Interesting article — Does Being Ethical Pay? — in yesterday’s Wall Street Journal on corporate reputation, based on some simple but decent controlled research. It concludes:
“Companies should segment their market and make a particular effort to reach out to buyers with high ethical standards, because those are the customers who can deliver the biggest potential profits on ethically produced goods.”
The article also points out what our global CSR lead, Chris Deri, would call an “Irresponsibility Discount.” His view is that the research seems to identify a material discount and negative correlation between irresponsible company conduct and consumer consideration and purchase behaviour. He would also point out that the research, however, doesn’t actually uncover a significant halo effect for products considered ‘ethically sound.’ This seems to imply that responsible conduct has merely become one of the basic expectations for products, like quality, price and consistency.