Csr

The
Ethical
Consumerism
Report
2007
Contents
3 Foreword
4 Executive Summary
6 Ethical Consumers
6 Ethical consumer market
6 Ethical behaviours
8 Average Spend per Household
9 Food & Drink
9 Organic food & drink
10 Fairtrade food & drink
10 Consumer food & drink boycotts
10 Sustainable fi sh
11 Food miles
11 Free-range eggs
11 Freedom Food
12 Green Home
12 Household insulation
12 Energy effi cient boilers
12 Green energy tariffs
13 Energy effi cient appliances
13 Energy effi cient light bulbs
13 Micro-generation
14 Eco-Travel & Transport
14 Consumer boycotts
14 Environmental public transport
15 Green cars
15 Responsible tour operators and
environmental tourist attractions
16 Ethical Personal Products
16 Ethical cosmetics
16 Clothing boycotts
17 Charity shops
17 Ethical clothing
17 Buying for re-use
18 Ethical Finance
19 About this report
19 Further information
3
Foreword
Household expenditure on ethical goods and services has almost
doubled in the past fi ve years: on average, every household in the
UK spent £664 in line with their ethical values in 2006 compared
with just £366 in 2002, an increase of 81 per cent. However,
whilst the overall ethical market in the UK is now worth £32.3
billion a year, up nine per cent from £29.7 billion in the previous
12 months, it is still a small proportion of the total annual household
consumer spend of more than £600 billion.
The annual household expenditure includes £190 on ethical food and drink, such as
Fairtrade and organic. Fairtrade sales grew by 46 per cent, driven, in part, by increased
consumer awareness of the Fairtrade mark, which is now recognised by almost three
in fi ve, and greater availability of Fairtrade products.
Households spent £213 on home products, including energy effi cient light bulbs and
‘A’-rated kitchen appliances. Aided in part by greater product choice and a general
reduction in the price differential with incandescent light bulbs, sales of energy
effi cient light bulbs increased by 44 per cent.
However, only £6 per household is spent on renewable energy, including microgeneration.
It is estimated that less than one per cent of households have invested
in micro-generation and the government’s decision to reduce the level of grants
available can only make micro-generation an uneconomic option for even more
households.
Whilst the overall ethical market continues to grow steadily, the report shows that
some areas have seen a marked decline. For example, charity shops, where sales
are down 13 per cent, appear to have been squeezed by the budget retailers selling
cheaper clothes and Internet auction sites offering an alternative outlet for second
hand goods.
Interestingly, 2006 also saw the emergence of a signifi cant number of consumers
claiming to avoid budget clothing outlets on the basis that low cost is taken as a likely
indicator of poor supplier labour conditions. Sales of ethical clothing increased by 79
per cent.
Overall, ethical food and drink registered the biggest sector increase of 17 per cent,
up from £4.1 billion to £4.8 billion. The whole sector saw a year on year rise, but the
market for sustainable fi sh increased a massive 224 per cent following the introduction
of new lines by some of the leading brands. Sales of Fairtrade goods, such as tea,
coffee and bananas, increased by £90 million to £285 million (46 per cent).
Ethical investments were up 18 per cent this was in line with the overall market.
Ethical banking saw a 11 per cent increase from £5 billion to £5.6 billion.
The market share for ethical food and drink appears to have broken through the ‘green’
glass ceiling of 5 per cent, and factoring in the effect of consumer boycotts, the market
share could be as high as 7 per cent. Potentially, we could see market share hit ten per
cent in the next year or two.
However, it’s vital that we not lose sight of the fact that ethical consumerism is still
a small proportion of total spend in the UK and cannot be relied upon to deliver the
signifi cant 60-80 per cent reductions in CO2 needed. For example, the average annual
spend per household on renewable energy is just £6, equivalent to the cost of a
cinema ticket.
Ethical consumers play a vital role in the early adoption and development of ethical
products and services, but it will only be through legislation that we will secure
the necessary changes to deliver mass market, low carbon lifestyles.
Barry Clavin
The Co-operative Bank
4 Executive Summary
The total value attached to ethical consumerism in
the UK stands at £32.3 billion in 2006. This reflects
the total economic value attached to the broad
range of personal choices, be they for food, finance
or charitable donations that, at some level, are
influenced by a concern for the environment, animal
welfare or human rights.
In addition it reflects the economic value that
consumers attach to ethical choices to support their
community via local shopping or to boycott brands
whose behaviour conflicts with their ethical priorities.
Of course, there is also much ethical consumption
that goes on that can’t be captured. For example,
it has been reported that a recent increase in sales
of washing lines and clothes pegs was motivated
in part by consumer concerns about the climate
change impact of using tumble dryers. At the same
time this could also reflect a growing inclination
within business and the media to report such events
through a ‘green’ filter.
At £32.3 billion, the measurable market for ethical
consumerism has now grown at an average rate of
15 per cent per annum since 2002 compared to a five
per cent annual increase over the same period for
overall household expenditure.
