As the UK officially falls into recession, Kate Ives, Senior Researcher at AccountAbility, explains how consumers in the UK are reacting:
'AccountAbility’s latest report, What Assures Consumers in an Economic Downturn: A new agenda for business in the global economic crisis, investigates what enables consumers to trust in a business’s integrity and fairness. Our aim with this research is to really understand how the recession is impacting consumers and what it all means for the sustainability agenda.
We uncover several points of interest regarding consumers. First, nearly half of consumers are still interested in boycotting a business to penalise distrusted companies, and nearly a third say they would spend a little more on a product if they thought it was made ethically. This shows that consumer activism is alive and well.
Trust in business is – not surprisingly in these recessionary times – very low, with only 6% of UK consumers saying they trust business to behave responsibly. If we compare this to the high levels of responsibility held by businesses, rated at 56%, then it is clear there is a huge “accountability gap” between expectations and trust to deliver. As Solitaire Townsend from Futerra says, “Consumer trust started out in the gutter and now we’re in the drain. We have a long way to go to build consumer confidence again.”
Consumer groups, on the other hand, come out very well in this research. Trust in them is high at 65%, and they are the only institutions to have a positive accountability gap (meaning they hold higher trust than responsibility). For all others, including government and regulators, the inverse is true.
Such high levels of trust are perhaps the result of the perceived autonomy of consumer watchdogs. When asked which channels of information people use to form a judgement about a company’s responsibility, by far the most trusted channels are independent of business: consumer watchdogs and TV programmes are used by 68% of the population, the press scores 57%, family, friends and colleagues score 55%. Compare this with product information produced by the business itself at just 23%, store salespeople at 17%, and business websites at just 16%, it is clear that independent assurance is more important than ever in the economic downturn.
What are the implications of this for business and watchdogs? The research seems to suggest a major reorientation of corporate communication and engagement strategies, and a policy of zero tolerance on overstated claims and greenwash. However, the report also shows that the economic downturn is an opportunity for those companies that can ensure their accountability is embedded in their business model. Ethical companies can increase value and trust in consumers by building sustainability into products and services.'
AccountAbility is a global network of leading business, public and civil institutions working to build and demonstrate the possibilities for tomorrow’s global markets and governance through thought leadership and advisory services. We work to promote accountability innovations for sustainable development. Please visit www.accountability21.net for more information.