A new research commissioned by OpenText™ reveals that consumer pressure on organizations to be held more accountable for how goods are produced and sourced has intensified during the global pandemic. This trend is expected to continue as retail markets recover, highlighting the critical importance of proactively ensuring your entire supply chain operates ethically.
The growing importance of ethical sourcing
Overall, the results indicate that organizations need to act now on consumers’ rising expectations for ethical behavior, sustainability and transparency. In fact, 88% of global consumers responding to the survey indicated that they plan to prioritize buying from companies with ethical sourcing strategies in place, compared with 78% before the COVID-19 pandemic broke – and just 58% in Japan, 71% in both Canada and the UK and 72% in the US.
There are clear brand implications for meeting (or failing to meet) the growing demands for ethical sourcing. A growing number of consumers in each of these markets indicated they are set to pledge their brand loyalty to companies with a clear commitment to responsible sourcing – 78% in Japan, 82% in the US and UK, and 86% in Canada.
The implications go far beyond brand loyalty. According to the research, 83% of global consumers are willing to spend more on a product if they can be sure it is ethically sourced. How much more? While the number of respondents who said they would gladly pay about 10% more for a product ranged from 15% in the US to 25% in Germany, some would accept even higher price-tags: 35% of respondents in India and 21% of respondents in the US said they would pay around 50% more—that is, $15 for a product that would otherwise cost $10.
This is a critical insight for organizations that tend to view sustainability initiatives across the supply chain as a way of reducing costs, instead of protecting and generating sales. According to Chris Cunnane, research director, supply chain management, at ARC Advisory Group, “Engaging in sustainability initiatives prevents companies from having to react to a rising tide of sentiment which can crop up overnight. Getting ahead of these kinds of campaigns can be at the heart of a robust risk management program that protects future sales.”