As Australians, we consider ourselves a society of fairness and respect. Similarly, when it comes to business, we take a broad view of what is ethical – it’s more than just how we do business and treat our customers, it’s about respecting individuals and their privacy, and communicating and negotiating directly and honestly.
Recent events – like the Banking Royal Commission – have reignited the conversation about ethical business practices in Australia. While much of the conversation has focused on how tightening economic conditions can lead to compromised behaviours (like “cooking the books” and bribery), it has also encouraged many consumers to better understand their rights.
So… what is ethical behaviour and how important is it?
Beyond being the “right thing to do”, ethical behaviour is increasingly becoming one of the main influences on purchasing decisions. In fact, for many products (like food and clothing), consumers will pay a premium for ethically produced / sourced goods.
As a business owner, some of the behaviours expected of you are fairly obvious – like complying with the Competition and Consumer Act 2010, protecting your intellectual property, and managing privacy and data security – but there are a number of other factors you need to consider.
Please note: This is not an exhaustive list and you should do your own research to make sure you’re meeting all of the legal requirements for your business (based on the industry and state / territory you operate in).
Managing your environmental impact
The Australian community has never been more aware of, or concerned about, managing the impact we have on our environment.
Recognising this, there are a number of environmental protection laws – jointly administered by federal, state, and local governments – you will need to comply with. The impact of this legislation on your operations will depend on the type of business you run.
In addition to legislation, many consumers will be interested in your broader approach to managing your environmental impact. This may include how you:
- Reduce your carbon footprint
- Minimise your waste and managing its disposal, and
- Proactive promote / contribute to green causes and campaigns.
Your employment practices and conditions
While the Fair Work Act 2009 sets out employment practices for most Australian employees, there are a range of other federal and state / territory legislative schemes you may need to comply with. Broadly speaking, these laws govern areas like pay and conditions, health and safety, and anti-discrimination.
Beyond these basic entitlements, consumers are increasingly interested in your commitment to diversity and inclusion. As part of this, they may want to know your approach to:
- Gender equality
- LGBTQIA+ inclusion
- Diversity of race, religion, age, etc.
- Creating opportunities for people with disabilities
While these issues may be seen as divisive, consumers now want to know what a business stands for. This is why many organisations – like those who issued statements of support during the Marriage Equality plebiscite – are choosing to bear the potential backlash from more traditional consumers and publicly advocate for diversity and inclusion.
The full impact of your supply chain
Thanks to advances in technology, production and sourcing of goods and services is becoming increasingly global. Many businesses have capitalised on this by shifting operations overseas, to markets where material and labour costs are lower. These lower production costs often come at the expense of the safety of workers and the impact on the environment.
Although it has taken a while for them to catch up, many consumers – and governments – are starting to understand this. As a result, they are taking a more holistic view of the “cost” of their goods and services and choosing products that are responsibly sourced.
Legislation governing supply chains is still relatively limited and mostly focuses on things like visibility of reporting and eradicating modern slavery. However, consumers are increasingly interested in the:
- Full environmental impact of production – from extraction / creation of raw materials, to the final product, and packaging.
- Pay and conditions of all workers – including minimum wages / fair trade conditions, minimum working ages, and health and safety provisions.
- Political affiliations of the producer – an increasing number of consumers are choosing to avoid products and companies that are linked to political parties and standpoints that do not align with their personal views (e.g. the recent boycotting of Huawei products, Royal Brunei Airlines, and SodaStream).
How you meet your tax obligations
For years, many multinational organisations have capitalised on their global footprint by basing their operations where the tax conditions are most favourable. While technically not illegal in most places, this practice has come under fire recently, with many believing that profits should be taxed in the jurisdiction they are earned.
While many governments are considering the best way to legislate against this – particularly for online-only businesses – consumers have begun exerting their influence by boycotting organisations that are failing to meet their Australian tax obligations.