The ethical market in a time of economic crisis
The Co-operative Bank's Ethical Consumerism Report is a barometer of ethical spending in the UK. We at Ethical Consumer provide the bank with research on Britons' spend on ethical food and drink, personal products and finance, as well as green homes and eco-travel. For the nine years since its inception in 1999, the report has charted steady, and sometimes spectacular, growth.
Yet those were years of prosperity, when Britain was a land of organic milk and local honey (sorry vegans). 2008, the tenth year of spending covered by the report, was the first in which Britain faced recession. We gathered the data and held our breath.... would the sceptics would be right? Are ethical choices a luxury? Are they the first brands scrubbed off the shopping list when recession bites? Or would this be the opportunity to prove that ethical choices are now a necessity to UK shoppers?
The UK's ethical spend rose from £35.5 billion to £36 billion in 2008. The growth would have been stronger still if it were not for the drop in ethical investment. The value of money invested in ethical funds fell, much in line with the rest of the stockmarket, from £8.9 billion in 2007 to £6.8 billion in 2008. With outrage widespread, perhaps Britons made their protest against 'business-as-usual' with their choice of bank. Ethical banking grew from £6.1 billion in 2007 to £7 billion in 2008. There is now more consumer money in ethical bank accounts than under ethical investment.
Ethical personal products saw the largest growth amongst consumer goods. Total sales increased by 23% from £1.45 billion to £1.76 billion. This was largely to the rising popularity of BUAV-certified 'Humane Cosmetic Standard' (HCS) toiletries. Marks and Spencer are amongst the mainstream stores now stocking HCS cosmetics and sales rose to £513 million in 2008 from £448 million in 2007. Charity shops also took far more money in 2008 (£286 million) than in 2007 (£184 million.) Another reminder that in hard times an ethical choice can also make financial sense.
But some wardrobe essentials simply refuse to turn up in charity shops. And who wants second-hand undercrackers? When buying new clothes, Britons are now seeking out ethical choices. We are better informed about the conditions facing farmers growing cotton and workers making garments. 2008 was a bumper harvest for organic and Fairtrade cotton – their sales drove spend on ethical clothing from £71 million to £172 million.
Fairtrade remains the most powerful brand in ethical consumerism. Sales in its food and drink heartland continue their growth: up from £458 million in 2007 to £635 million in 2008. Yet other certification standards may one day match Fairtrade's nationwide recognition.
For the first time, the Ethical Consumerism Report recorded sales of Rainforest Alliance goods - £369 million. The RSPCA's upstart Freedom Foods continued its rapid growth, climbing from £28 million in 2007 to £51 million in 2008. But most impressive of all is the surging popularity of sustainable fish. MSC-certified (Marine Stewardship Council) sales rose from £70 million to £128 million over 2008.
With many species sinking closer towards extinction, people are asking tough questions over the fish counter. You wouldn't buy a fish with dull, indifferent eyes; nor should you accept such a fishmonger.
For many, the most important issue of our time is climate change. For them, the key areas for ethical spending will be home and transport. Britons' outlay on 'greener homes' rose 4% in 2008 to £7 billion; and our spend on eco-travel and transport managed to creep up by 2% to £1.7 billion.
In many areas, it will be incumbent on government to make ethical decisions financially viable. It is actually remarkable that Britons stuck with their green electricity tariffs given the lack of support from the state – our spend on green energy grew from £174 million to £297 million over 2008.
Perhaps the most powerful issue in climate change however is deforestation. There was a heartening surge in our spend on sustainable paper and timber, climbing from £1 billion to £1.3 billion. Thus the ethical consumer's story of 2008 might be: 'from sustainable paper, sustainable shopping lists'.