Renewed Consumer Attention on Ethics

Big Idea

European consumers are keeping careful watch over corporate ethics. Businesses are experiencing a spike in customer interest for ethically sourced products. Last year in the United Kingdom, consumers spent 30% more on 'ethical' products and services than in 2019 and boycotted brands they felt fell short. Companies face increasing pressure in European markets to embed and demonstrate ethics across functions and make it more visible in their overall business strategy.

RepTrak Perspective

Demonstrating ethical integrity is a grounding pillar for reputation growth. "Behaves ethically" in 2021 consistently stood in the top ten most significant Factors in the Netherlands, Spain, and the U.K. Stakeholders' expectations for ethical behavior includes adherence to law, building an honest workplace, and sustainable manufacturing. Businesses in Europe must proactively demonstrate ethical operations or risk stakeholder backlash.

Reputation Context

How do perceptions of ethical behavior differ among countries?

Generally, "Behaves ethically" scores 5 to 6-points higher across customers than the general public in the Netherlands, Spain, and the United Kingdom. Although more positive perceptions exist among customers, negative or neutral perceptions across the European public may hinder long-term success.

• The Netherlands' perceptions of ethical behavior remained stable in 2021, standing at 66.3 in Q4 2021. Here, companies must strive to elevate neutral recognition with the Dutch public.

• Spain had the 3rd lowest "Behaves ethically" score across the 18 countries RepTrak measures in EMEA. With a 6-point decrease from the first to last quarter, prioritizing conversations on ethical operational accomplishments is critical for Spanish leaders.

• In the U.K., where demand for ethical products is climbing, stakeholders are increasingly critical of corporate ethical operations. A slight 1.4-point decrease in "Behaves ethically" from Q1 – Q4 2021 last year yields a warning sign for businesses in 2022.

Why is ethical behavior important?

Stakeholders withhold supportive behavior without concrete demonstrations of action. With a steep decreasing "Behaves ethically" score in Spain, the country also saw an 8% decrease in advocates across "Benefit of the doubt" and "Trust to do the right thing" from Q1 – Q4 2021. In contrast, these two behaviors of stakeholder intent remained unscathed in the Netherlands alongside minor scores changes for "Behaves ethically." Ethical behavior is not the only contributor to giving corporate licenses to operate, but its deterrence can quickly escalate lingering skepticism.

Convo Starters

How can you ensure authenticity when delivering corporate statements on fair business accomplishments to your stakeholders? 

What steps has your company taken to identify your consumers' definition of positive ethical behavior? 

What does ethical behavior look like for your internal and external stakeholders?