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Why Brand Ethics Is Important for Companies [Examples Included]

Why Brand Ethics Is Important for Companies

Building a responsible business once seemed an impossible task. The debate around brand ethics has been going on for decades with no definitive outcome and no permanent solutions. But times are changing as environmental and social issues are growing out of proportion and becoming impossible to ignore. This pushes companies to become aware of their responsibility towards the world and their impact on it, and take actions.

And if people care about it, you should care too. Social pressure can be a huge motivator for brands to look at their social and environmental responsibility behaviour and make changes. Consumers nowadays want to support ethical and responsible brands. Moreover, their loyalty could be to a brand’s reputation and social message, rather than to the business behind it. If a company doesn’t keep up with its customers’ expectations, it might lose them to more responsible competitors.

However, in its essence, a business is a capitalist entity, which makes it almost impossible to make a truly ethical and sustainable brand. Companies are created to make a profit after all. But this doesn’t mean they shouldn’t use their impact for the good of society, influence their customers, and focus their attention on important matters. Big brands usually vow to be more socially responsible, sustainable, offer fairtrade and ethical work conditions, equality and diversity. A small business can do it as well with enough dedication and clear values.

Certified B Corporations Standards

In fact, the notion that brand ethics and values are a priority is becoming so popular that there is already a standard for such companies, called thе B Corp. If you are not familiar with the concept, here’s how it is described on the official website:

“Certified B Corporations are a new kind of business that balances purpose and profit. They are legally required to consider the impact of their decisions on their workers, customers, suppliers, community, and the environment. This is a community of leaders, driving a global movement of people using business as a force for good.”

The B Corp is a great concept, though earning accreditation, however, is not easy and might require a “total cultural upheaval” of your company. Whether you are willing to make such a colossal change or not, is not an easy decision and depends on many factors.

Certified or not, however, it’s very important that your company’s ethics are up to date and in the right place. We’ve made a list of some of the most relevant reasons to help you decide whether to make it a priority and address important ethical issues that businesses nowadays face.

Here is why brand ethics is important for companies:

1. Transparency and a Good Reputation Are Vital for Success

Running a legitimate business and showing respect to people and the environment should be the basis of a company’s ethics. When you do things by the book and put in the effort to make right by everyone involved, it doesn’t stay unnoticed. A business with a good reputation is a preferable partner to other companies and a better choice for customers.

However, the most important thing about a brand’s ethics is that it’s genuine, transparent, and accountable. Using it as a marketing trick and only simulating good practices to attract conscientious customers is not advisable and can ruin a brand’s reputation. Honest and good intentions should be what stands behind a brand’s ethics, and the desire to make a change.

Also, the digital world is ruled by influencers and social media pressure. Negative information about how a company runs its business can spread like wildfire and cause colossal damage.

This means that maintaining full legitimacy, avoiding gray areas, and always paying your taxes is the bare minimum. You should try to stick to socially just practices, provide fair working conditions to your employees, and, if possible, support the community where your business is located.

Being ethical doesn’t stop with your own affairs. Associating with suspicious partners and companies who are known for their unethical practices can damage your reputation and turn customers off.

Last but not least, companies should be open to discussion and always address negative feedback. Even if you have a somewhat gray reputation following you from the past, you can always work to mend this once you are willing to change. Not only you will make your company better but you can win the consumer’s heart. People love a redemption story, especially when it’s a genuine one.

The Foundations of Brand Ethics

Take Nike, for example. The company has a complicated history of questionable ethics, using child labor in its manufacturing process, and providing obnoxious working conditions. However, they have been trying hard to make amends by improving their policies. They are now part of the Sustainable Apparel Coalition, have been certified by the Fair Labor Association (FLA) Workplace Code of Conduct, and are gradually improving their score in the Fashion Transparency Index.

Nike still has a long way to go but they are on their way to redemption and this makes a positive impression.

