Ethical Consumerism Report

Executive Summary
Ethical consumerism is a topic which is important to some people but have no
meaning to others. However, for a business to adopt ethical operation is crucial
because the ethical market is growing which may therefore have an impact on
success or failure, aiming to analyse what ethical consumerism means for a
business like Apple and whether the approaches they have used has been
successful or not. According to the survey carried out, it can be revealed that
consumers are aware of the ethical issues surrounding a product but will not act;
they will continue to buy the product for example an Apple IPhone. Furthermore,
it can be deducted that woman are more likely to change their buying behaviour
than men when dealing with ethical issues of a product.

Table of Contents

1.
2.

Introduction

Ethical Consumerism
3.
4.

5.

Apple Inc.
Survey

Conclusion and Recommendations

1. Introduction

6.

Appendixes

7.

References

This report is an analysis of ethical consumerism; what it is and how it has come
to life within our society. It will further include a detailed review of the buying
behaviours of customers when choosing a product, what influences them in their
decision and why it is a good strategy for a business to operate ethically. In
addition to this the report will be discussing the approaches used by Apple to
become an ethical company and how these link to their ethics and values. This
will be supported by a short opinion survey carried out by GSM students.

2. Ethical Consumerism
In January 2013 it was revealed that inside Apples factories in Shenzhen, China,
18 employees had committed suicide at the facility due to stress and depression
resulting from excessive working hours of at least 60-70 hours per week in order
to maintain current rate of output and monotonous tasks with just a basic salary
of 180 per month, prompting a worldwide concern about Apples ethical policies
that looks neat on official documents but tell a different story in real life.
Ethical Consumerism is a practice which encourages society to consider and
deliberate about how products they buy are sourced and produced in a process
which will not be harmful to the environment and society whilst boycotting goods
and services which are obtained or produced in a manner deemed to have a
negative impact on the society and the environment. As Rob Harrison said in his
book The Ethical Consumer; ethical consumers may have various different
reasons to purchase goods which they deem ethical. These can be anything from
political to religious, environmental to social and spiritual motives behind their
decision. (The Ethical Consumer; Rob Harrison 2005)
There are various different products and services that coincide with ethical
consumption. For example:

Fashion
Example: Animal skin or fur
Energy
Example: drilling for oil in protected areas like the Arctic National Wildlife
Refuge.
Health and Beauty
Example: Animal testing
According to a report published by the Cooperative Bank, 30% of
consumers now genuinely care about how companies produce its goods.
This may suggest that customers may be willing to pay a higher price for
goods that are socially and environmentally friendly. This was shown in a
study by Chris Arnold (founder of ethical marketing firm Creative
Orchestra) where he concluded that customers would pay up to 19% more
on top of the original price. (Ethical Consumer Markets Report 2013)
Consumers are increasingly concerned about where and how the products
they purchase come from; therefore, a business must take account this
buying behaviour of consumers and establish policies and practices to

widen its ethical approach to its goods and services. For an organisation to
operate ethically it needs to consider the ramifications of how they are
operating and the effect it could have on animals, the community and the
environment. Within many businesses there is a common belief that
operating ethically will increase costs causing profits to decrease.
Businesses that want to cut these costs may risk operating unethically, for
example, hiring child labour at very low wages in third world countries.
Other organisations like the Fairtrade Foundation have a different
approach believing that customers will pay more for goods that is
produced ethically as studied by Chris Arnold. This ultimately results in
higher sales which compensates the higher costs of running the business.
The failure of a business is in the hands of its customers. If there are no
customers then there is simply no business. A business operates for many
reasons but the main being to make a profit, expand globally and into
different business territories. It is therefore vital for them to create a
business with an ethical image in order to address its customers that
really care about the products they are purchasing. Showing care for the
environment, the community and its employees means customers will be
happy and satisfied which in turn means they will become a loyal
customer and ultimately contribute to the success of the business. In
addition, a company would gain a positive reputation amongst consumers
meaning that recommendations will flow from customer to customer
therefore increasing its customer base. An increase in customers means
an increase in sales and the end result being higher profits.
Proportion of Ethical Consumers
Key:
Yellow percentage: Actively considers two or more ethical issues when
buying
Red percentage: Considers some ethical issues but not habitually
Germany

