Have Ethical Trading and CSR made any difference?

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Of course it has, but it is an evolution that involves the way that consumers think about the world, products and services as well as the way that companies do business globally.

For the recipients of funds all over the world, it certainly makes a difference. Fair Factories.org published an article that says:

“Starbucks contributes 5 cents from the sale of each bottle of Ethos water to help children around the world get clean drinking water. IKEA donates $2 from the sale of specific stuffed animals to help children recovering from armed conflicts in Angola and Uganda. Target offers a First Aid and Emergency Preparedness Kit and gives $10 from each $30 kit to the Red Cross.”


For children drinking clean water, being comforted through the trauma of armed conflict and being rescued from emergency situations around the world, ethical trading and CSR has made a huge difference.

Customers feel better and their feelings are reflected in product sales. The same Fair Factories’ article also mentions Dove’s campaign for real Beauty (shown in the video above.)

“After launching its Self Esteem Fund this year with a $50,000 donation and campaign about real beauty, Dove saw sales of products in its ads skyrocket 600 percent.”

And this new way of doing business is creating opportunities for start up companies consultants and specialist organizations. The Fair Labor Association in the U.S. tells us:

“Since 1999, the Fair Labor Association (FLA) has helped improve the lives of hundreds of thousands of workers by holding companies accountable to the FLA Workplace Code of Conduct, inspecting and monitoring factories around the world, and developing innovative, sustainable solutions to labor abuses. Fair Labor Association (FLA) affiliates are dedicated to protecting the rights of workers around the world. They include colleges and universities, socially conscious companies, and human rights, civil society, and other non-governmental organizations (NGO's).”

In the UK, according to an article in New Consumer.com:

“SEE Potential, a pioneering organisation set up to track ethical business practice, has revealed that over half of UK managers say CSR has a valuable role to play in business. Forty-nine per cent of managers also said their company could generate new business by having genuine social, environmental and ethical policies (SEE) in place. An impressive 62% said that SEE policies enabled them to retain staff more easily, and just over a third said that having SEE policies even helped them cut costs.”


Organizations and companies are even banding together, as in the case of the
Fair Factories Clearinghouse (FFC), a non-profit, collaborative industry initiative to manage and share audit information between companies.

So the trend toward ethical and socially responsible business practices is making a big difference, and promises to continue to do so.

If you don’t feel a difference, what changes could you make to reap the benefits?

Are Eco-Ethical Clothing Lines Taking Over?

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As ethical and environmental clothing becomes more popular, more and more companies are offering lines that cater to the customers demands. White Apricot is a website that offers an online newsletter as a “go to place for the latest trends, news and information on eco fashion, organic skin care and natural cosmetics, as well as other cool eco and socially conscious products and services to incorporate into your lifestyle.”

They give their picks for the top eco-friendly clothes and accessories, tell readers which celebrities have been spotted sporting which brands and styles, and follow mainstream fashion designers who are now creating eco-friendly clothing.

One of their lists of top picks is a list of websites that offer a selection from several eco-ethical clothing lines. Here are a few of the fashion lines mentioned:

· Stewart + Brown  - A clothing line featuring designs in organic cotton, Mongolian cashmere, and factory surplus textiles for sustainability. They practice and promote a symbiotic and harmonious relationship between business, community, and nature.

· Nicole Bridger - Creates designer clothing with a social conscious. Using  sustainable fabrics, they strive to have a positive relationship with everyone who works to create their clothing.

· Ecoganik - Ecoganik presents a fusion of fashion and eco-consciousness. They offer a fresh look while holding to the principles of quality and eco-conscious living.

· Del Forte Denim - Del Forte Denim is proud to be part of a strong and growing movement dedicated to sustainability. DFD educates farmers, agricultural students and the general public on ways to increase the sustainability of farms and supports those farmers who are sustainable and/or organic.

· Loomstate - Loomstate was founded as a casual brand dedicated to creating demand for certified organic cotton using socially and environmentally responsible methods of production.

