New research from OpenText has revealed more than half (57 per cent) of Australian consumers would never buy from a brand again if it was accused of working with unethical suppliers.
Instead, they would look to find an alternative brand that engages in responsible sourcing. The survey findings also highlight the pandemic has made consumers more mindful of the impact of their purchases: post-pandemic, 84 per cent of consumers plan to prioritise buying from companies that make it clear they have ethical sourcing strategies in place; this compares with 73 per cent who said pre-pandemic, they prioritised buying from companies with such strategies in place.
The new data – from a survey of 1,000 Australian respondents – highlights the importance for brands in proactively ensuring all suppliers in their supply chain operate ethically. The poll considered the extent to which environmentally sustainable and socially responsible business practices matter to the Australian public and influence their purchasing behaviour.
The business case for ethical supply chains
Nearly half (48 per cent) of Australian consumers judge a brand based on not just its actions but the actions of its suppliers as well. In fact, consumers place such value on buying from ethical brands that well over three quarters (81 per cent) are willing to pay more if they can be sure a product has been ethically sourced or produced. More than three in ten (32 per cent) are willing to spend between 25 per cent and 50 per cent more for that product.
Purchasing ethically sourced or produced items matters to 77 per cent of Australian consumers, though just under a quarter (24 per cent) admit it has only started to matter to them in the last year or so. The majority (81 per cent) of Australian consumers are even willing to compromise convenience, such as accepting a slower delivery, if they can be sure an item has been ethically sourced or produced. Over half (59 per cent) agree they would only opt for this sometimes or for certain items, but more than a fifth (22 per cent) are always willing to make this compromise.
“Creating an ethical supply chain requires having visibility into every supplier,” said Lou Blatt, senior vice president and CMO at OpenText. “The ethically minded consumer is exercising more control over their buying power. Brands can no longer claim they act responsibly if they have no visibility into their operations or those of their suppliers.”
Rising demand for ethical business principles
When shopping online, 49 per cent of Australian consumers now make a conscious effort to purchase locally sourced or produced items to support local businesses and reduce their carbon footprint.
Almost two-thirds (65 per cent) of Australian consumers agree businesses have a responsibility to ensure their suppliers abide by an ethical code. More than half (58 per cent) believe that businesses that cannot monitor where their goods have come from and don’t know if suppliers are sourcing goods ethically need to rethink their supply chain.
Increased focus on transparency and accountability
Nearly two thirds (61 per cent) of Australian consumers agree government should introduce regulation that holds businesses more accountable for responsible sourcing. The majority (83 per cent) also think online retailers should clearly mark whether or not products are ethically sourced where they can.
More than three-quarters (78 per cent) admit that knowing where a product has originated from or where parts are sourced is important to their buying decision. For 48 per cent, this information always or often impacts their buying decision.
“Transparency is paramount in building an ethical supply chain, and this can only be achieved through the utilisation of trustworthy information,” commented George Harb, Regional Vice President, Business Ecosystems, APAC at OpenText. “Having full visibility across the supply chain empowers organisations to do more to meet customers’ expectations when it comes to ethical sourcing and practices, and enables them to hold partners and suppliers accountable. By embracing a single, unified, cloud-based integration platform, organisations will not only optimise the flow of information across the supply chain, but have the transparency to ensure it operates ethically at every stage.”