Key Findings
Ethical Consumerism in the UK, 1999-2006
£9.6bn £11.9bn
£13.5bn
1999 2000 2001 2002 2003 2004 2005 2006
35
30
25
20
15
10
5
0
£ billion
£18.4bn
£22.1bn
£26.6bn
£29.7bn £32.3bn
• Ethical consumer market: Six per cent of the UK
adult population (2.8 million people) are committed
ethical consumers, shopping for ethical products
and services every week – see page 6
• Ethical behaviours: Across eight separate
indicators, between 1999 and 2007, UK
consumers, across all age groups, reported an
increased predisposition to ethical behaviours
– see page 6
• Average spend per household: The average
amount spent on ethical products and services
has almost doubled from £366 per household in
2002 to £664 in 2006 – see page 8
• Food and drink: Ethical sales now account for
5.1 per cent of the UK’s total food and drink sales.
Including consumer boycotts, this rises to 6.8 per
cent. Sales of Fairtrade products have increased
46 per cent to £285 million – see page 9
• Green home: Within an overall spend of £6.2
billion on environmentally friendly and energy
efficient home products, spend on energy efficient
light bulbs has increased by 44 per cent to £26
million – see page 12
• Eco-travel and transport: Six per cent growth to
£1.7 billion reflects limited consumer choices for
eco-travel. However, an increased proportion of
consumers did report using public transport for
environmental reasons, in 2006 – see page 14
• Ethical personal products: Overall spend
is static at £1.5 billion. Consumer boycotts
of clothing retailers did grow by 20 per cent
reflecting a concern amongst some consumers
that low prices could mean poor labour conditions
– see page 16
• Ethical finance: At £13.3 billion, 2006 saw the
largest ever increase of monies channelled into
ethical forms of finance, with a net increase of
£1.7 billion over the 2005 value – see page 18
5
Ethical consumerism in the UK, 2005-2006
2005 2006 % growth
£m £m 2005-2006
Ethical Food & Drink
Organic 1,473 1,737 18
Fairtrade 195 285 46
Free-range eggs 240 259 8
Free-range poultry 100 116 16
Farmers’ markets 210 225 7
Vegetarian products 639 664 4
Freedom Food 16 17 6
Sustainable fish 17 55 224
Dolphin friendly tuna 218 223 2
Food & drink boycotts 993 1,214 22
Sub-total 4,101 4,795 17
Green Home
Energy efficient appliances 1,661 1,824 10
Energy efficient boilers 1,366 1,471 8
Micro-generation 26 32 23
Green mortgage repayments 385 396 3
Energy efficient light bulbs 18 26 44
Ethical cleaning products 27 34 26
Sustainable timber 716 696 -3
Green energy 54 127 135
Insulation 241 247 2
Rechargeable batteries 35 42 20
Buying for re-use - household products 1,330 1,291 -3
Sub-total 5,859 6,186 6
Eco-travel and Transport
Public transport 377 682 81
Responsible tour operators 101 103 2
Environmental tourist attractions 16 18 13
Green cars 98 96 -2
Travel boycotts 1,030 817 -21
Sub-total 1,622 1,716 6
Ethical Personal Products
Ethical clothing 29 52 79
Ethical cosmetics 317 386 22
Charity shops 411 359 -13
Buying for re-use - clothing 421 360 -14
Clothing boycotts 281 338 20
Real nappies 5 7 40
Sub-total 1,464 1,502 3
Community
Local shopping 2,276 2,585 14
Charitable donations 2,860 2,288 -20
Sub-total 5,136 4,873 -5
Ethical Finance
Ethical banking 5,020 5,551 11
Ethical investment 6,098 7,223 18
Credit unions 388 428 10
Ethical share holdings 49 55 12
Sub-total 11,555 13,257 15
Grand Total 29,737 32,329 9
6
Ethical Consumers
While ethical spending has become more mainstream, a core of
the most committed ethical consumers still account for a majority
of ethical purchases.
Ethical consumer market
• Six per cent of the UK adult population (2.8
million people) are committed consumers of
ethical products and services; up from five
per cent in 2003. These consumers shop for
ethical products on a weekly basis and spend
an estimated annual £1,600 per household
on ethical food and drink.1 Committed ethical
consumers tend to be 30-44, slightly more
upmarket (63 per cent are ABC1) and equally
representative of men and women.
• 11 per cent of the UK adult population (5.2
million people) are regular consumers of ethical
products and services, up from eight per cent in
2003. These consumers look to purchase ethical
products and services every month and spend
an estimated £360 per household on ethical
food and drink each year.
• 31 per cent of the UK adult population (14.7
million people) can be described as passive
ethical consumers, engaged on ethical matters
on a less frequent basis. These consumers
spend an estimated £180 per household on
ethical food and drink each year.
