5 Types Of Ethical Business Models
A growing number of companies are embracing ethical practices. This involves making money while looking after the environment and society in the process. Ethical companies are becoming more popular among customers. Today’s customers are much more socially aware and they want to make sure that their purchases cause minimal harm to the world. By adopting an ethical business model, you can appeal to this market while also feeling good about the work you’re doing. Just what are examples of ethical business models? Below are five examples.
You could consider going the extra mile to reduce your company’s environmental impact. This could include reducing non-recyclable waste, using organic/recycled supplies, switching to sustainable power sources and reducing carbon emissions. Reaching a certain level of eco-friendliness could allow you to apply for certificates such as Energy Star, Rainforest Alliance, Green Seal or USDA Organic. Such certificates can win over the trust of eco-conscious consumers. This is a great ethical business model for those that care deeply about fighting climate change.
Fair trade involves ensuring that all workers along the supply chain are fairly treated and fairly compensated. This includes providing fair wages, providing safe working conditions, avoiding child labor and avoiding worker discrimination. The Fairtrade Foundation provides certificates to companies that meet these standards – many customers look out for the Fairtrade logo when buying products like coffee and chocolate. This could be a great cause to take up if you care about worker rights – be prepared to vet all suppliers thoroughly so that you can meet necessary standards.
Conflict resources are resources that are extracted from a warzone and sold to help fund continued fighting. The most famous example is ‘blood diamonds’ – diamonds that are mined and sold in exchange to buy weapons and fund invasions. Many customers do not want their purchases to go towards funding wars. Setting yourself up as a conflict-free company like ethical jeweler Brilliant Earth could be another great ethical cause to pursue. This involves tracing the origins of materials you use to ensure that they do not come from warzones.
Animal cruelty-free businesses are invested in avoiding practices that cause direct harm to animals. This could include not using animal testing on products, or it could involve going one step further and not using any animal products. A growing number of people are turning veganism and there is an expanding market for vegan products including foods, cosmetics and clothing. Organizations such as PETA are known for providing certification to companies that meet certain standards. If you are vegan yourself or care about animal welfare, this could be a worthy cause to base your business around.
Charitable for-profit businesses are companies that strive to make a profit, but also donate heavily to causes. This could include anything from environmental causes like planting trees to social causes such as helping the homeless or funding medical research. Running such a business can allow you to earn money and give back at the same time. Your customers can also feel as if they’re contributing to causes with each purchase. You can set up your own charity or partner up with existing charities. Just make sure that your business abides by charity legislation.