Summary Report: Forum on Socially Conscious Consumerism

Forum Overview

Fifty-five managers, academics and policy-makers shared the insight of six expert speakers at NBS' Knowledge Forum on Socially Conscious Consumerism. The forum’s purpose was to bring the communities of research and practice and together to engage in a conversation on socially conscious consumerism. The following themes emerged from the provocative discussions.

• Consumers need to purchase more ingeniously.
• It appears that consumers are willing to pay a small premium for socially conscious products and services, and some firms are better positioned than others to harvest the value in sustainability.
• Many participants called for a new marketing paradigm.

The purpose of this event was to bring together experts from academia, industry, government and nongovernmental organizations to discuss an important issue in business sustainability. Each of these groups thinks about socially conscious consumerism differently. This Forum allowed them to share their knowledge and advance their thinking.

Summary of Dialogue Sessions

Dialogue sessions at the forum provided participants with the opportunity to share ideas and to debate issues. This is a summary of the dialogue among conference delegates in small break-out sessions and open group discussions.

Worst Practices in Business

Misrepresentation is one of the worst business practices with respect to socially conscious consumerism. It includes misleading advertising (such as showing a large SUV next to images of nature and "green" slogans), and unsupported or over-extended claims (claiming a product is ecologically-friendly when it contains only slightly fewer chemical additives than competing products).

Concerned consumers may investigate the legitimacy of these claims while others will become discouraged and skeptical, slowing the momentum for socially conscious consumerism and putting at risk the firm’s reputation.

Challenges and Opportunities for Companies

• Companies and industries are making incremental improvements in terms of socially responsible practice, but they are no longer sufficient. Large leaps are required to address the climate crisis that we face.
• Labeling and identifying socially responsible offerings is a challenge for firms. Many consumers want more socially responsible options, but lack the time, ability or motivation to become informed. Companies that create solutions to this unmet consumer need stand to reap the benefits.
• How consumers will respond to company-initiated changes is never certain. Is it better to "green" an existing product, or to create a new "green" brand? Which will be more beneficial for the company and the consumer?

Research has shown that the market rewards sustainability initiatives in companies with high quality products. As such, products often sell at a premium; some consumers have fewer "responsible" options.

Challenges and Opportunities for Government

How should government be involved in corporate social responsibility? Consumers will adjust quickly to new policies that regulate behaviour, such as by-laws that ban plastic bags or synthetic pesticides. Government can play a role in social marketing campaigns to educate consumers.

Governments can offer incentives to companies and industries who adopt and improve socially responsible practices. Some would argue that corporate investment in sustainability must be incentivized by government to encourage it.

Others would argue that government regulation is not the answer; industry leaders should take the initiative to form associations and standards, with voluntary compliance. The role of government is uncertain and further interaction and dialogue between industry groups, companies, and consumer groups is needed.

Challenges and Opportunities for Consumers

If consumers were aware of their carbon footprint, would they make better decisions? Would behaviour change? Consumers have unrealized power to influence their consumption choices. As consumers, we need to consider the long-term value of a purchase, where many costs to society are not reflected in the product’s price.

• Consumers have difficulty identifying socially responsible options. Differentiating between good and bad alternatives for a product requires an unaccustomed degree of engagement by consumers. It also requires better indicators and metrics to identify options and make choices.
• Individuals need to be more accountable for their consumption decisions. But educating oneself about green or sustainable alternatives is not straightforward. Labelling socially responsible or green products is often confusing. An overwhelming number of different "eco-friendly" or "ethically produced" labels could be perceived as nothing but "alphabet soup".

With increasing awareness of global social concerns, consumers have an opportunity to embrace a new philosophy of consumption. This change in mind-set and lifestyle involves a focus on sustainable choices and socially conscious behaviour, with the hope of improving physical, mental and financial well-being.