· Moral Fervor - Moral Fervor, shown in the video clip above, strives to create an ecological model of business through their clothing. Using only bio-based fabrics that are organic and sustainable, they are conscientious about every level of business-from the concept of each collection, design, sourcing and production. Each collection is inspired by an environmental or social topic, giving each collection a level of depth and meaning that they feel is an important part of life.

· Grace & Cello - All the fabrics used to make their clothes have been chosen carefully, in order to minimize the impact on the environment. They also make their clothes in sweatshop-free working environments in their neighbourhood in Montreal, because they believe environmental sustainability is impossible without community sustainability (and vice versa).

· Kelly B - Kelly B creates unique and comfortable clothing for the conscious consumer. From fair labor practices to an environmentally friendly product, Kelly's first two lines have been produced with all organic cotton and other natural fibers including bamboo and organic cotton.

· Sameunderneath - Sameunderneath is not only a clothing company, but also a belief in life itself. Their objective is to unite those who don’t judge others by religion, race, hobbies, color, creed, and/or sex. They are not a clothing company for one specific group; we’re a product lifestyle company for the world. Sameunderneath’s mission is to change the way people look at each other.

· Sublet Clothing - Sublet Clothing seeks to be a means for positive social change, while fostering a collaborative community. They are socially and environmentally responsible in the way they source, manufacture, and run their company.

With so many choices for ethical and environmental fashion outside of the mainstream retailers, is it possible that these lines might give the big names a run for their money?

Could this be the future of fashion?

Psychographics & LOHAS—Are you Effectively Reaching the Eco-Ethical Consumer?

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This video is your window into the LOHAS 10 Forum, held in Santa Monica, California. For the tenth year, it brought together executives interested in developing awareness of and expanding the LOHAS market-estimated to have the spending power of $208 billion in the U.S. alone.

If you don’t already know what LOHAS means, it’s “an acronym for Lifestyles of Health and Sustainability, a market segment focused on health and fitness, the environment, personal development, sustainable living, and social justice”, according to lohas.com.


This label was created by the Natural Marketing Institute and is a good example of psychographics. Traditional
demographics look at characteristics of people that include age, income, education, occupation, household size, home ownership and home value, among other factors. But psychographics delves deeper into people’s lifestyles and behaviors, including their interests and values.NMI tracks more than 100 drivers to consumer behavior and divides the market into five categories:

  • LOHAS — very progressive on environment and society, looking for ways to do more; not too concerned about price (16%).

  • Naturalites — primarily concerned about personal health and wellness, and use many natural products; would like to do more to protect the environment (25%).

  • Conventionals — practical, like to see the results of what they do; interested in green products that make sense (e.g., save money) in the long run (23%).

  • Drifters — not too concerned about environment, figuring we've got time to fix environmental problems; don't necessarily buy a lot of green products, though may like to "be seen" in Whole Foods to enhance their image (23%).

  • Unconcerned — have other priorities, not really sure what green products are available, and probably wouldn't be interested anyway; they buy products strictly on price, value, quality, and convenience (14%).

A recent article in Business Green suggests a few different ways to reach these target segments.

A general approach is one way. LOHAS business director at NMI, Gwynne Rogers, explains, "LOHAS consumers ask more questions about how the ingredients of materials were sourced and how they were processed and shipped, which is why you see them interested in things like fair trade," explains Rogers. Ted Ning, director of the LOHAS conference, notes that companies are folding green and ethical concerns into their product propositions at a more fundamental level.

But Nate Elliott, senior analyst at Jupiter Research, recommends using social marketing tools that sit well with the concept of green purchasing as a consumer lifestyle choice. Using social networks to engage these customers, along with frequent, informative messaging about green issues, can help build the type of brand loyalty that LOHAS consumers are known to have.

Taking advantage of social media may be one of the most labour-intensive forms of marketing, but it could also build the type of brand value that companies crave. If the message is sincere, and companies can demonstrate that they practice what they preach in their operations, then the signs are that LOHAS consumers will be more than willing to listen.”