30%

31%

UK

29%

28%

France

24%

26%

Spain
Figure 1. (Source:
9%
IGD, 2010,
Ethical and Sustainable Shopping)
18%

3. Apple Inc.
Apple Inc. is an American multination technology company founded on
April 1 1976 by two friends Steven Wozniak and Steven Jobs who had
been friends in high school; both had an interest in electronics and also
worked for technology firms HP and Atari. The main product line of Apple
are the iPhone, iPad, iPod and the iMac which were all introduced at
different periods in the timeline of the company. Apple as of today is the
largest publicly traded cooperation in the world by market capitalization
with a value of approximately $626 billion whilst also acquiring more
market share than Google and Microsoft combined.
Operating an ethical business is crucial for Apple. Being the most valuable
and one of the largest corporations in the world means public interest into
how Apple operates in terms of ethics is high. Learning that consumers are
now actively concerned about the origins of what they buy, means that
Apple has designed policies to address the ethical consumers around the
world. For example, the approach they have towards its suppliers
responsibility and accountability. Doing business with Apple means every
supplier must agree to the Supplier Code of Conduct that has been
created to meet and exceed the local laws and regulations. Apple has
outlined a strict set of guidelines when dealing with Apple products or
offering Apple services. They require all chains of production to provide
the basic rights of its workers- from providing safe working conditions to
treating its employees with respect and dignity, acting fairly to operating
ethically in order to address the community, the environment and animals
when dealing with waste material. The codes meet international
standards to ensure ethical working practices are followed regarding
labour, human rights, health and safety, and environmental protection.
Human Rights codes include different issues such as anti-discrimination
which ensures that suppliers, subcontractors and any person involved in
management of an Apple product or service does not discriminate against
any employee based on age, gender, ethnicity, marital status, race or
religion. Apple not only creates them but carries out audits within its
global supply chain to ensure they are correctly adhered to and find ways
to proactively tackle these issues. In 2014 633 audits covering 1.6 million
employees in 19 different countries were carried out.
Health and Safety codes like ergonomic hazards are also addressed which
help reduce cognitive, physical and psychological effects to workers such
as excessive force, lifting of goods and repetitiveness of daily tasks.
Environment codes such as Hazard Waste Management ensures that
suppliers develops procedures to recognise, manage and correctly dispose
or recycle of any hazardous substances.
Labour and Human Rights is a big factor to consumers boycotting a certain
product because it may be sourced in a way that infringes rights of a
human being. Apple is therefore very rigorous when dealing with human
rights issues. Apple explores into the most profound levels of its supply
chain and in this manner dedicated to ethical sourcing of minerals and

metals like tin, tantalum and gold, banning any of these resources which
may come from a conflict zone. Apple has identified the problem in
excessive working hours within the industry making it a top priority in
tackling the issue. Working hours at Apple are limited to 60 hours per
week and any overtime must be entirely at the workers discretion. Having
tracked over 1.1 million workers per week in 2014 and a staggering 92%
of all workers being compliant to the excessive working hours policy is an
indication that it is not an issue that is overlooked but legitimately
monitored and recorded. However as mentioned above there have been
cases in the past claiming that factory staff have committed suicide due to
stress arising from long working hours. There seems to be a contradiction
between the facts which is seen on media and the figures published by
Apple regarding the treatment of its employees. This can further be seen
as a violation if its core set of value stating that Apple is highly dedicated
to adhering to human rights laws set my local or international bodies.
Being ranked 1st among 147 by the Institute of Public and Environmental
Affairs is a major achievement by Apple and goes to indicate how vital this
issue is to the business. This is done through factory inspections which
reviews equipment used for production of Apple products and takes
samples to make sure they comply with protection of the environment in a
responsible manner. Furthermore, another approach designed by Apple is
the Clean Water Programme. Water is a big necessity in the human life
and therefore regarded as the most precious resource. Preserving it is a
definite requirement which Apple is doing its part in. Through the
programme Apple has managed to help suppliers save a billion gallons of
fresh water since 2014 by working closely with partners to identify and
create measures to save rain water and increase its direct usage and
preventing pollution in affecting the water.

4. Survey
Females: Would an ethical scandal regarding suicide by staff at Apple factories deter you from buying an Apple product?

Yes
50%

50%

No

Figure 2
According to figure 2 50% of females would be deterred from buying an
Apple product in the case of a scandal arising in the media for example
the suicide by its factory staff in China. At the same time 50% of females
would not be affected when buying an Apple product.
Males:Would an ethical scandal regarding suicide by staff at Apple factories deter you from buying an Apple product?

