Firms are facing increasing scrutiny regarding their stances on social issues such as human and animal welfare, fair trade, and health, GlobalData has said, with brands that do not proactively address these concerns facing consequences, including loss of sales or boycotts from an activist consumer base.
For instance, the ongoing Israel-Palestine conflict has resulted in backlash against certain brands in Muslim-majority nations in Southeast Asia and West Asia, it noted. Research by GlobalData indicates that Unilever experienced a 15% decrease in sales in Indonesia during the fourth quarter, for example.
That conflict has displaced over 1.9 million Palestinian civilians, according to UNRWA, the United Nations agency for Palestinian refugees, and has become a key decision-maker for a growing cohort of consumers.
‘Ethical and social issues’
“Consumers are increasingly making decisions based on responsibility towards ethical and social issues, driving the need for companies and brands to continually set measures to create and develop genuinely responsible products and services,” says Meenakshi Haran, lead consumer analyst at GlobalData.
“As many as 31% of Middle East & African consumers and 29% of Asian consumers admitted that they find it essential for products to be ethical or support social causes.”
‘A clear message’
Consumers are sending “a clear message” to manufacturers and producers about “what they are looking for and what their priorities look like,” adds Isha Varma, Middle East business development manager at GlobalData.
“The Middle East with its high spending ability and Asia with its surging population offer formidable growth potential for food & beverage companies. As such, brands operating in this market need to send a clear and transparent message about their commitment to ethical and social responsibility to mitigate any loss of reputation and revenues.
Varma concludes: “Amid the evolving geopolitical landscape, brands are faced with tough market conditions, especially around nuanced social and economic issues, which threaten their ability to do business if left unaddressed.”
Read more: More than half of younger consumers ‘regularly choose sustainable packaging’
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