What does it mean to be an ‘ethical’ company? Five-time honoree illy caffè shares some tips

16-Mar-2017 - Last updated on 16-Mar-2017 at 15:08 GMT

From the sheer number of third-party watchdog organizations out there that observe and rate the impact corporations make to their surroundings, one can tell the importance consumers today put on making sure they purchase products from ethical companies.

One such organization, New York City-based The Ethisphere Institute, ranks on best practices in business ethics, corporate social responsibility, anti-corruption, and environmental sustainability. For the fifth year in a row, it has included Italian coffee company illy caffè S.p.A. in its list of the World’s Most Ethical Company.

"Over the last eleven years we have seen the shift in societal expectations, constant redefinition of laws and regulations and the geo-political climate,” said Ethisphere CEO Timothy Erblich.

“We have also seen how companies honored as the World's Most Ethical respond to these challenges. They invest in their local communities around the world, embrace strategies of diversity and inclusion, and focus on long term-ism as a sustainable business advantage.”

What does it take to rank in Ethisphere’s list?

The other food, beverage, and agriculture companies to make the list are Mexico’s Grupo Bimbo, and three American companies: Kellogg Company, PepsiCo, and Ingredion Incorporated (the only ingredients company on the list).

So what makes an Ethisphere ‘World’s Most Ethical’ company? “Our strongest and highest quotient scores are in two areas: Citizenship, Sustainability, and Corporate Responsibility; and Leadership, Innovation, and Reputation,” Adam Paige, director of public relations of illy caffè North America, told FoodNavigator-USA (you can read how Ethisphere’s Ethical Quotient is scored HERE).

The company has multiple programs and initiatives that concern its impact on its surrounding, from its financial award to Brazilian coffee-growing communities to stimulate development (The Ernesto Illy Quality Award for Espresso), to its worldwide training programs for farmers and professionals (University of Coffee).

“One cornerstone program is the DNV GL Responsible Supply Chain Process certification—one of the world’s foremost, independent industrial process arbiters,” Paige said. “The certification is rigorous and attests to the sustainable practices of illy’s supply chain (across 60 KPIs), and in particular, to the quality of illy’s relationships with its suppliers.”

Transparency, and doing more than just ‘doing good’

A report from Mintel published in 2015 revealed that 56% of US consumers stop buying from companies they believe are unethical. Additionally, over 35% of consumers stop buying from brands they perceive as unethical even if there is no substitute available.

But consumers today are also suspicious of brands that simply stick-on a charity and donate a portion of sales or product. As branding expert Lisa Hyman of the goodDog Agency put it, “brands really need to pay attention to the fact that consumers are actually looking for and staying more loyal to brands that are motivated by positive intentions.”

Hence, illy caffè taking full charge of its supply chain and community enrichment programs has brewed the type of consumer perception and image it wants.

“The heart of this commitment is a belief that also serves as operating philosophy: That the continuous pursuit of quality sets into motion a virtuous cycle that creates value for all parties involved, from coffee farmer to the consumer’s cup,” Paige said.

The accolade makes for a good on-pack seal, Paige added, and the company also promotes within sales and customer facing material which includes digital and social media. “We are very proud of the achievement and our entire employee base is communicative about the accolade throughout the year.”