1 Based on total number of households of 25.3 million (Source: ONS Household Numbers and Projections, Regional Trends 38, 2005)
% people undertaking the following at least once during the year
Recycled
Supported local shops/suppliers
Chose product/service on basis of company’s reputation
Avoided product/service on basis of company’s reputation
Recommended a company on basis of company’s reputation
Felt guilty about unethical purchase
Actively sought information on company’s reputation
Actively campaigned on environmental/social issues
2007
1999
Ethical behaviours
73%
96%
61%
83%
51%
59%
44%
57%
52%
55%
17%
35%
24%
33%
15%
25%
7
Ethical behaviours
Across eight separate indicators, between 1999 and 2007,
UK consumers, across all age groups, reported an increased
predisposition to ethical behaviours.
• Whilst UK household waste recycling rates
continue to lag behind others in Europe, 96 per
cent of the population reported that they had
recycled in the previous 12 months. This is up from
three quarters of the population eight years ago.
• An increased proportion of consumers now report
shopping to support their local communities.
More than eight out of ten consumers now shop
to support their local shops, up from six out of ten
in 1999. Consumers in the 60+ age group tend
to be less responsive to ethical messages as a
whole, and are least likely to be committed ethical
consumers. However older people are most likely
to buy products to support local shops.
• Consumers are increasingly prepared to check out
a business’s ethical credentials before deciding on
whether to deal with them. A third of consumers,
up from a quarter in 1999, will now actively seek
out information on a company’s reputation.
Younger people are much more likely to actively
seek information about a company’s behaviour.
Among 18 to 29 year olds, 42 per cent had done
so at least once in the past year, compared with
33 per cent on average and just 20 per cent in the
60+ age group.
• A significant, and increasing, number of
consumers feel unable to always make an
ethical purchase. Be it down to availability, price
or perceived quality, over a third of consumers
now report having felt guilty about ‘unethical’
purchases. This indicates that a number of
consumers are aware of the issues and choices
and would, other things being equal, boost the
markets for ethical products and services.
• One out of four consumers campaigned on an
environmental or social issue in 2007. There have
been a number of high profile campaigns on
matters such as climate change, including calls for
individuals to lobby their MPs for a strong Climate
Change Bill. It tends to be younger people that are
the most likely to campaign on ethical issues, with
30 per cent of 18 to 29 year olds having done so in
the past 12 months.
% who report having done the following at least once in the last 12 months
Actively campaigned about an environmental/social issue
60+
45-59
30-44
18-29
Total
19%
23%
30%
30%
25%
Actively sought information on a company’s behaviour
60+
45-59
30-44
18-29
Total
20%
30%
39%
42%
33%
Avoided a product or service because of a company’s behaviour
60+
45-59
30-44
18-29
Total
45%
56%
66%
59%
57%
Bought to support local shops/suppliers
60+
45-59
30-44
18-29
Total
83%
87%
82%
78%
83%
8 Average Spend per Household
Food
& drink
£190
Sustainable
home products
£81
Cosmetics
£15
Clothing
£44
Energy
efficiency
£132
Renewable
energy
£6
Transport
£68
Grand total
£664
Insulation
£10
2002 spend
£9
2002 spend
£8
2002 spend
£30
2002 spend
£44
2002 spend
£65 2002 spend
£109
2002 spend
2002 spend £33
£0
Green
mortgages
£16 2002 spend
£1
2002 total
£366
Local Shops
Local
shopping
£102
2002 spend
£67
2 Based on total number of households of 24.4 million (2002), 25.3 million (2006); source: ONS Household Numbers and Projections, Regional Trends 38, 2005. 3 ‘Energy efficiency’ includes energy efficient electrical appliances, energy
efficient boilers & rechargeable batteries; ‘transport’ includes all eco-travel & transport, ‘renewable energy’ includes micro generation & green energy tariffs; ‘food & drink’ includes all ethical food and drink, ‘Sustainable home products’
includes sustainable timber, buying for re-use (household products) & energy efficient light bulbs; ‘clothing’ includes ethical clothing, charity shops, buying for re-use (clothing), clothing boycotts and real nappies.
In 2006, the average spend per household on ethical products and
services, excluding charitable donations and ethical finance, reached
£664, almost double the £366 annual spend for 2002. Of this total,
spend to address climate change, for example on green transport,
energy efficiency and renewable energy, has grown as a proportion
from 23 to 35 per cent, reaching £232 by 2006.2
Ethical spending by the average household, £ per year3
9
Food & Drink
Consumer spend on ethical food and drink stands at £4.8 billion,
an increase in value of 17 per cent in 2006. This includes consumer
boycotts, and equates to 6.8 per cent of consumer spend on food
and drink,4 up from 6.1 per cent in 2005.