So where do you need to focus to reach these savvy consumers? Do you need to make improvements within your company? Or do you merely need to communicate better with the public?

Can you build a start-up on an ethical foundation?

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Yep!  Case in point: Honest Tea.

In earlier post entitled “Why are businesses rushing to become more socially responsible?” we talked about examples from the book “Stirring it Up: How to Make Money and Save the World”. One of the examples used is the story of Honest Tea.

Honest Tea was born when Seth Goldman and Barry Nalebuff decided to combine their passion for busines and their desire for a thirst-qunching alternative to overly sweet sodas or tasteless juices. The following is paraphrased from their website:

Barry had just returned from India where he had been analyzing the tea industry for a case study, and had learned that most of the tea purchased for bottling by American companies was the lower quality dust and fannings left after quality tea had been produced. To describe a bottled tea that was made with real tea leaves-he used the name Honest Tea. When Seth heard the name, the bells started ringing-it was the perfect name to fit an all-natural brand that would strive to create healthy and honest relationships with its customers, suppliers and the environment.

Seth took a deep breath, quit his high-finance job, and started brewing batches of tea in his kitchen. Five weeks after taking the plunge, he brought thermoses of tea and a bottle with a mock-up label to Fresh Fields (Whole Foods Markets). During that meeting, the order came for 15,000 bottles, and so did the heavy pause as Seth’s mind raced, trying to figure out how they would produce that much tea. They were, suddenly, in the tea business.

That was ten years ago. Today, Honest Tea can be found in glass bottles, plastic bottles, barely sweetened, or even ‘a tad sweet’ in tens of thousands of stores across the US. The company has applied its passion for social responsibility to initiatives in the environment and to creating partnerships with the growers, cultures, and communities behind the teas.

Their History:

  • 1998-They finished their first year with sales of $250,000 offering five varieties of freshly brewed and barely sweetened tea. 

  • 1999-Their second year added a few more varieties of bottled tea, and their first organic tea, Decaf Ceylon, joined the portfolio as a naturally decaffeinated black tea. They landed lots of new accounts, closing with $1.1 million in sales.

  • 2000-Year three put them into the tea bag business in addition to their bottled beverage business. They  added another organic variety, Jakarta Ginger, and launched eight varieties of tea bags (five organic). They became the fastest-growing bottled tea brand in natural food stores and sales weighed in at $1.9 million.

  • 2001-In their fourth year more than 50% of their offerings became organic. They  introduced Community Green, an organic bottled tea created in partnership with City Year, a non-profit organization that brings together young people for a year of community service. Fourth year sales were $3.2 million.

  • 2002-Year five introduced an organic herbal tea made with chamomile and dried limes-limes purchased from a Guatemalan farm cooperative, becoming their first US customer. They also introduced an herbal tea produced in partnership with a farmers’ cooperative in South Africa. In this fifth year they became the best-selling bottled tea brand in the natural foods industry, claiming seven of the top ten best-selling varieties and sales topped $4.6 million.

  • 2003-Peach Oo-la-long, the first Fair Trade certified bottled tea and Green Dragon Tea were their two most successful product introductions to date and the two most successful new beverages launched in the natural foods industry in 2003. Honest Tea became #117 on the Inc. 500 list of the fastest growing private companies; the highest ranked food and beverage company on the list. They were awarded the grand prize for the “Dream Big Award” sponsored by Inc. and Visa. Sales hit $5.5 million.

  • 2004-This next year gained Honest Tea full USDA organic certification on all twelve varieties of their bottled tea and eight tea bag varieties. With this certification, Honest Tea became the only tea company to offer an entire line of organic bottles and bags. They introduced a line of tea in PET-1 Bottles which was met with rave reviews and won several packaging awards. The company was again listed on the Inc. 500 list of fastest growing private companies.

  • 2005-The company made its first foray into a non-tea product with the introduction of Honest Ade Limeade and Cranberry Lemonade organic citrus quenchers.

