Ethical consumerism is growing fast, and business leaders know it, explains our editor. Are you moving quickly enough?
Justin King has almost left the building, but before he leaves the top spot at Sainsbury’s for good, he’s been busy imparting pearls of wisdom to the business community.
And he’s spot on, too.
King told the MT Live conference in London yesterday that it is time for businesses to demonstrate good corporate citizenship if they want to remain competitive.
He believes that corporate citizenship is about providing decent working conditions and paying the taxes expected of you by consumers, beyond what you can just about legally get away with.
Tax avoidance is no longer a sensible strategy, because consumers will find out and react against it, King said. “The power of the consumer wallet is more powerful than the vote,” he said, referencing Starbucks’ decision to move its European HQ to the UK, following the furore over its tax avoidance here.
Sainsbury’s, he told the crowd, is the seventh-biggest taxpayer in the UK. “If we have to compete with businesses that do not contribute to our society in the same way, that’s a consumer issue.[…]
“Consumers will sort it.”
And so they will.
Consumers are increasingly expecting the businesses they buy from to behave responsibly.
Tax is just one component of this expectation of responsible business behaviour.
Ethical production is another – and it’s becoming increasingly important to consumers in this country.
Sales of ethical produce grew 12% in 2012, according to the most recent Ethical Consumer Markets Report (2013).
The market was worth more than £54bn.
The UK is the world’s biggest market for Fairtrade products. Fairtrade sales increased 14% last year, to £1.78bn.
Sainsbury’s, as it happens, is the world’s largest retailer of Fairtrade products, stocking around 800 of them.
And as £1 in every £4 spent on Fairtrade in the UK is spent in a Sainsbury’s store, you can see the business case behind King’s commitment to responsible business.
As King can see, businesses that fail to adopt more responsible business practices will soon fall out of favour with customers who have a range of more ethical alternatives to choose from.
The political world seems to agree.
Some 86% of MPs think “making profit in a sustainable manner is a key issue for all businesses in light of the recent recession and banking crisis”, according to ‘The Politics of Responsible Business 2014’, a new report from Business In The Community.
The report finds that politicians now expect local businesses to engage more deeply with society than just donating to charity.
That means businesses are set to face mounting political pressure to behave responsibly, on top of customer pressure.
I believe that for these reasons, and many others, responsible business is the future of business.
That’s why we will be launching Securing Britain: Responsible Business on Wednesday 2 July, in partnership with Business In The Community.
This series of four publications sees the UK’s foremost responsible business leaders tackling some of the most pertinent challenges and opportunities for business and government in this arena.
Most importantly, it puts forward ideas that businesses and politicians can truly act on to make changes now. Our aim is to galvanise the conversations that inspire action.
To find out more, sign up to our newsletter to get the Securing Britain: Responsible Business publications free over the next month, and find out how your business can stay ahead:
1. Innovation & New Ways of Working – Weds 2 July
2. Social Enterprise & Social Investment – Weds 9 July
3. Sustainability, Community & Supply Chain – Weds 16 July
4. Youth Unemployment, Education & Workforce – Weds 23 July