Ethical Food & Drink in the UK, 2005-2006
2005
2,000 2006
1,500
1,000
500
0
Organic £1,473m
Boycotts
Vegetarian
Fairtrade
Free-range eggs
Farmers’ markets
Dolphin friendly tuna
Free-range poultry
Sustainable fish
Freedom Food
£ million
£1,737m
£993m £1,214m
£639m
£664m
£195m
£285m
£240m
£259m
£210m
£225m
£218m
£223m
£218m
£116m
£17m
£55m
£16m
£17m
Organic food & drink
Spend on organic food and drink increased by 18
per cent in 2006 to reach £1.7 billion, equivalent
to 2.4 per cent of the £70.9 billion market for food
and drink. Taste, quality and the environment are
given equivalent rankings as the three main reasons
given by consumers for purchasing organic food
products.5
After its early impressive growth, markets for
organic produce slowed down. Over the last two
years this has been reversed. Indeed, should the
recent independent study that organic produce
contains more nutrients than conventional produce
be substantiated then sales of organic produce
could once again accelerate.6
4 Based on household consumption expenditure on food and drink of £70.9 billion in 2006 (Source: ONS, Consumer Trends 2007 Quarter 1). 5 As part of the Co-operative Bank Ethical Household Spend Survey, 1,065
consumers were asked which, if any, of the factors given were the top three reasons that influenced the decision to purchase organic food in the last 12 months. 6 Quality Low Input Food project, 2007 (www.qlif.org).
Top reasons for purchasing organic food
Quality/taste
Environment (fewer pesticides)
Health
Animal welfare
Price
None of these
53%
52%
50%
34%
12%
4%
10 7 Fairtrade Foundation press release, 10 August 2006. 8 Marine Stewardship Council Annual Report 2006/07.
Year
1999
2000
2001
2002
2003
2004
2005
2006
Spend £m
390
605
805
910
1,000
1,193
1,473
1,737
% growth
55
33
13
10
19
23
18
Year
1999
2000
2001
2002
2003
2004
2005
2006
Spend £m
22
33
51
63
92
141
195
285
% growth
50
53
25
47
52
39
46
Fairtrade food & drink
Fairtrade continues to show strong growth, with
sales of products carrying the FAIRTRADE Mark
growing by 49 per cent to reach £285 million in
2006. The Fairtrade Foundation reports that the
FAIRTRADE Mark is now recognised by 57 per cent
of British adults, an increase of five percentage
points in one year. Retail sales of Fairtrade tea and
coffee reached £118 million, a rise of 43 per cent
since 2005. Fairtrade tea and coffee’s market share
grew from seven per cent in 2005 to ten per cent
in 2006. Strong growth was also seen in Fairtrade
wines, which increased by 68 per cent in retail
value.7
Consumer food & drink boycotts
In this report, the value attributable to boycotts
reflects the income lost by one brand to another
because a consumer switched brands because
of an ethical concern be it human rights, animal
welfare or the environment. To avoid double
counting, the value of boycotts excludes instances
where consumers switched brands to Fairtrade,
organic or any other product categories included
elsewhere within the report.
Boycotts of food and drink products increased by
22 per cent in 2006 to reach £1,214 million. The
most common reasons cited by consumers were
concerns over labour rights in companies’ supply
chains, irresponsible marketing practices in the
developing world and animal welfare.
Sustainable fish
Sustainable fish certified by the Marine Stewardship
Council (MSC) trebled in value from £17 million
to £55 million. The aim of the MSC is to reverse
the decline in fish stocks, safeguard livelihoods
and deliver improvements in marine conservation
worldwide. Globally, there were 22 MSC-certified
fisheries by March 2007, up from 16 the year before,
and the number of businesses that trade in MSCcertified
fish rose from 237 to 433 in the same
period.8
Food & Drink (cont…)
Organic Food Fairtrade Food
11
Food miles
Some 13 per cent of UK adults reported avoiding
buying groceries because of concerns about
‘food miles’, or the environmental impact of food
transport, and purchased a more regionally
produced item instead.
Three per cent of people claimed to avoid food
labelled from Africa and two per cent avoided food
from Latin America. However, emerging research
has shown that certain air-freighted products
could have lower embedded carbon impacts than
more locally grown produce.9 As such, there is
increasing debate over whether ‘food miles’ are
a suitable way to judge the environmental impact
of products and services. So, this may turn out
to be a short-lived trend as consumers begin to
also factor into their purchasing decisions other
potential ethical repercussions, e.g. a loss of income
for farmers in developing countries. As such, this
trend in consumer behaviour will be tracked for a
number of years before its economic value can be
incorporated within the report.
Food origin
Europe
Africa
Australasia
South America
Middle East
All regions
% of population
5
3
2
2
1
1310
Percentage of UK adults avoiding products
due to ‘food miles’ concerns
Europe 41%
Africa 26%
Australasia 13%
South America 12%
Middle East 8%
Sources: Data sources for food and drink data are: Soil Association (organic), Fairtrade Foundation (Fairtrade), British Eggs Information
Service (free-range eggs), British Poultry Council (free-range poultry), National Farmers’ Retail and Markets Association (FARMA) & Mintel
(farmers’ markets), Vegetarian Society/Mintel (vegetarian foods), MSC (sustainable fi sh), Earth Island Institute (dolphin friendly tuna). Freedom
Food data covers retail sales of RSPCA Freedom Food certifi ed products collected from selected retailers. Food boycotts data is derived from
the Co-operative Bank Ethical Household Spend Survey.
Origin of produce avoided due
to concerns over ‘food miles’
9 Comparative Study of Cut Roses for the British Market Produced in Kenya and the Netherlands, Cranfi eld University, 2007. 10 Percentages do not sum as consumers may avoid products from more than one region.