10%

Yes
No

90%

Figure 3
According to figure 3 90% of males would not be deterred from any suicide
scandals in Apple factories whilst a mere 10% of males would be deterred
and may change their decision to go for another brand.

From the results of the survey it can clearly be concluded that when
choosing an Apple product whilst knowing there has been scandals related
to the safety of the employees, females are more concerned and may be
more likely to change their buying behaviour. One reason for this can be
the fact that women have more sensitive feelings or be more fragile when
dealing with a case of death especially when the deaths are directly linked
to the production of an Apple product they are using themselves.
To what extent do you agree/disagree that ethics has an effect in the world of technology?

Percentage

GSM Students

Figure 4
Figure 4 shows the percentage of GSM Students responses when asked the
question to what extent do you agree or disagree that ethics has an
effect in the world of technology?
According to the survey, ethics is a big issue in the world of technology.
People are now thinking more about how the phones they are using is
sourced and where they come from but ultimately this has little effect on
consumers buying behaviour purely because people will continue to grow
and demand more technology in every aspect of their lives as long as
technology grows.
5. Conclusion and Recommendations
In conclusion, ethical consumerism is gaining its place at the heart of
consumers around the world. Consumers are now thinking more about the
origins of the products they buy resulting in a change in their buying
behaviour. This is critical for a business like Apple to understand and
increase its efforts to develop itself into an ethical company; Apple needs
to review its policies on ethics to fully establish why some of their
approaches have not been effective enough to avoid extreme
circumstances like the suicide of factory staff. Designing and
implementing policies is one thing but improving the ethical approaches is
something that should be addressed by the companys policy makers to
make the official documents turn into reality. However, reviewing its
policies there seems to be clear understanding that no matter what has
occurred in the past, Apple does take the issue of ethics seriously

investing millions of dollars every year to ensure further development and

implementation of ethical policies. Surely, Apple is not just wasting all this
capital to look neat in the public eye but has a genuine goal towards the
ethics of its products regardless of what may have happened which could
happen to any business, not just Apple.

6. Survey (Appendix 1)

Please complete this short opinion survey.

1. What is your gender?

Male

Female

2. What is your age range?

15.20

20-25

25-30

30+

3. Do you own or have you owned an Apple product?

Yes

No

4. In January 2013 it was revealed that inside Apples factories in

Shenzhen, China, 18 employees had committed suicide at the
facility due to stress and depression resulting from excessive
working hours of at least 60-70 hours per week in order to maintain
current rate of output and monotonous tasks like shaving aluminium
from the edge of the Apple logo for a period of ten consecutive
hours all being rewarded with just a basic salary of 180 per month.
Would the above news deter you from using an Apple product?
Yes

No

5. To what extent do you agree/disagree that ethics has an effect in the

world of technology?
1. Strongly agree
2. Agree
3. Dont know
4. Disagree

5. Strongly disagree
Any further comments:

7.References
Malcolm Moore. (11/01/2012). Mass suicide protest at Apple manufacturer
Foxconn factory. Available:
http://www.telegraph.co.uk/news/worldnews/asia/china/9006988/Masssuicide-protest-at-Apple-manufacturer-Foxconn-factory.html.
Ben Blanchard. (2012). Apple, Foxconn Scandal Highlights Exploitation Of
Chinese Workers By Foreign Firms. Available:
http://www.huffingtonpost.com/2012/03/07/apple-foxconnscandal_n_1325930.html.
Rob Harrison (2005). The Ethical Consumer. London: SAGE Publications.
Chris Arnold (2009). Ethical Marketing & The New Consumer. London: John
Wiley & Sons Ltd.
Office of National Statistics. (2010). Consumer Trends Quarter 2
2010.Available: http://www.ons.gov.uk/ons/rel/consumer-trends/consumertrends/q2-2010/index.html.
Co-operative Ltd. (2013). Ethical Consumer Markets Report. Available:
http://www.ethicalconsumer.org/portals/0/downloads/ethical_consumer_mark
ets_report_2013.pdf.

Yura Stakh. (2013). Apple Inc. Brief History. Available:

http://www.slideshare.net/Blimi13/apple-inc1-23315662.
Apple Inc. . (2014). Supplier Responsibility. Available:
https://www.apple.com/uk/supplier-responsibility/environment/.
Apple Inc. . (2014). Environment. Available:
https://www.apple.com/uk/supplier-responsibility/accountability/.
Apple Inc. . (2014). Labour and Human Rights. Available:
https://www.apple.com/uk/supplier-responsibility/labor-and-human-rights/.