Ethics in FMCG
Ethical practices are no longer just ‘nice to have’, or the choice of a select few eccentric brands. Consumers are changing their habits to reduce their impact on the environment and their fellow human beings. They expect businesses to live up to those standards, and to present an offering that compliments and enables them.
Here are some of the areas where shoppers are most conscious of business ethics, and where FMCG companies can ensure their practices meet their expectations.
Single-use plastics have been under scrutiny for quite a few years now, especially after the mega-hit David Attenborough series Blue Planet II. Not only did the documentary bring plastic’s impact to the attention of millions, but it moved the government to change the law on single-use plastics.
Most consumer plastics are very visible, so the extent of the problem is prominent — consumers are conscious of them, and they hold businesses accountable.
Because FMCGs deal in high volumes, plastic packaging is a particular concern. Increasingly, shoppers can’t abide plastics that aren’t at least partially recycled, and completely recyclable. They also appreciate efforts to reduce the overall plastic volume involved in their goods — the results of greater packaging efficiency aren’t always obvious, but brands can emphasise and communicate them. There are also more striking changes to make, like offering refill pouches rather than only selling whole new bottles.
The effort and commitment are attractive to all demographics, and younger generations are particularly conscious of them.
It’s one thing to ensure all of your practices are ethical, but that could all be undermined if your suppliers aren’t doing the same.
- Many ingredients, like palm oil, have traditionally contributed to environmental impacts like deforestation. FMCGs should ensure that their suppliers have signed up to appropriate ethical pledges and are operating sustainably.
- Of course, many ingredients are also farmed or picked unethically, with workers paid far below a living wage for long hours, sometimes in dangerous conditions. Naturally, businesses wouldn’t want to support any form of exploitation or indirectly endanger any lives.
- If your business is making great strides to reduce its carbon footprint that will be seriously undermined if suppliers aren’t. You may be once or twice removed from it, but if it’s your supply chain, it’s your pollution.
FMCG supply chains are complex, so can easily disguise unethical practices. It can take determination and persistence to ensure that yours is untainted, but it’s worth it — 75% of Millennials will pay more for an ethical product.
People will forgive imperfection, but they won’t as easily forgive dishonesty. Admitting your ethical shortcomings and detailing your efforts towards improvement will be a publicity triumph. Hoping that the public won’t discover your problems is a PR disaster waiting to happen.
Addressing your issues before someone else demonstrates your genuine commitment to doing better. If you’re not proactive, it looks like you’re only sorry you were caught.
Owning and tackling your weaknesses is not limited to your ingredients and suppliers — you should place your own corporate practices and structures under the microscope as well, with things like diversity and inclusion and corporate responsibility at the forefront of your mind.
Speaking of dishonesty, no FMCG brand should ever be guilty of greenwashing. Greenwashing is stating or implying that your business or product is more environmentally friendly than it really is, and sooner or later, it will be discovered.
A lot of greenwashing isn’t an outright lie, it’s just misleading. Let’s say, as per this example from Investopedia, that you advertise your product as containing ‘50% more recycled content than before’. Sounds great, but if it previously had 2% recycled material, and now has 3%, that’s a negligible improvement that you presented as significant. No consumer will take kindly to being duped.
A B-Corp certification tells consumers instantly that your business ethics are sound. As a piece of branding, it helps socially and environmentally conscious shoppers choose their product without having to research the business practices and supply chain behind it. It also rewards ethically conscious businesses with the knowledge that their efforts have been successful.
In the same way that deeply comprehensive business ethics once belonged to relatively few companies, B-Corp certification is well on the way to becoming the standard — by not having it, a brand will put itself at a competitive disadvantage.
The people to transform the business
As with everything in your business, ethics starts with your people. Arguably, the most important quality is that they care deeply — transforming business practices is a long and complicated process, and if someone has no passion for it, they won’t do it well, or even at all.
Of course, experience is a desirable addition, and you would like to find people who have successfully driven and overseen that kind of transformation before. As that experience becomes more sought-after, it’s going to be harder to secure.
That’s where you need to partner with search experts with FMCG heritage, and a track record with B-Corps, challenger brands, and large blue-chip clients. Call 020 7042 3800 to speak to the Lime Talent team about finding the people who can make your brand the most ethical business it can be.