11 As part of the Co-operative Bank Ethical Household Spend Survey, 1,065 consumers were asked which, if any, of the reasons listed are the top three reasons that infl uenced the decision to purchase free-range eggs
in the last 12 months. 12 RSPCA Trustees’ Report and Accounts 2006. 13 DEFRA, Eggs & Poultry Assurance Schemes, www.defra.gov.uk.
Free-range eggs
In 2006, sales of free-range eggs topped £259
million, compared with sales of £255 million for
non-free-range eggs. Sales of free-range poultry
reached £116 million in 2006, an increase of 16 per
cent since 2005. Concern for animal welfare is the
primary reason why consumers purchase freerange,
and this concern resonates most strongly
with young women.11
Freedom Food
In 2006, the value of foods carrying the RSPCA’s
Freedom Food logo reached £17 million, an increase
of ten per cent over 2006. The number of animals
reared under the scheme, which stipulates RSPCA
animal welfare standards, reached 61 million in
2006, an increase of 45 per cent in the year.12
About 80 per cent of free-range eggs are
sold under the Freedom Food label.13
12 Green Home
Spend on energy-efficient and sustainable home products is over £6
billion in 2006, a growth rate of six per cent over 2005. In the main,
it continues to be sales of ‘A’ rated energy efficient appliances and
boilers which provide the overwhelming bulk of total sales.
Green Home spend in the UK, 2005-2006
2005
2,000 2006
1,500
1,000
500
0
Efficient appliances £1,661m
Efficient boilers
Buying for re-use
Sustainable timber
Green mortgages
Insulation
Green energy
Rechargeable batteries
Cleaning products
Micro-generation
Energy efficient light bulbs
£ million
£1,824m
£1,366m
£1,471m
£1,330m
£1,291m
£716m
£696m
£385m
£396m
£241m
£247m
£54m
£127m
£35m
£42m
£27m
£34m
£26m
£32m
£18m
£26m
Household insulation
14 BRE Domestic Energy Fact File 2006. Energy Savings Trust, http://www.energysavingtrust.org.uk/home_improvements/home_insulation_glazing/cavity_wall_insulation. 15 Data provided by
Heating and Hotwater Industry Council (HHIC). 16 Sustainable Consumption Roundtable, May 2006. 17 363,500 households on green energy tariffs (The Co-operative Bank/ECRA).
Some six per cent of the UK adult population
purchased insulation in the last 12 months, with 65
per cent citing concern for the environment as a
motivating factor. In addition, seven per cent of the
population have installed double-glazing in the past
12 months, and 15 per cent of these cite concern for
the environment as a reason. In total, an estimated
£247 million is spent on insulation and double-glazing
for environmental reasons. While this is encouraging,
the number of under-insulated homes remains high;
for example only 37 per cent of homes with cavity
walls have cavity wall insulation, despite a payback
period of just five years.14
Energy efficient boilers
‘A’-rated boilers now account for 69 per cent of boiler
sales by volume,15 and grew by eight per cent in 2006
to reach £1.5 billion in sales. Building Regulations
introduced in 2005 mandate a minimum ‘B’-rating for
new and replacement boilers, effectively banning all
models other than condensing boilers.16
Green energy tariffs
Spending on green energy tariffs has more than
doubled in 2006, growing from £54 million to £127
million. According to the National Consumer Council,
almost two thirds of people say they would consider
switching to a green energy tariff. However the
proportion of households on green tariffs remains
under two per cent.17
13
Energy efficient appliances
In 2006, spend on energy efficient appliances
reached £1.8 billion, a growth rate of ten per cent
over 2005. Sales of ‘A’-rated appliances now
account for 56 per cent of all appliance sales,
up from 45 per cent two years ago. The high
penetration of ‘A’-rated appliances in areas such
as washing machines and dishwashers indicates
that a revision in efficiency ratings may be under
consideration to help consumers find the most
efficient products on the market.
After price, most consumers say that the energy
efficiency rating is an important criteria in the
decision making process.18
Energy efficient light bulbs
Sources: Data on energy efficient appliances (‘A’-rated cold, wet and cooking appliances) and energy efficient light bulbs (CFLs) is from GFK
Marketing. Energy efficient (‘A’-rated) boiler data is derived from HHIC, with analysis of average prices. 2005 data is estimated. Microgeneration
data consists of household contributions and grant spend on microgeneration from Energy Savings Trust, ClearSkies, Low Carbon Buildings
Program and Smart Energy, plus retail sales of climate offsets from selected providers. Green mortgage repayments includes repayments for
Co-operative Bank and Ecology Building Society mortgages. Ethical cleaning products data is collected from company turnovers and sales
of BUAV-certified household products. Sustainable timber data covers sales of Forest Stewardship Council certified products collected from
leading retailers. Green energy data is collected from providers of green electricity tariffs and derived using ONS data on average annual
electricity spend. Insulation and buying for re-use are derived from Co-operative Bank Ethical Household Spend Survey data. Rechargeable
batteries data is from Mintel (2005); 2006 data is estimated from historic trends.
