There has been a recent boom in ‘Ethical’ products following on from the success of ‘Fair Trade’ and ‘Organic’ but is this all marketing hype designed to boost a company’s profits?
There is no doubt that the use of any of these labels opens up a totally justified debate on whether they are sufficiently defined to give the general public the assurances they need.
Ethical and green issues are increasingly important. Fair Trade has now established itself as a recognised standard. What transparency does the consumer have on whether the prices they pay have any bearing on the fairness claims that are made? Is it that the premium people are prepared to pay for such products, on prices set by the seller, has more to do with what the market will bear than on making any real difference to the third world producer?
The selling of ethical insurance and financial products falls into the same category. A simple claim that a percentage of profits are channelled into good causes is all well and good but the discerning customer should look beyond these headline-grabbing claims and ask serious questions.
Is the broker or insurer simply donating money to a good cause?
Have they made any changes to the way they:
operate on business travel
purchasing of goods and services
use of energy, and employment?
Do they even understand what a carbon footprint is?
There are hundreds of companies, many well known, that jump onto the bandwagon simply to try and grab a share of this growing market. This is tantamount to using strong- arm tactics to drown out the voices of those genuine companies and charities that are offering ethical insurance with a difference.
Only by looking at the whole picture can you appreciate what makes these new up and coming ethically driven companies a much more attractive option for those who do care about where they put their money. Existing companies can be ethical too. Whether it is directed at helping those in need, say in the developing world or aimed at ecological issues, such as climate change.
It is easy to turn a good idea into nonsense. The whole topic of Corporate Social Responsibility became a joke, when customers realised that all the great ho-ha from companies tended to mean a one-person department giving money to a few well-publicised local charities. The money spent bought press miles that would have cost ten times as much to buy with advertising.
In insurance, ethics and conscience have yet to be taken seriously.
Some companies are better than others, and there are health insurers who build ethical and social responsibility into everything they do. There are others that make the right noises, but can you really believe a company really understands the topic, if while the marketing team are making play of ethical commitment; the human resources team are sacking workers locally and outsourcing jobs overseas?
Companies, who realise that ethical and environmental issues are central to how their business operates, and are truly making a difference, will do well. Those that think the public are too stupid to know when it is little more than a window dressing sham, will not.
