Ethical way to boost the bottom line

WHILE quality, price and customer service remain important in consumer decision making, there is no denying the increasing value consumers are placing on ethical and environmentally conscious products and services.

By way of the internet and globalisation, we have more information than ever on where exactly our products and services are sourced.

For better or for worse, we now know exactly how our spending is impacting people, the environment and the economy.

According to research prepared by Deloitte and Chartered Accountants Australia and New Zealand (CA ANZ) earlier this year, 64 per cent of consumers in the Asia-Pacific region are willing to spend more on products produced by companies committed to social responsibility.

Although a positive trend, it is important local businesses recognise the value Tasmanian consumers are placing on ethical and environmental considerations when purchasing products to remain competitive.

Just as consumers opt to spend their income on businesses and products that take ethics into consideration, many are also boycotting those that do not.

Consumers might choose to purchase or boycott brands and products based on a variety of conditions — local sourcing, treatment of workers and animal testing to name just a few.

CA ANZ/Deloitte research revealed close to one-third of Australians have now switched to ‘green’ cleaning products and grow their own fruit and vegetables to reduce their impact on the ecosystem.

In Tasmania, with our clean, green image and focus on local produce, the ethical consumer accounts for a large portion of the economy, particularly in the tourist market.

Looking at the Hobart City Council’s push to phase out plastic takeaway containers and the 2013 ban on plastic bags, it is clear Tasmania is focused on how consumer habits are impacting the environment.

Tasmanian businesses should be embracing this trend and creating options for the ethical consumer, as minor changes may ensure the financial sustainability of your business in a socially conscious marketplace.

From a managerial perspective, it appears this trend is not yet widely recognised with figures indicating less than 3 per cent of Australian businesses trading believe ethical considerations are a major issue for their customers.

Clearly this is not reflective of the consumer environment.

As businesses fail to recognise the rise of the ethical consumer, those that do provide ethical services will have an opportunity to lead their competition.

Small changes that may encourage ethical consumers to engage with your business guilt-free might be as a subtle as changing your approach to recycling and waste or introducing new ethically sourced products.

In Tasmania, we have a number of ambitious local businesses paving the way for the ethical consumer.

One local business taking this concept to an impressive level is Hobart retailer Teros, focusing exclusively on sourcing and selling products that promote sustainability and are made from natural and biodegradable materials.

Opening in 2014, Teros has carved out a significant market share, driving the rise of electric bicycles and innovative waste reduction practices in Tasmania.

On a more macro level, Bendigo Bank is an interesting example of a large financial company providing a range of options for ethical consumers to comfortably engage with their services.

This is perhaps best demonstrated by the Community-Saver Account, a banking option which allocates a minimum portion of a customer’s interest to a partnered charitable organisation.

Bendigo has also begun supporting local communities with its Community Bank initiative which provides grants and scholarship opportunities for residents and charity initiatives.

Whatever your motivations, servicing the rise of the ethical consumer will inevitably help Tasmania on the path to prosperity.