2. You Have a Responsibility Towards the Future

Before brands, we are humans. And as such, we all have a responsibility towards the future. What’s more, companies owe an even greater obligation to society, because they have access to a large audience of loyal customers they can influence. As a corporate citizen, you have to make sure that you do your part to make the world a better place, or at least to not make it worse.

For example, the carbon impact of a business can be very big but by using modern technology and solutions, it can be reduced or minimized. Intelligent management of resources and utilizing renewable energy sources is good for the environment and will even save you expenses in the long run. Although the initial investment might seem pricey, in a few years it will pay itself off and becomes worth the hassle.

Take the New Belgium Brewery, for example. This craft beer brewery was founded in Fort Collins, Colorado, by a social worker and her husband, and it’s a certified B Corp. They’ve strived to improve their impact on nature and have managed to make one of their beers the first certified carbon-neutral brew in the US.

Moreover, they are taking actions towards reducing the overall carbon imprint of their manufacturing process by reducing greenhouse gas emissions and water consumption, improving waste management, and using renewable energy.

The company also supports important causes such as the protection of the American Clean Water Act and the fight against climate change. They also make donations to local community causes, organize fundraisers and encourage their employees to be involved by offering a ½ hour vacation for every hour of volunteering.

And if that’s not enough, the company has a policy for inclusivity, diversity, and equity. They work with a professional to make sure that all team members are happy and feel safe in their work environment.

It’s a good example of a company that balances profits against values. After all, beer is important but so are the environment and people.

3. Social Influence Shouldn’t Be Taken Lightly

As we’ve said, people tend to identify with the brands they choose to be loyal to and often use them to define their style and personality. Especially younger generations who are trying to find their place in the world.

Companies have an influence on society through the brands they produce and this gives them the opportunity to set standards and impact people’s opinions. Showing that you are willing to make changes in order to become better is a way to set a good example and will inspire your customers to do the same.

Take Lego, for example. Yes, the company is producing plastic bricks, not the most environmentally friendly toy there is. But Lego works hard to make their products of high-quality and durability.

The company has launched a series of initiatives aiming to educate children through play. Their idea is to teach them about the importance of a circular economy, compassion for others, and environmental awareness.

For starters, Lego makes all bricks compatible, which means that a set from 60 years ago can be mixed with a brand new one and the pieces will fit perfectly. And since the production standards are so high, the sets will actually survive time so that they can be played by the generations to come.

The company even has launched an initiative inviting everyone who doesn’t need their old lego sets anymore, to send them back instead of throwing them in the trash. This way less plastic will pile up in landfills and the toys will not go to waste, as they are being donated to non-profit organizations and children in need.

The company has also launched a braille lego series in different languages to help visually impaired children to learn the braille alphabet through play. The initiative also aims to get classmates involved in the play and help them bond together, encouraging them to overcome differences.

Lego maintains numerous initiatives to support inclusivity and diversity, reduce the CO2 impact of production, and organizes volunteering programs to help children and communities in need.

The company also plans to produce all bricks and packing from sustainable materials by 2030.

4. You Have the Power to Make a Difference

Companies with popular brands have the power to raise awareness about important problems and make a positive change. They are in a position to reach a lot of people with their message and inspire them to get involved in supporting good causes.

However, if your agenda is only to make PR on the back of a good cause, this might backfire and cause you more losses than not doing anything. Being ethical should become part of your brand’s philosophy and identity, and not a marketing trick.

For example, El Naturalista is a Spanish shoe brand that donates 2.14% of its profits from sales to socially-minded projects.

The company has, so far, helped with the construction of a warehouse for fishermen affected by a tsunami in Japan, a chicken farm for a children’s home in Tanzania, and a house for mothers in Peru.

The company also has ongoing projects they support such as the construction of a canteen for a school in Haiti, and an orphanage for abandoned children in Ethiopia.