The Bigger Challenges

Agreeing on definitions, standards, and best practices is a primary challenge to socially conscious consumption. How do we define "socially responsible" in terms of business practice and consumer behaviour? Is it ethical to advertise some products as "socially responsible" when they are only marginally better than the existing options?

• Environmental groups often call for less consumption. But what if consumption was good for the environment, as William McDonough and Michael Braungart have been advocating for years?
• Children are an important partner in creating change. Cigarette smoking decreased drastically over 20 years due to policy changes and evolving social ideals, with children functioning as an important leverage point. Educating children about the importance of making socially conscious choices may be the best way to instil change.
• Non-governmental organizations (NGOs) play an important role in shaping policy, business practice and consumer behaviour. Some have forged great relationships with manufacturers and have created networks of informed consumers.
• Academics also play a principal role in encouraging socially conscious consumerism. As educators, academics exert a powerful influence on student learning. They can help fill the need for sound and rigorous research by investigating consumer approaches to socially responsible behaviour, optimal strategies for firms and the potential impact of policy changes.

Need for more Research

• Researchers have a responsibility to ensure their work is rigorous and reliable. Moreover, it is essential that researchers critically review the research on a continuous basis to identify the most reliable knowledge to inform sound business decisions.
• Challenges exist around what to measure. As the adage "what gets measured gets managed" states, determining what needs to be measured and how it can be assessed are fundamentally important questions. The concept of measuring your carbon footprint — an individual’s behaviour or of a particular product - seems logical. Does this mean that the next frontier of socially responsible practice will involve carbon accountants and carbon auditors? Is this idea a potential solution, problem or both?

Countless surveys have shown that consumers claim to take social and environmental attributes into account when making purchase decisions. But it is not clear if and when they are willing to act on such decisions. Below are the speakers' presentation slides and interviews from the forum.

Key Takeaways from the Forum Sessions

Dr. June Cotte, Associate Professor & Dr. Remi Trudel, Richard Ivey School of Business		A Systematic Review of the Research on Socially Conscious Consumerism
		Key Take-aways Their own research shows that consumers are not willing to pay much more for goods made ethically, and consumers pay a lot less for those goods that are not ethical. Read the Systematic Review Read page six of the full report Download the presentation slides

Dr. Ron Dembo, Founder and CEO, ZeroFootprint		Socially Conscious Consumerism: A Tautology?
		Key Take-aways Socially conscious consuming is about consuming less, more ingeniously. Make the invisible visible—the energy we use, the carbon we emit needs to be made visible to create changes in behaviour. The seriousness of global warming has not yet been realized. Canada is behind. Read page eight of the full report Download the presentation slides

Dr. C.B. Bhattacharya, Boston University School of Management		Good (is not) Enough: Stakeholder Reactions to Corporate Responsibility
		Key Take-aways Consumers who are aware of a firm’s sustainability initiatives have higher intentions to purchase from them. When people believe sustainability initiatives are genuine, they are more likely to purchase from, work for, and invest in the company. The financial return on sustainability is greater in firms with high product quality or innovation than in firms without. Read page 10 of the full report Download the presentation slides

Dr. Peggy Cunningham, Dalhousie University’s Faculty of Management		Can we shop and market our way to sustainability? Challenges to the Existing Marketing Paradigm
		Key Take-aways The dominant paradigm of marketing is to create dissatisfaction among consumers, so that they can buy more and keep the economy growing. Consumers are just half of the equation. We need also to address the elephant in the room that is pushing for unsustainable consumption: unsustainable marketing. We need to question our discipline; we need to rethink how we teach marketing. Read page 12 of the full report Download the presentation slides

Mark Hindman, Vice-President of Marketing and Olympic Programs, RONA Inc.		RONA’s Green Strategy: A Holistic Life-Cycle Approach
		Key Take-aways Collaborate with stakeholders at every stage of the supply chain when developing green products. A holistic “life-cycle approach” considers each phase of production and disposal. Third party verification adds credibility to green products and helps avoid the danger of “green washing". Read page 14 of the full report Download the presentation slides