89% of consumers say it is important to them that a small business has ethical values, according to a survey conducted by Money.co.uk.
As consumer awareness grows around the consequences of their buying choices, the focus has turned towards the ethical conduct of enterprises – with particular attention on small and medium-sized businesses (SMEs).
The business credit card provider surveyed 2,002 UK consumers to ascertain how an SME’s ethical values might affect their customer base.
The study found that the majority of people were committed to buying from ethical businesses (70%). 30% went further, saying they actively chose not to purchase a product or service because they were dissatisfied with a business’s ethical practices.
Over half of Gen Z respondents said they have chosen not to purchase a product from a business if they were dissatisfied with its ethical values.
Just over half (51%) of the total survey cohort said they would be likely to pay a premium of up to 10% for products or services from a small business that is known for its ethical and green practices.
The survey clearly suggests SMEs should factor this into their decision-making when it comes to sourcing products or paying wages, as while going down more ethical routes may increase costs, they may be able to increase their prices accordingly to ensure the profit margin stays the same.
Two-thirds (66%) of respondents also agreed with the statement: ‘Small businesses have a responsibility to contribute positively to societal and environmental issues’. With this in mind, SMEs should consider factoring this into their growth strategies and communicating this with their customers. 71% of 24-35 year olds agreed with the statement.
According to the survey, the top five ways UK consumers think small businesses can be greener/more ethical, are:
1. Sustainable sourcing of materials (56%)
2. Fair treatment of employees (51%)
3. Minimal environmental impact in production processes (49%)
4. Transparent supply chain (39%)
5. Community engagement and support (36%)
In addition, an SME’s banking and finance practices can contribute to them being more ethical. For example, just over a fifth (21%) of those surveyed thought small businesses could be more ethical by not using banks that contribute to fossil fuel production. Furthermore, a fifth (20%) thought small businesses could be more ethical by using ethical business banking e.g. an ethical business credit card.
The survey also revealed that:
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Nearly 3 in 5 (57%) said they would prefer small businesses to communicate their ethical practices on their website.
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Just under half (49%) said they do/would prefer small businesses to communicate their ethical practices on social media.
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Over a third (35%) said they do/would prefer small businesses to communicate their ethical practices on labels.