18 As part of the Co-operative Bank Ethical Household Spend Survey, 1,065 consumers were asked which, if any, of the reasons listed are the top three reasons that influenced the decision to purchase white
goods in the last 12 months. 19 Energy Savings Trust, http://www.energysavingtrust.org.uk/energy_saving_products/types_of_energy_saving_recommended_products/energy_saving_light_bulbs.
In 2006, sales of Compact Fluorescent Lamps
(CFLs) reached £26 million, an increase of 44 per
cent over 2005. CFLs, which first went on sale in
the early 1980s, can save up to £7 a year each in
energy costs.19 However, after over two decades on
the market, they have only obtained a market share
of 16 per cent. In 2007, major retailers reached an
agreement to phase out traditional incandescent
bulbs by 2011, which is set to achieve more in four
years than the market could deliver in 20 years.
Micro-generation
Spending on solar and wind turbine installations by
individuals grew by just £6 million in 2006 to reach
£32 million. Going forward, changes to the grant
allocation system, which were announced in May
2007, have made solar photovoltaic (PV) installations
an uneconomic option for many consumers. The cut
in grants follows a year in which high demand led
to monthly grant allocations under the Low Carbon
Buildings Project (LCBP) frequently running out on
the first day of each month.
Top reason for purchasing white goods
74%
59%
43%
38%
23%
8%
Price
Energy efficiency rating
Design/product features
Brand/manufacturers reputation
Special offers/promotion
None of these
14 Eco-Travel & Transport
Ethical travel & transport in the UK, 2004-2006
Travel boycotts
Public transport
Responsible tour operators
Green cars
Environmental
tourist attractions
1,200
1,000
800
600
400
200
0
£1,112m
2004 2005 2006
£ million
£380m
£88m
£91m
£20m
£1,030m
£377m
£101m
£98m
£16m
£817m
£682m
£103m
£96m
£18m
Consumer boycotts
The value of consumer boycotts declined by 21 per
cent in 2006 to £817 million. As in previous years,
this spend reflects the money that consumers
switched from one fuel retailer to another, typically
due to concerns over the companies’ records on
climate change or human rights. The decline in value
may reflect the change in campaigning emphasis
by the leading NGOs that have switched focus away
from specific companies to broader climate change
themes. As such, it could be anticipated that this
decline may continue into the future.
In 2006, the value attributable to consumer spend on environmental
travel and transport increased by six per cent to £1,716 million.
Given the limited consumer choices, the majority of this spend
reflects consumer boycotts and spend on public transport motivated
by a concern for the environment.
Environmental public transport
As passenger travel on Britain’s
railway network increased by
eight per cent year-on-year,20 the
number of people stating that the
environment is the main reason
for their use of public transport
increased from six per cent in 2005
to nine per cent in 2006. As such,
total spending by passengers on
public transport for environmental
reasons increased to £682 million.
Convenience
No alternative - do not have access to a car
No alternative - too far to walk/cycle
Better for the environment
Cost
Other 8%
8%
8%
15%
21%
33%
Ethical travel & transport in the UK, 2004-2006
20 National Rail Trends, Quarter one 2007 - 2008, Office of Rail Regulation.
15
Sources: Figures on environmental tourist attractions are sourced from admissions, catering and retail income of the largest companies in this
sector. Data for responsible tour operators is sourced from the incomes of the largest tour operator members of www.responsibletravel.com.
Green cars data covers consumer sales of new electric, LPG and hybrid vehicles, collected from manufacturers and industry associations,
together with the value of PowerShift and Clean Up programmes from the Energy Savings Trust (EST), and spending by members of the
Environmental Transport Association (ETA). Travel boycotts and public transport figures are derived from analysis of Co-operative Bank Ethical
Household Spend Survey data.
21 In 2006 the PowerShift and Clean Up grant programmes were closed down. 22 G-Wiz, Micro-Vett Ydea, NICE Mega City, Sakura Maranello4 , Elettrica. 23 ENDS Report 376, May 2006, pp 13-14.
Green cars
When it comes to transport, many consumer
choices are not captured in a way that can be
reported upon. So, for example, where consumers
are choosing a more energy efficient car or
improving the efficiency of their car through better
driving you cannot attach an economic value to
these choices.
What can be reported upon is spend on green cars,
by which we include, in the main, sales of hybrid,
LPG and electric vehicles. Overall, green car sales
declined by two per cent to £96 million in 2006.
However, hybrid car sales, which make up the bulk
of sales in this category, actually saw sales growth
of 20 per cent in 2006, and the decline was down to
liquid petroleum gas (LPG) vehicles and the closure
of grant schemes.21 Furthermore, until there is
greater consumer choice, there were five models of
electric car available in the UK in 2006,22 the market
will remain at an embryonic stage.