The company is also working with various non-profit organizations to support other local causes. They are environmentally active, employ innovative eco-solutions, and work to improve their energy efficiency.

The shoes they produce are made from environmentally-conscious, recycled, biodegradable, and natural materials, through a responsible manufacturing process.

Their cause is an integrated part of the brand’s philosophy and this makes them a clear choice for customers.

5. You Should Answer the Call for Change

People nowadays are aware that the time for irresponsible management of human and environmental resources is over. Brands need to step up and make some changes if they are to remain relevant and keep their customers.

Younger generations are more than willing to support ethical brands and pledge their loyalty whenever they have a choice. The impressive 54% of Gen Zs and 50% of Millennials are ready to pay an extra 10% if the products are sustainable.

Consumers today don’t just buy things that look good. They do research first and then make informed choices. If you want to keep your customers, you have to show that you are better than your competitors and that you not only offer high-quality products, but care for the environment and people.

Of course, a business cannot simply forget about profits and become all about charity. For most companies, this would simply be unrealistic and unacceptable. But the fact is, that you don’t have to choose one or the other.

A good example here is the B Corp company 4ocean. They make products from recycled ocean plastic and use the profits to help fight against pollution. Each product sold sponsors the clean up of one pound of trash found in the ocean.

The company was founded in 2017 by two friends who visited Bali on a surfing trip and were stunned by the amount of plastic the ocean washes-up on the beaches every day.

Since then they have cleaned 13,615,667 lbs of trash and counting.

4ocean has operations in the US, Haiti, Guatemala, and Indonesia. They hire local ships and crews to take part in the cleanup and document every step of the process. The plastic they have collected is recycled into products, or disposed of through thermal treatment plants to be converted into electricity. They run a climate-neutral business by planting trees to neutralize the carbon effect of their operations and donate 1% of their profits to environmental non-profit organizations.

The company produces bracelets, iPhone cases, and single-use plastic alternatives. It targets people from all generations and inspires them to care about their cause. They are not a non-profit organization, they are a business, but they manage to help out the environment anyway.

6. Small Steps Matter

Not every business can be entirely dedicated to the greater good. However, there are many steps you can take towards improving your environmental and social policies. And you don’t even have to start with major changes.

What counts for the Zero Waste movement, applies with full force to company ethics:

Here are some actionable steps you can take to improve your brand’s ethics:

  • Find a cause to support and/or sponsor.
  • Neutralize your carbon impact by regularly planting trees.
  • Reduce, Reuse, Recycle.
  • Encourage diversity and inclusivity in your team.
  • Provide good working conditions.
  • Offer reasonable wages to employees.
  • Care about your team and provide social benefits.
  • Make sustainable products.
  • Work with local suppliers and distributors.
  • Set up a sustainable manufacturing process.
  • Invest in reusable energy sources.
  • Switch to hybrid or electric vehicles.
  • Run a legitimate business.
  • Partner up only with other ethical companies.

These steps will help you improve your business strategy, your team’s well-being, your carbon imprint, and your impact on the planet and society. Consider which ones are the easiest to accomplish and start by implementing them. Work your way up to the more complicated ones and keep in mind that by doing so you are not only making your company better but also the world in the process.

If you decide to go big, you could even consider launching an ethical brand to complement your existing one(s). You can dedicate the new brand to a single or multiple causes and donate a portion of the profits.

However, it’s not advisable to have only one brand that is socially and environmentally conscious while the others in your company exploit harmful resources or have unethical labor conditions. As mentioned, your ethics should be a part of your company’s philosophy and should be incorporated into all aspects of your business.

Recap

The world is changing and the core values of a company are becoming what draws the line between winning the customers over and losing them for good.

Businesses have a responsibility towards the future and the decisions they make today will impact how the world looks tomorrow. This influence should be used to make a positive change and show conscientiousness for the environment and society.

While making your brand more ethical won’t happen overnight it’s always better to start small than not do anything at all.

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