There is a major movement towards ethical business practices, including transparency around supply chains, fair pay for workers, sustainable packaging, and generally doing better for people and the environment. We see examples of this in big business, with moves such as Costco raising their base wages year on year above and beyond the government requirements and McDonald’s investing in up-skilling its employees. But it is also translating into the day-to-day practices of small and medium businesses.
If you are considering whether you should review your practices and align them with an ethical business model, you might be weighing up the pros and cons. Here are five tangible benefits to having ethical business practices.
Real Contribution to Diversity and Inclusivity
One of the best changes you can make within your organization is to introduce inclusive employment policies. By focusing on creating equal opportunities for people from different racial backgrounds, people of varying ages, and people with disabilities, you open up the talent pool for your organization and support a fairer system for all. You will also ensure a broad range of perspectives and ideas to improve your business brainstorming sessions.
Following the above point, an inclusive environment will also ensure that you have more fulfilled employees. The foundation for inclusive employment is that everyone is treated equally, with respect and consideration. Each person has an equal opportunity for advancement, and their ideas and contributions are valued.
These are also the pillars for a wonderfully supportive and happy workplace. If you are taking this approach, your employees will feel valued, which will equate to motivated, dedicated, and loyal staff members.
Better for the Planet
Ethical business practices don’t just apply to your people but also to the materials you use in your products, your packaging, and your manufacturing processes. Sustainable manufacturing means that you consider how to reduce your impact on the environment.
You might make your business more sustainable by implementing a more energy-efficient production process and using a renewable resource like bamboo. There is also a big rise in compostable postage bags and recycled materials over their less environmentally friendly counterparts.
Because there is such a big consumer push towards ethical business, investors recognize the opportunity to get in on the ground floor, so to speak. By choosing ethical business practices and communicating these clearly as part of your business ethos, you will attract a higher number of investors.
The benefits for the investor are two-fold. First, they see the rise of the conscious consumer and so expect to make money on their investment. Second, they can support their own personal beliefs and know that they’re having a positive impact on the world around them.
A Boost to Your Bottom Line
While you may assume that an ethical business that pays workers fairly and ensures the use of environmentally friendly products is not profitable, the reverse can be true. Companies that use unethical practices often falter when their poor practices are uncovered. For example, when the market discovered that Volkswagen was cheating on the CO2 emissions tests for over 11 million vehicles, their profits fell over 20%.
Just to prove the point even further, Neilson and Unilever have conducted consumer surveys that demonstrate that most consumers are happy to pay more for products they believe are sustainably and ethically produced.
2021 is the perfect time to review your business practices and consider how you can be more inclusive, sustainable, and transparent with your customers. Your employees and your bottom line will thank you.