Going forward, the voluntary fuel efficiency label
for cars, similar to those for electrical appliances,
was introduced in 2005 and established six bands
of fuel efficiency corresponding to six grades of
vehicle excise duty. Again, this could aid consumer
choice once more ‘A’ or ‘B’ rated vehicles become
available. In addition, the European Commission this
year announced plans for mandatory targets to limit
average new car emissions to 130 grams of carbon
dioxide per kilometre (g/km) by 2012. Data from the
Society of Motor Manufacturers and Traders shows
that in 2005, new cars bought in the UK emitted
169.4g/km on average, meaning the industry is all
but certain to miss its target to cut emissions to
140g/km by 2008.23
2001
2002
2003
2004
2005
2006 £18m
£77m
£79m
£69m
£88m
£101m
£103m
£16m
£20m
£19m
£23m
£19m
Responsible tour operators
Environmental tourist attractions
Responsible tour operators and environmental tourist attractions
Since 2001, spend with responsible tour
operators and environmental tourist attractions
has climbed 25 per cent to reach £121 million.
The bulk of this value is accounted for by
responsible tour operators.
Responsible tour operators in this report covers
holidays designed to consider the environmental
and social impacts on the destination, while
environmental tourist attractions includes UKbased
environmental attractions.
16 Spending on ethical personal products remained stable in 2006.
At £1,502 million, the total sales of clothing and cosmetics registered
an overall growth rate of just three per cent. However, on the back
of extensive media coverage, sales of Fairtrade and organic clothing
grew by 79 per cent to £52 million, indicating a real potential for a
high street ethical clothing option.
Ethical personal products in the UK, 2004-2006
450
400
350
300
250
200
150
100
50
0
£23m
2004 2005 2006
£ million
£199m
£383m
£381m
Ethical clothing
Ethical cosmetics
Charity shops
Buying for re-use - clothing
Clothing boycotts
Real Nappies
£296m
£4m
£29m
£317m
£411m
£421m
£281m
£5m
£52m
£386m
£359m
£360m
£338m
£7m
Clothing boycotts
Ethical Personal Products
Consumers tend to engage in ethical boycotts to
‘punish’ companies or brands that they perceive to be
acting irresponsibly and where there is no ethical option.
Whilst there are a significant and growing number of
small or on-line ethical retailers it is anticipated that the
trend to boycott clothing retailers will continue until there
are accessible and affordable high street options for
ethical clothing.
Historically, clothing boycotts have been aimed at
global sportswear manufacturers, over allegations of
sweatshop working conditions. As a result a number
of major brands have invested considerable resource
in improving the management of their supply chains.
Most consumers report that once they have boycotted
a brand they are highly unlikely to return to it. However,
it would appear that where businesses are taking a
responsible approach to such issues this is filtering
through to consumers, as 2006 saw less evidence for
boycotts of such brands.
However, 2006 did see the emergence of a significant
number of ‘low-cost’ clothing boycotts. For a number
of consumers it would appear that low cost is now
a potential indicator of poor labour conditions.
Subsequently, overall clothing boycotts grew by 20 per
cent in 2006 to reach £338 million.
24 Based on £11.5 billion household expenditure on personal care not including toilet paper (Source: ONS Family Spending 2006).
Ethical cosmetics
The market for natural, organic and non-animal-tested
cosmetics grew by 22 per cent in 2006 to reach £386
million, accounting for three per cent of the overall
cosmetics market.24 The majority of these sales are
cosmetics certified under the Humane Cosmetics
Standard, which certifies that a company has not
conducted or commissioned animal testing since a
fixed cut-off date. No licences have been granted for
cosmetic testing in the UK since 1998, although there
is no ban on selling cosmetics in the UK that have
been tested on animals outside of the UK.
17
Buying for re-use
Some 75 per cent of people in the UK claim to have
purchased a second hand product at least once in
2006. For certain purchases, 22 per cent of people
cite supporting a good cause or the environmental
benefits of buying second-hand as the main
motivating factors. As a result, in 2006 some £360
million can be attributed to spend on second hand
clothing at charity shops, jumble sales and other
second-hand clothing stores for ethical reasons.
This respresents a decline of 15 per cent since 2005.
The rise in popularity of Internet auction sites (which
are not included in this report) and discount clothing
stores may be a cause of this decline in value.
Sources: Ethical clothing data includes organic, Fairtrade and recycled clothing, sourced from Pesticides Action Network (PAN), the Fairtrade
Foundation and company income data respectively. Fairtrade clothing data pre-2006 is sourced from IFAT-accredited fair trade clothes outlets.
Ethical cosmetics data includes Natural & Organic Personal Care Products from Organic Monitor and turnover of products not tested on animals
according to BUAV’s HCS label and other independently audited standards. Charity shops data covers the income of the top 500 charities from
charity shop donated goods, from CAFOD. Real nappies data is sourced from Keynote, Organic Baby & Toddler Care July 2007. Charitable
donations covers the voluntary income of the top 500 charities from charitable donations and subscriptions, from ONS. Buying for re-use, local
shopping and clothing boycotts figures are derived from analysis of Co-operative Bank Ethical Household Spend Survey data.
