The return of ethical consumers - Scot Case

UL and the UL logo are trademarks of UL LLC © 2014

February 6, 2014

The Rise of Ethical Consumers

Scot CaseUL [email protected]@scotcase

International Symposium on Ethical PurchasingSapporo, Japan

Overview

Define Ethical Consumerism

Identify Ethical Concerns

Discuss Information Sharing

Describe Transition from Voluntary to Legal Requirements

Defining Ethical Consumerism

Ethical consumerism is the intentional practice of buying goods and services that generate human health, environmental, and social benefit and that are produced in ways that minimize human health, environmental, and social damage.

Defining Ethical Consumerism

Buying better products and services from better companies.

Will it last?

How much is it?

Does it work?

Traditional Concerns

Price, Performance, and Quality

Do I like & trust the people who make it?Do I need this

product?

Is the purchase consistent with my values?

What do others think about it?

The Ethical Consumer

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World

Country

Prefecture

Village

Neighborhood

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Operating Theory

1. Every purchase has hidden human health, environmental, and social implications throughout every supply chain.

Ethical Consumer Concerns Vary

Operating Theory

1. Every purchase has hidden human health, environmental, and social implications throughout every supply chain.

2. And those hidden impacts are increasingly visible to customers.

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Nothing is Secret

Nothing is Secret – The Triple ThreatMiniature Cameras:

Social Media:

Smart Phones:

Two Cups of Coffee a Day•34 gallons of coffee a year.•18 pounds of coffee beans•12 pounds of fertilizer•A few ounces of highly toxic pesticides•43 pounds of coffee pulp•Clear cutting of forests to grow even more coffee•Bird species disappearing•More erosion•More pesticides

Ethical Consumer Issues

Human Health

Environmental

Social

Carcinogens, Mutagens, Reproductive Toxins

Endocrine disruptors

Global warming Air and water pollution Resource depletion Habitat destruction

Worker safety Worker rights Women’s rights Child labor

Forced labor Fair Wage

Energy & Water efficiency Recycled content Zero waste Renewable resources

Volatile Organic Compounds Hazardous ingredients

World

Country

Prefecture

Village

Neighborhood

???

??? ???

???


Information

Consum

er’s Ethical Purchasing Be

havior

Consumer’s Proximity to Manufacturer

Low

High

Close Distant


World

Country

Prefecture

Village

Neighborhood


Information Information

Information

Inform

ation

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Information Sharing

There are more than 400 labels addressing some aspect of ethical purchasing.

Seven Sins of Greenwashing

Source: http://www.ethicalconsumer.org/printmagazine/currentissue.aspx ,1/24/2014

Information Sharing

Founded in 1989

Publishes buying guides, company ratings, and boycott lists.

Has extensive website and mobile apps

www.ethicalconsumer.org

“Ethical” means different things to different customers

Fair Trade Certified

No child labor

Low-Toxicity

Recycled Content

Made by “green” company with strong Corporate Social Responsibility practices.

Available Products

There are an infinite variety of possible definitions for “ethical.”

Information Sharing

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Information Sharing

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Data Platform (API)

UL Transparency Platform

UL Data

The Wercs, GoodGuide

Data

Retailer Data

Supplier Data

OtherData

B2B tools

B2C tools

Multiple Data Sources

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Information Sharing

From Questions to Requirements

Question Desire

Request Requirement

What are the impacts?

Is it possible to …. ?

Please respond to …

You are required to…

Ethical Purchasing PoliciesStates:CaliforniaConnecticutGeorgiaIllinoisIndianaIowaMassachusettsMissouriMinnesotaNew JerseyNew YorkNorth CarolinaOregonPennsylvaniaVermontWashington

Counties:Chatham County, NCKalamazoo County, WIKing County, WAKitsap County, WAMultnomah County, ORSan Mateo County, CASanta Cruz County, CASarasota County, FL

Cities:Boulder, COCincinnati, OHKansas City, MOPortland, ORPhoenix, AZSan Francisco, CASanta Monica, CASeattle, WA

Many governments, colleges and universities, and large companies are adopting ethical purchasing

policies.

SEC. 1502. CONFLICT MINERALS.(a) SENSE OF CONGRESS ON EXPLOITATION AND TRADE OF CONFLICTMINERALS ORIGINATING IN THE DEMOCRATIC REPUBLIC OF THE CONGO.—It is the sense of Congress that the exploitation and trade of conflict minerals originating in the Democratic Republic of the Congo is helping to finance conflict characterized by extreme levels of violence in the eastern Democratic Republic of the Congo, particularly sexual- and gender-based violence, and contributing to an emergency humanitarian situation therein, warranting the provisions of section 13(p) of the Securities Exchange Act of 1934, as added by subsection (b).

USA: Dodd-Frank Legislation on Conflict Minerals

…the products that do not contain minerals that directly or indirectly finance or benefit armed groups in the Democratic Republic of the Congo or an adjoining country),

30Source: http://www.proskauer.com/publications/client-alert/navigating-the-secs-recently-finalized-conflict-mineral-rules/

USA: Dodd-Frank Legislation on Conflict Minerals

Publically traded companies in the United States must disclose if their product contains any:

Tantalum Tin Tungsten Gold

All affected companies must conduct a “reasonable country of origin” inquiry.

Summary

Ethical consumerism is not new; it is just re-emerging.

Product quality, performance, and value will always be important.

Consumers want information about the human health, environmental, and social impacts of their purchases.

Consumers have access to information and expect companies to provide it.

Be prepared.

Recommendations

Know your supply chain. Optimize your supply chains for ethical

considerations.1

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Recommendations

Understand the current, emerging, and potential risks throughout your supply chain.

Share information proactively; don’t become a victim of someone else telling your story.

Validate critical human health, environmental, and social aspects of your story.

Ask questions; ask questions; ask questions.

The return of ethical consumers - Scot Case

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