In the red corner…
Milton Friedman, the economist, stated, ‘The business of business is business’ – the sole legitimate purpose of business is to create and increase shareholder value (= more profit!).

And in the green corner…
On the other hand, there is the view of the proponents of ethical business and Corporate Social Responsibility (CSR). They have been described as, ‘a rapidly growing, rather fuzzy movement, encompassing companies… and sceptical advocacy groups arguing that they must go further in mitigating their social impact’ (McKinsey Quarterly).

So what is it to be an ethical business?
There are lots of different definitions of what it is to be an ethical business; I would include businesses that:

• Sell ethical products or services, eg Soil Association or Fairtrade products.
• Run themselves ethically, eg cooperatives.
• Are owned and managed ethically, eg cooperatives.
• Only buy from suppliers in an ethical manner, eg whole food co-operatives, Fairtrade products.
• Act responsibly, eg social enterprises.

To call yourself ethical means that you probably adhere to at least one of the above criteria.

The benefits of running an ethical business
At its broadest, running an ethical business creates a lot of clear benefits for your business; you will have much of the following:
• A more motivated, happier staff – they feel that they belong to something worthwhile and most people prefer to belong to a caring business.
• A more committed group of customers – happier to be buying friendlier products and services and dealing with a caring organisation – you create a better emotional bond.
• An improved brand image with ‘stand-out’ benefits - you can create a new, friendlier, brand personality.
• Improved sales – most people prefer to buy ethical (if they can).
• Better overheads – saving energy means lower bills.

And what of ethical consumers?
At its simplest, ethical consumers are not the same as ordinary consumers – often well-educated and young-minded they are even more discerning (the ‘Waitrose Greenie’?). They may pay for better quality but the product must be as good as, or better quality than the standard. Most of these people will only tolerate minimal inconvenience (they are not all politically motivated eco-warriors!), will be cynical of the big companies, and will only buy products for the product’s attributes rather than because it is ethical. They are not all Guardian-reading vegetarians in green wellies.

Pricing and product opportunities
The pricing of ethical products is open for abuse – certain coffee shops have been taken to court for charging disproportionately high prices for so-called organic or Fairtrade products (ie they claimed to be ‘passing on premium costs’ – but what they did was charge extortionate mark-ups for ‘organic’ raw materials while claiming/inferring the increase in price was sent direct to the supplier).