  • 2007-Welcomed new investors and board members with the launch of nine new products, including Honest Tea’s first yerba mate drink, and launched their much-anticipated new line, Honest Kids, with three flavors of low-sugar organic thirst quenchers.

  • 2008-Honest Tea celebrated their 10th anniversary in February of 2008 and also announced that The Coca-Cola Company purchased 40 percent of Honest Tea, presenting opportunities for even further growth and expansion nationwide.

How’s that for success on an ethical foundation? 

What can you do to meet or beat their records?

Is the web helping to police corporations?

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Yes it is, and it is making a huge impact on the way companies do business.  The video above was posted to You Tube 12 years after it was released by the National Labor Committee. Entitled “Zoned for Slavery:The Child Behind the Label”, it introduced tens of thousands of people to the harsh realities of the global economic system when it was released in 1995. Massive distribution among universities, high schools, religious organizations and unions has given way to global availability online, where it continues to be relevant iand will continue inspiring action against corporate misconduct and sweatshop abuses.

From an earlier GWG post entitled “Can consumers really make businesses focus on ethical business practices?” we featured a video interview with George Pohle, VP and Global Leader, Business Strategy Consulting, at IBM Global Business Services talking about their recent Study on Corporate Social Responsibility. In that interview he said:

“One of the most critical drivers of the importance of Corporate Social Responsibility in the last few years has been the internet. What it’s done is that it’s allowed consumers two things:

  • one is greater visibility into the actions the companies are actually taking, so they know more about what companies are doing today than they ever have in the past.
  • The second thing that it’s doing is it’s allowing consumers to band together to create advocacy groups much easier than they could ever do in the past, and to exert influences on corporations once they’ve banded together.

So as a result of this, companies are doing two things:

  • one is they’re increasing the transparency with which they operate so that they are not being pried open by consumers but they’re rather sharing much more openly and leveraging the power of the visibility that the consumers have to their benefit, i.e. they want to know when something’s amiss and they will volunteer to take of problems when they arise.
  • The other thing that they’re doing with respect to the advocacy issue is to drive new opportunities to collaborate and interact with the consumer, so that they’re getting feedback and support from the consumers on a day-to-day basis relating to both their products and services as well as the way in which they conduct business within different communities or even overseas.”

The abstract from this IBM Study puts it this way:


The Internet has already triggered lasting change in the structures of industries and the ways businesses create value. Today, ubiquitous connectivity is creating new relationships among businesses, customers, employees and partners. People now have access to massive amounts of information — and opinions — about products and company practices. This information is available in every part of the globe, every minute of every day.

But the Internet does more than spread information. It's also a place where people get together to discuss and organize activities to bring about social change. As a result, sustainability, both for societies and enterprises, will require mutual accountability — a more collaborative relationship that allows each party to reach a shared understanding and thrive.

This collaboration is particularly challenging because it takes place during a time of increased visibility of corporate actions. It's also a time when customers' perceptions of companies and their consequent purchasing behaviors are fundamentally changing. And yet, because that means significant financial impact for businesses, CSR is no longer viewed as just a regulatory or discretionary cost, but an investment that brings financial returns.

Information — From visibility to transparency
In today's open environment, companies are finding it necessary to take the wraps off information they once considered private or proprietary. With
relentless pressure from watchdog groups, “need to know” restrictions tend to fall away. So, visibility is best met with a continuous exchange of information — or transparency.

What seems like an insatiable thirst for information is in reality a drive for relevant information that can reduce complexity and increase comfort level with purchase decisions. Companies that figure out how to make information relevant will win customers' trust — and build a powerful platform for growth.

You can find more information and download the full report by clicking here.

Here are some more websites that act as watchdogs and rallying points supporting workers’ rights:


And for those who aren’t sure what sweatshops are, there is an entry in Wikipedia.
There are certainly more sites and organizations, and a search of the internet will reveal them.

What can you do to make sure that you don’t end up being listed as a company that violates your customers ideals?

How can you make sure that your company lives up to these new global community standards?