Are wealthy consumers ethically inclined?

The World Luxury Ethical Council (WLEC) a non-profit organisation supporting luxury ethical brands, supports the surrey conducted in October by the Luxury Institute of New York. Found 57 percent of high-income adults surveyed (with an average household net worth of £1.6 million and average income of £154,000) would give greater consideration to purchasing a specific brand that they recognise to be ethical in their business practises. Nearly two-thirds (64 percent) of the wealthy rely on magazine, newspaper and web articles to learn about a luxury ethical brand efforts; 48 percent learn of initiatives through conversations with family and friends.

The 'Luxury Ethical Brand' represents the wealthy consumers who are prepared to pay a "significant price premium" for luxury goods and services under a brand name, which is recognised for ethical business practises. This represents internal (employee respect and pay), and external (product sourcing) initiatives according in a recently commissioned survey of high-income consumers.

Rumah, a luxury ethical homeware brand is experiencing a sales uplift supporting their ethical business practises selling at a significant price premium for high quality handcrafted 100% cashmere blankets and throws made in Nepal. Founder Andreas Lim of Rumah stated, "I am very pleased to see Rumah's business ethical platform has proven to be successful in terms of the aspirations which we try to achieve as a luxury ethical homeware brand with our trading practices. Rumah is not just about the talk but doing the walk. It is not always easy and shortcuts are tempting, but we believe in what we're doing here at Rumah and the effort is worth the prize to help set the industry standard."

Ten percent of those surveyed say they would pay a "significant price premium" for luxury ethical brands and this tendency grows greater with wealth and income. Wealthy consumers between 21 and 44 years of age also have a strong desire for being willing to pay significant premiums for luxury ethical brands, with 14 percent of the younger wealthy indicating that they would do so. High ethical standards can also bring higher selling prices for luxury ethical brands. More than half the wealthy consumers (56 percent) say they would pay a premium prices for luxury ethical brands, which represent the ethical business practises they trade on. Women once again are willing to pay for outstanding ethical business practises and higher income earners of £250,000+.

The first popular criterion to determine a luxury brand has ethical business practises is its commitment to local development in the markets they work and produce. More than half (55 percent) of the wealthy consumers surveyed overall and 61 percent those worth at least £3 million demanded this of a luxury ethical brand. Local development is an especially important contributor to a luxury ethical brand reputation for wealthy individuals younger than 45. While 65 percent of wealthy individuals say, they would seek out and purchase luxury ethical brands that excel in business ethics, values, policies, and practices. Seventy-eight percent stated they would not buy a luxury brand they perceive not to have a passing ethical grade. Women tend to avoid ethically challenged luxury brands representing 83 percent, which would not purchase them.

Environmental concerns are the second most popular way for a luxury ethical brand to present its responsible credentials to wealthy consumers. Nearly two-thirds (64 percent) of those survey say that luxury ethical brands demonstrate their environmental concern, a strong belief especially prevalent among wealthy consumers 44 and younger. Eighty-one percent of the wealthy consumers overall cited a commitment to reduce the carbon-footprint produced per unit is the most popular way in which a luxury ethical brand can represent its environmental image. The penalty for failure to uphold high environmental standards is also high - 75 percent of the wealthy consumers would not buy a luxury brand that did not show concern for the environment.

The third most popular criterion is philanthropic activities, which a luxury ethical brand supports and encourages of which 60 percent of wealthy consumers say they seek out such brands. Among the wealthy 79 percent want to see a luxury ethical brand commitment to community development, and 75 percent believe that a philanthropic brand should donate a percentage of profits to charity (especially popular among women, younger respondents and those earning more than £250,000). Women and high-income earners are the two groups most likely to pay a premium for a luxury ethical brand with a respectable philanthropic history. However, philanthropic work does not necessarily always translate into a price premium. In fact, a majority (55 percent) of wealthy consumers say that even though they may admire a luxury ethical brand's philanthropic record of accomplishment, the goods and services must still be price competitively and not a hiked-up margin added to the retail price to cover philanthropic activities.