Charity Shops
The income of the UK’s top 500 charities from charity
shop donated goods fell by 13 per cent in 2006 to
reach £359 million. One possible explanation for the
decline is the growing popularity of budget clothes
retailers along with Internet auction sites offering an
alternative outlet for second hand goods.
Organic clothing
Fairtrade clothing
Recycled clothing
Total
2005
£m
Ethical Clothing 2005-2006
45
5
2
52
80
150
0
79
25
2
2
29
2006
£m
% growth
2005-2006
Ethical clothing
Fairtrade and organic certified clothing have shown
strong growth as an increasing number of mainstream
clothing retailers begin selling certified clothing lines.
The first lines of clothing carrying the FAIRTRADE
Mark appeared in November 2005 and with the
support of an increasing number of high street
retailers, achieved £5 million in sales in 2006.
Strong growth is forecast in both Fairtrade and
organic ethical clothing. The Fairtrade Foundation
estimates that sales of Fairtrade cotton products
could reach £45 million in 2007, an increase of over
800 per cent in just one year. The Soil Association
forecasts that at current growth rates, the UK market
for organic cotton products could be worth £107
million by 2008, up from £45 million in 2006.
18 Ethical Finance
Ethical banking
Ethical investment
Credit unions
Ethical shareholdings
Total
2005 £m
5,020
6,098
388
49
11,555
2006 £m
5,551
7,223
428
55
13,257
Ethical Finance in the UK, 2005-2006
% growth 2005-2006
11
18
10
12
15
Ethical Finance in the UK, 1999-2006
8,000
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
£ million
1999 2000 2001 2002 2003 2004 2005 2006
£2,149m
£2,872m
£154m
£1m
£2,594m
£3,702m
£183m
£4m
£3,355m
£3,807m
£224m
£8m
£3,886m
£3,510m
£272m
£12m
£4,461m
£4,214m
£338m
£16m
£4,715m
£5,517m
£352m
£41m
£5,020m
£6,098m
£388m
£49m
£5,551m
£7,223m
£428m
£55m
Ethical banking Ethical investment Credit unions Ethical shareholdings
Sources: Ethical banking includes personal, retail deposits with Co-operative Bank, Triodos Bank and Ecology Building Society. Ethical
investment data includes monies invested in UK ethical funds from EIRIS. Credit union data covers the value of deposits in credit unions from
ABCUL. Ethical shareholdings includes called up share capital plus share premium accounts from the following companies: Cafedirect, Ethical
Property Company, Golden Lane Housing, Lifehaus, Good Energy Group, Shared Interest, Traidcraft, Triodos Renewables, Westmill Wind
Farm, the Phone Co-op.
2006 saw the largest ever increase of funds into ethical forms of
finance. The total value of £13.3 billion represents a net increase of
£1.7 billion over the 2005 value. Ethical investment funds have seen
the fastest growth, rising, in line with the overall market, at 18 per
cent in 2006, to reach £7.2 billion.
The Ethical Consumerism Report 2007 was produced by The Co-operative Bank, with additional research by
the Ethical Consumer Research Association (ECRA). This booklet represents the authors’ personal opinions
and interpretation of the subject and not the views, opinions or policies of The Co-operative Bank. This booklet
may not be reproduced without the express permission of The Co-operative Bank or the authors.
Previous Ethical Consumerism Reports are available at:
www.co-operativebank.co.uk/ethicalconsumerismreport
For further information contact:
[email protected]
With thanks to: YouGov, GfK Marketing Services, DEFRA, BUAV, FSC, The Fairtrade Foundation, www.
responsibletravel.com, EIRIS Services Ltd, Energy Saving Trust, ETA, ClearSkies, IFAT, the Vegetarian Society,
BEIS, Pesticides Action Network (PAN), the Housing Association, The Soil Association, Organic Moniror,
RSPCA, MSC, Earth Island Institute, ABCUL.
ONS data source: National Statistics website: www.statistics.gov.uk. Crown copyright 2006 – Published with the permission of the Controller
of Her Majesty’s Stationery Office (HMSO).
19
About this report
The Co-operative Bank’s Ethical Consumerism Report has been produced for eight consecutive years
and acts as a barometer of ethical spending in the UK.
In this report, ethical consumerism is defined as personal allocation of funds, including consumption and
investment, where choice has been informed by a particular issue – be it human rights, social justice, the
environment or animal welfare.
Figures comprise sales data and values attributable to ethically motivated behaviours (such as boycotts) as
determined by the annual Co-operative Bank Ethical Household Spend Survey. For the 2006 survey, the total
sample size was 1,065 adults. Fieldwork was undertaken between 13th and 17th September 2007. The survey
was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
Further information
The Co-operative Bank p.l.c., Head Office, P.O. Box 101, 1 Balloon Street, Manchester, M60 4EP.
Registered No. 990937 www.co-operativebank.co.uk
We would like our report to have an impact on you – but not on the environment. Which
is why this is printed using vegetable oil-based inks on 100% recycled paper, made in a
totally chlorine-free process. I’m not finished! Please recycle me.

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