Recently we realized that there are some significant parallels between how people are looking at real estate purchasing and the evolution of ethical consumerism. We wrote up a brief history of the latter to help you draw your own conclusions
The term “ethical consumerism” was first popularized by the British magazine Ethical Consumerism which was first published in 1989 and inspired a criteria based investment approach. The criteria assess investments based on criteria ranging from animal rights to human rights, to environmental safety. Today both Bloomberg and Reuters have the same ethical breakdown of investments. In “The Global Markets As An Ethical System”, John McMurtry argues that all purchasing decisions imply some moral choice and that there is no purchasing that is not ultimately moral in nature. This idea has trickled down from large investments to purchasing simple, everyday products.
The term “corporate social responsibility” became popular in the 1960s and has remained a term used to cover issues of legal and moral responsibility. Many argue that corporate social responsibility is an attempt to preempt the role of governments who would otherwise impose moral or socially responsible regulations on corporations.
One of the most common approaches to corporate responsibility is corporate philanthropy. This includes monetary donations given to non-profit organizations but also includes the corporate sponsorship of events. Another approach to corporate social responsibility is to incorporate socially responsible strategy directly into the business of an organization. For example, using fair trade tea and coffee has been adopted by various businesses.
Whenever a business decides to undertake any corporate responsibility strategy, a cost-benefit analysis is always necessary. Often socially responsible business decisions come at a cost. However, incorporating a moral component into a business model can also attract customers and prevent any large-scale consumer boycotts.
The problem that often arises with product-driven social awareness campaigns is who is setting the moral standard. How can a general moral standard be set? When this moral standard is established or an individual makes a choice of consumerism, do social awareness campaigns cause consumers to turn a blind eye to other issues with products. For example, the (RED) campaign started by Bono in partnership with Gap sold products with the (RED) logo and proceeds went toward AIDs relief in Africa. However, there is so standard set for the labor workers manufacturing these products. So while consumers may be donating to AIDs relief, they are also supporting production in a maquiladora in Central America.
Now many products have adopted marketing campaigns that make them seem like their product is associated with a social awareness issue, although no explicit connection exists. For example, the Dove Real Beauty campaign prides itself on showing the “true” beauty of women and using regular, average women in their advertisements. The campaign is currently in its “Campaign for Self-Esteem” phase. This campaign doesn’t raise any money for any outside campaign. It doesn’t market cruelty-free or vegan products. Nothing about the product itself is ethically different than any other popular personal hygiene brand. However, the Campaign for Real Beauty as somehow construed as a social awareness campaign because it uses “regular” women in its advertisements. The public purchasing Dove products could now be construed as positive buying because when purchasing Dove products, they are supporting positive self-perception and body images.
Finally, it is difficult to see the benefit of certain corporate responsibility strategies. When tobacco companies and energy companies such as British Petroleum and Shell gas launch philanthropic campaigns, the strategy seems counterintuitive. BP’s philanthropic wing supports the development of pharmaceuticals in Russia, but as a corporation, its oil spills and the use of fossil fuels has negatively impacted the health and safety of low-income families in developing areas around the world. Does a philanthropic campaign somehow combat those actions? BP also claims “BP is working to manage the environmental impacts of our operations and projects wherever we do business”; however, BP and other energy and fossil fuel companies are also the root cause of adverse environmental impacts. The strategy is counterintuitive.
Overall, most major corporations that undergo ethical consumerism and corporately responsible campaigns may do beneficial work in some areas, but often neglect to carry out socially responsible practices in other areas. Ultimately a social awareness campaign may be a successful marketing strategy, but the costs may outweigh the benefits.