consumer who takes the trouble to
learn about a company's ethical standards before buying any of its products. High profile companies have
taken note and now actively try to promote their ethical credentials among the general public. These
companies know that if consumers perceive them to be unethical, their business will suffer accordingly. It's
a great example of what might be termed consumer power.

Take McDonald's as an example. A few years ago, a survey showed that British consumers considered the
fast food giant to be the least ethical of all high profile companies. Its food was considered to be unhealthy
and responsible for the rise in obesity, especially among children. People were against McDonald's for what
is seen as the exploitation of its employees (who are only paid the minimum wage) and its attitude to the
environment. The company was forced to take steps to address these issues and brighten up its ethical
image. So it's common now to see new McDonald's outlets equipped with solar panels on the roof - a very
visible sign of the company's commitment to the environment - and the packaging is no longer made of
environmentally damaging polystyrene but recycled paper. The company has also begun reusing the
vegetable oil in its fryers as biofuel for its fleet of delivery trucks. Cynics would say that this is just a good
marketing strategy to make the company appear caring, but at the same time it is a clear example of how a
company has changed the way it works to satisfy consumer demands.

Some of the worst offenders in terms of unethical working practices are in the fashion, clothing and
footwear industries. Two years ago, the British high street fashion chain Primark came under attack
following an undercover operation carried out by BBC reporters which revealed the unethical exploitation
of workers in one of the company's suppliers, which was based in Manchester in the UK. The workers were
paid less than the minimum wage and some were working a 12 hour day, seven days a week. Primark
accepted that such practices were unacceptable and agreed to do more to make sure they only dealt with
ethical suppliers in future. The company now carries out around 1,000 ethical audits per year at its
suppliers' factories, which is more than double the number previously carried out.

Ethically aware consumers have sometimes organised international boycotts, which can have a hugely
negative effect on global companies while at the same time encouraging them to change their ways. An
example is what happened to another clothing manufacturer Fruit of the Loom. A protest campaign began
in 2009 among students in the United States and later spread to the UK. As a result, over 90 American
colleges cancelled their contracts with the company. This action cost Fruit of the Loom an estimated $50
million in lost revenue. As a result of the pressure from the student boycott, Fruit of the Loom was forced
to reconsider its position regarding working conditions. The Environmental Consumer noted: "In an
incredible about-face the company re-opened a Honduran factory it had closed after workers had
unionised. Furthermore, it also gave all 1,200 employees their jobs back, awarded them $2.5 million in
compensation and restored all union rights."

Because companies are eager to look green and ethical in the eyes of consumers, this can sometimes lead
to marketing strategies that mislead the public. A recent survey of so-called green cleaning products sold in
top UK supermarkets found that in many cases a green claim could not be substantiated with proof. In
other words, the labelling on the products was misleading for consumers, who thought they were buying
an eco-friendly cleaning product. As a result of the survey, one large supermarket chain, Tesco, agreed to
redesign the packaging and alter the labelling of its own-brand cleaning product.

Fortunately, more and more of today's consumers are concerned with ethical issues and take a keen
interest in where the products they buy come from and how they are manufactured. All this makes it more
difficult for global companies to cut costs at the expense of their workers and the environment.
Comprehension questions

1 How has McDonald’s reduced its impact on the environment?

2 Why was Primark accused of being unethical?

3 What forced Fruit of the Loom to change its policy regarding unions?

4 How have some companies deceived the public about how green they really are?