While everyone loves a good bargain, research shows that consumers are becoming increasingly concerned about where it is their money is going.
A study conducted by McCrindle for Fairtrade Australia and New Zealand in 2014 found seven in 10 Australians believe ethical products are good value for money, while eight in 10 consumers would be more likely to purchase a product that supports someone in need over one that didn’t feature a charitable aspect, if the price and quality between the two products were similar.
While for the average consumer the question of ethics is most commonly associated with everyday products such as fairtrade coffee or chocolate, or whether their eggs are free range, for example, Australian startup Ethical Switch is taking the concept and applying it on a bigger scale. It is looking to help consumers learn more about the companies they are giving thousands of dollars to each year, from power companies to their super funds.
As Sam Marshall, the startup’s head of business partnerships, explained, Ethical Switch ranks companies depending on how ethical they are, with their ethical status largely dependent on their commitment to renewable energy and divestment from fossil fuels. Currently allowing users to learn about the energy and superannuation sectors, the startup is working on banking and solar.
The platform was founded by Tamlyn Rudolph in 2014. Having worked in the energy industry for over 12 years, Rudolph saw firsthand the damage big energy can do and, conversely, the positive effect that renewable energy can provide.
Her time in the industry meant that she was also constantly being asked who the most ethical energy provider was, and given the money we spend on household energy consumption, this is important: Australians spend around $40 billion annually on household bills, and that household energy consumption makes up around 50 percent of a household footprint. People are increasingly thinking about the ethical standing of the businesses they give their money to, but don’t always have the time or resources to research companies themselves.
Rudolph launched the business with the aim of empowering people to be able to make decisions about which companies to support, going through an incubator program at the School of Social Entrepreneurs to help shape its business model.
The site works by having users select the sector they want information on. If they select the energy category they can use the interactive comparison table to see how their current company compares, or if they are checking various super funds they will get information on the three listed funds.
“What we wanted to provide to people is an information tool. If that information leads people to want to make a switch, then a switching process is available to them,” Marshall said.
The switching process has been developed in conjunction with the providers – Powershop and Diamond Energy in the energy sector and Good Super, Australian Ethical, and Future Super in the superannuation category – to ensure that it takes less than five minutes, a figure that Marshall said the company will look to ensure remains uniform as new sectors are introduced.
Despite the ease of switching, Marshall said Ethical Switch is first and foremost an informational platform, eventually aiming to act as simply a directory of ethical businesses and approaching this by collating information that is publicly available and verifiable.
“We are the only research company in Australia that calculates and publishes the scope 1 emissions produced by each electricity retailer through their ownership of power stations. We have an interactive comparison table for energy providers where people can compare their current provider with companies that are 100 percent renewable and see how they rank against a bunch of different criteria,” Marshall said.
“This means customers can bypass greenwashing and examine what their energy retailer is actually doing. We also include information about available products, customer feedback, contractual considerations and renewable energy investment…being a company that’s promoting an information platform that’s based on ethics, having accurate, verifiable sources of information is absolutely core to the business. The fact that we’ve done the research, sourced and referenced the information, has meant people trust the tool as an accurate representation of the industry.”
Similarly, the super funds listed on the platform apply an ethical screen to their investments and list ethics as a core aspect of their businesses.
“Companies that are thinking along ethical lines, and implement those practices generally want to be involved. We’ve never been about shaming companies that are not doing the right thing; if the biggest polluters in energy in Australia all of a sudden turned around and went to 100 percent renewable, we’d have no problems in increasing their ranking,” Marshall explained.
Also central to the startup’s mission is its work with not for profits, with 80 percent of its profits given to charities including Solar Citizens, the Australian Cervical Cancer Foundation, and Habitat for Humanity Australia.
“We have created a unique ecosystem in which we collect contributions from ethical providers for each person that switches to them via our platform. We then pass over 50 percent of this on to our charity partners and keep the rest to run our business. This equates to over 80 percent of our profits in total,” Marshall said.
“In turn, our charity partners help get the word out about our services. Many of their donors and beneficiaries are interested in making decisions that are better for people and planet which aligns with what we’re doing. All of this creates a win-win-win for ethical companies, charities, and consumers.”
The development and launch of Ethical Switch has been self funded, though aided through the time and expertise donated by people who have believed in the vision; the first iteration of the platform was developed through Random Hacks of Kindness, and it is currently receiving assistance from social enterprise accelerator One10.
“When you believe in something strongly enough, money becomes secondary to the need to walk the talk. Tamlyn was – and remains very much the same – part of a new generation of conscious consumers and she has a strong belief that the choices that we make as consumers are very powerful and where we channel our money can have a huge impact,” Marshall said.
Over the coming months Ethical Switch will be looking to upgrade its platform to create a better user experience, and introduce new sectors.
Image: Tamlyn Rudolph at Random Hacks of Kindess. Source: Random Hacks of Kindness.