Everyone can probably agree that ethics is defined as “a set of moral principles.” The moral part is where we have historically diverged. Our definition is guided by our own personal convictions, so as a society we lack a consensual approach to putting ethics into action.
During these uncertain times, we’re demanding clear ethical solutions when it comes to ethical practices. We know our consumption choices not only have implications for ourselves—but also for our society and our world.
There’s really no straightforward classification or universal rating system for what constitutes an ethical brand. Yet we’ve developed descriptors like ‘eco-friendly’ and ‘regenerative’ to define and guide our seemingly righteous consumer decisions. Without clear examples to back up these claims, there’s a risk that these ethical buzzwords will become hollow.
A Company’s Values are Part of Its Brand
Vague messaging is a root of poor branding practices, like greenwashing. It’s important that ethical brands deliver specific content around their values in order to build trust and customer loyalty. Companies should build a value system as part of their brand concept, and help customers see specific truths behind their statements.
So, where do we start?
By examining the elements that make up a brand, we can start to see a clearer picture of ethical practices. There’s opportunity at every step in the supply chain—from materials to labor to packaging to customer service. These are all areas to assess before declaring a brand ethical.
How A Company Treats All People
Every consumer brand touches a lot of people. Ethical companies enforce fair and safe labor practices, including wages, across all facilities. They audit the factories of their suppliers and partners to ensure they too are employing moral practices. They also create opportunities for capacity building like professional development.
Amsha Studio wanted to help create pathways to economic independence for women in Africa. By providing market access to female-led weaving co-ops, Amsha not only provides fair wages, the company also offers skill training and collaborative work environments for their partners. By centralizing these values in their marketing efforts, Amsha shows customers the social impact of their purchase with specific stories and tangible data.
Equitable practices should extend to the customer experience. Ethical companies truly listen and respond to their customers by offering excellent customer service. They ensure their offerings and marketing touchpoints are accessible. For example, a company can choose to build a website that aligns with Web Content Accessibility Guidelines or offer closed-captioning on their video content.
Ethical companies have public-facing, actionable Diversity, Equity, Inclusion, and Belonging statements that proclaim specific future goals. They report on their progress, and actively evolve their course to meet new objectives as they arrive.
Levi Strauss & Co. touts equity and justice in their advertisement campaigns, and it is also making headway in its corporate practices. The mega brand has announced several tangible ways it will bolster Diversity, Equity, and Inclusion efforts, including conducting anti-racism and racial equity training, forming employee resource groups, and launching a career path program for retail/distribution center employees who aspire to join the corporate team.
Ethical companies are increasing transparency in every area of their brand, including leadership. According to Sprout Social, 56% of customers say it’s important to them that a CEO takes a stand on public issues. Their research revealed that when a CEO voices concern, 38% of consumers will increase their brand loyalty. These actions must be done with empathy and align with the company’s core values.
Recently, many brands have seized COVID-19 and the Black Lives Matter movement as a way to express their humanity and connect to their audiences. If the statements do not align with the brand’s historical actions, companies are often called out for hypocrisy and virtue signaling. Ethical brands ensure their business is committed to supporting social issues for the long haul by offering action items and holding themselves accountable.
How a Company Impacts the Planet
Businesses of every size can have a monumental effect on the environment. Ethical brands aim to reduce, reuse, and recycle in any way they can. From designing their offices to sourcing raw materials to manufacturing goods, ethical brands incorporate sustainable practices that help reduce energy use and carbon emissions. These companies consider resource use and waste management at every stage of the process.
One of Ritual Vitamins’ main marketing focuses is its traceable supply chain. The brand offers detailed descriptions of how its ingredients are sourced, cultivated, tested, and verified. Ritual’s shipping experience is nearly 100% recycled materials, including the supplement bottles. And to round it out, Ritual employs a carbon offsetting program aimed at erasing the footprint of each delivery.
In a recent study conducted by IBM, nearly 80% of respondents indicated sustainability as an important factor in their buying habits. More than 70% of these individuals said they would pay upwards of 35% more for brands that are sustainable and environmentally responsible.
While there’s many actions and avenues to focus on, building a sustainability plan is the first step. Incorporating these plans into your marketing efforts will provide eco-friendly proof for your audiences.
How a Company Uses Its Profits
Ethical brands offer fair prices, and often offer cost transparency. A Harvard Business School study showed that cost transparency is a powerful tool to increase sales, noting that websites that disclose information on what it costs to make a product experienced a 44% increase in sales.
Fashion has been an exciting industry to watch in terms of how ethical practices are marketed. In 2017, Everlane disrupted the fashion industry by offering “radical transparency” in its pricing strategy. However, when customers took a look at Everlane’s supply chain, it was clear the brand fell short. This was a great lesson of how having one ethical selling point will not make you an ethical brand. Companies must take a holistic approach to examining the actions and motivations that define their brand values.
There are many ethical practices when it comes to allocating a company’s profits. Ethical brands often invest a portion of their annual earnings into their community or donate a percentage of each sale to a specific cause. Some brands also donate their products to underserved communities, like Allbirds and Thrive Market.
Aliado’s Changemaker partner Janery Pet Beds donates 5% of every sale to Richmond Animal League, a local pet shelter. This luxury pet bed company has tied its mission to pet rescue, and promotes this value across all marketing. During the COVID-19 pandemic, Janery donated a portion of face mask sales to food banks, and greatly expanded its giving efforts to include service organizations. The company reports on its giving efforts every quarter, helping customers understand their impact.
With the help of loyal customers, ethical companies are upending the misconception that business practices like sustainability and transparency are costly. In fact, there are so many ways that ethical practices drive more profit: employees are more productive and less likely to leave; talented people, vendors, and suppliers are more inclined to work with ethical companies; consumers respond positively to products and feel connected to messaging.
How to Promote Your Value-driven Business
Branding is where a company’s ethical goals and objectives can really shine. A successful brand strategy is focused on the four “V’s”: Vision, Voice, Visuals, and Values. Ethical companies continue to see tremendous growth and customer loyalty when their values are at the center of their brand.
At Aliado, we see Value as the secret to holistic success. When you push ethical practices and social impact alongside profit, you create a strong value system audiences will respond to and grow with.
Ready to Get Started?
Aliado is here to help ignite your brand through value-driven marketing, strategy, and design. We would love to hear more about how we can help bring your vision and purpose to the spotlight.