Corporate Ethics Influence Consumer Preferences: Ethisphere Survey
(3BL Media/Justmeans) – Consumer purchase decisions are increasingly influenced by a brand’s social purpose. Companies that are willing to recognize this fundamental shift in consumer behavior are investing more in corporate citizenship and ethical performance in order to gain a competitive edge and grow share for their brands.
A new survey released by Ethisphere Institute gives further credence to the fact that changing consumer behavior is impacting corporate profitability. Ethisphere works with global companies as diverse as GE, Starbucks and Xerox. It polled 120 top-level executives across industries and regions at its 2016 Global Ethics Summit in New York.
Consumers Ready to Pay More
More than 84 percent of survey respondents believe consumers would be willing to pay more for goods or services from a company that is recognized as a responsible corporate citizen. Fifty-three percent of the respondents also said good corporate citizenship is very important for consumers when selecting a financial services company.
Impact of Social Media
As many as 94 percent of respondents indicated that the real-time nature of social media impacts companies’ accountability, especially for their behaviors; 49 percent indicated that they consider this impact to be extreme. Consumers are paying attention to the smallest of details associated with companies’ financial transparency, the treatment of employees, sustainability and other corporate actions.
Senior Management Role
More than half of respondents indicated that senior management executives primarily drive ethics-related change within their companies; followed by the board of directors (22 percent) and middle management (16 percent).
Training Programs and Workshops
Forty-three percent of respondents said training programs and workshops have been the most effective way of promoting ethical behavior at their company. Only eight percent of individuals indicated that ‘incentive/reward’ based programs for ethical behavior were most effective.
When asked where their company has the most room to improve, the highest number of respondents (37 percent) selected employee recruitment, retention and reward. This was followed by sustainability initiatives (22 percent), financial transparency (18 percent) and counterparty product sourcing and supply chain management (13 percent).
According to Ethisphere CEO Timothy Erblich, smart executives are truly recognizing that millennials, and consumers in general, are paying close attention to whether the companies they support are promoting best practices. The top management can either choose to lead and be recognized for best practices or face scrutiny in real-time.