Last year, the UK spent over £83bn on ethical goods with the continued growth driven by increased environmental concern, showing that more consumers than ever are looking for ways to shop that help people and planet.

In 2018 – a year of bad news about palm oil, plastics and the lack of progress on addressing global warming – our annual Ethical Consumer Markets Report shows that young people in particular are turning towards more sustainable options. 49% of those under 24 have avoided a product or service due to its negative environmental impact in the last year, showing a real appetite to address their own impacts.

Unsurprisingly, then, this desire has translated into positive sales figures, with the ethical market worth over £83.33bn and the average household spending £1,238 on ethical goods in 2017.

The consumer appetite for ethical goods is most clearly demonstrated in the food and clothing sectors. In the past two years alone, the number of people opting for a vegetarian diet has risen 52% and the number of vegans by 153%. And last year, the market for second-hand clothes grew 22.5%, amidst a growing number of reports about the serious climate impacts of fast fashion.

Average Ethical Spend (£ per household, per year)

Where does ethical money come into it?

The 2018 report suggests that an increasing number of consumers want their spending to have a positive social and environmental impact. Ethical money is the logical extension of this. With more and more press and campaign attention focused on the ‘dirty investments’ of big banks, consumers are increasingly aware that they can and should ensure their money isn’t going into problem sectors such as fracking.

I switched to Triodos”, Tomasz Kozlowski, aged 28, explained, “because I want my money to actively contribute to the improvement of the environment and society around me. I want to know exactly how my money is used, and that it is used ethically, and Triodos’s transparency is second to none.”

In recent years, however, the ethical money market has struggled to maintain the same growth patterns of other sectors. Last year was no exception. At a rate of 1.2%, growth in the ethical finance sector was outstripped by inflation. With the banking market still dominated by the big five, switching to an ethical bank seems like the next step many could make towards more ethical spending.

Indeed, ethical investments and share issues were already on the rise, growing by 6.3% and 9.9% respectively in 2017.

Challenges ahead

Unfortunately, it is not just the finance sector that has seen challenges in recent years. The drive for green options in 2017 was offset overall by the removal of government support for green spending. Sales of solar panels fell by 87.4% in 2017 after the government reduced support for at-home solar energy generation. Since 2016, the government has significantly cut incentives for installing solar panels at home – leaving the market declining ever since.

The market for alternative fuel vehicles continued to grow, yet the market for fuel-efficient cars also fell by 28.4%, following changes to road taxation. As of April 2017 new rules leave buyers of fuel-efficient cars £140 worse off after the first year than under the previous regulations.

The impact of such changes on the market as a whole are apparent. With these sectors included, UK ethical spending grew just 2.5% overall. Yet, if the decline in solar panel sales and energy-efficient cars is excluded, it looks far more healthy at 5.5%.

Positive news

Overall the underlying trend appears positive as the appetite for greener consumption continues to grow. The evidence clearly shows that if properly supported by the government, ethical consumption could have an even more positive impact on the environment by providing a tangible and accessible means of positive action to consumers.

About Ethical Consumer

Ethical Consumer is an independent, not-for-profit, multi-stakeholder co-operative with open membership, founded in 1989 and based in Manchester.

For over 25 years it has been the hub of the ethical consumer movement, helping consumers to shop ethically, campaigners to challenge corporate power and businesses to improve their supply chain. Its mission is to make global businesses more sustainable through consumer pressure. 
 

If you'd like to find out more, visit Ethical Consumer's website, where previous Markets Reports are also available to download.