Fairtrade boom shows why green firms need to start making more noise

The surge in the market for Fairtrade and green goods deserves to be celebrated and supported, argues James Murray

27 Feb 2012, 15:24

It wasn't supposed to be this way. After the crash of 2008 all the conventional wisdom suggested the green economy would stall, with the green and ethical consumer sectors the hardest hit as cash-strapped shoppers turned their backs on things they could no longer afford, like environmental fears and a social conscience.

Yet as today's figures from the Fairtrade Foundation show, nothing could be further from the truth. The market grew 12 per cent last year from £1.17bn to £1.32bn, while a raft of big name retailers and food companies have this week lined up to announce plans to turn more product lines Fairtrade.

The results do not stand in isolation; late last year the Co-operative Group reported that the market for "ethical" goods grew by almost nine per cent during 2010 to a whopping £46.8bn, while government figures suggest the market for "green goods and services" in the same year grew 4.3 per cent to £117bn.

These results are both hugely encouraging and faintly bemusing, not least because of the paucity of comment they have provoked.

In a flat economy you would expect news of a billion pound plus sector growing at a double digit rate would attract plenty of interest from the business pages. And yet, while Fairtrade Fortnight will undoubtedly secure a fair few headlines, there has been very little hard-nosed business analysis of why this sales surge has taken place and what it means. The news the ethical goods and services market grew almost nine per cent created even less of a ripple, while the government's official figures for the growth of the green goods and services market are so poorly promoted that I've been met with a look of surprise when quoting them to business execs and policy wonks who otherwise watch the green economy with hawk-like intensity.

Can you imagine the media and political cheerleading if these rates of growth were being repeated by traditional sectors that business papers and politicians understood – we would be hearing of these success stories every day. George Osborne would barely be able to mention them in speeches without succumbing to paroxysms of unconfined delight.

It strikes me that two hugely significant phenomena are under way; one massively encouraging for the green economy, and the other far less so.

First, as the Carbon Trust's Tom Delay explained at BusinessGreen's Leaders Forum last autumn, consumers have in large numbers decided that ethical and environmental values are important to them, and while many of them are feeling the pinch they are not willing to compromise those values. Clear majorities want greener products, want ethical supply chains, and, as the disgracefully suppressed Sunday Times YouGov poll showed, they want renewable energy.

It is informative to note that much of the Fairtrade Foundation's growth has come because retailers have decided to switch entire product ranges such as bananas and sugar over to Fairtrade, absorbing much of the additional cost and offering the products at little or no premium because they have calculated that customers will reward them for their progressive stance. It is a calculation that is paying off.

There are, of course, countless caveats attached to this otherwise encouraging shift in corporate and consumer values.

There are plenty of questions – some legitimate inquiries and some illegitimate scare-mongering – as to how robust green and ethical product certifications are, while there are also entirely valid concerns that this trend remains too marginal and too confined to middle class markets to deliver the large scale systemic change required to tackle environmental challenges on the scale of climate change. Equally, the picture is not universal and as such there are plenty of green products that are struggling to gain traction, be it the shrinking organic food market or the as yet disappointing levels of demand for electric cars. Meanwhile, as the Guardian's excellent series on wind energy this week again confirms there are small groups of free market think tanks and well-funded vested interests committed to delaying the transition to a greener economy for as long as physically possible.

But despite these caveats the numbers speak for themselves. In an economy that has been as flat as the proverbial pancake for around two years the green goods and services market is offering one of the few areas of solid, and in some places stellar growth. With consumers and corporates showing few signs of reversing their commitment to new and more sustainable ways of doing business the trend's long term future looks assured.

Which brings me to the second, far more concerning, unexamined phenomena – the way in which this sector is being marginalised and ignored by media and policymakers.

The corridors of Whitehall and Fleet Street are so far behind the level of green understanding and ambition on display in most boardrooms and living rooms as to be laughable. The appetite for more sustainable business models and products is everywhere you look, and yet there is a huge reluctance in the mainstream media to report on this fundamental shift in the way many firms operate, just as there is a reluctance in government to celebrate and enable this shift.

Inevitably, things are gradually changing. The desire for politicians of all stripes to suddenly pledge their support for a new type of capitalism indicates they are aware of the shift in public attitudes that is evidenced by the ability of the green and ethical economy to continue to grow at a time when most commentators were predicting it would implode. Meanwhile, it finally appears to be dawning on some policymakers that in constantly protecting high carbon sectors they are propping up parts of the economy at the expense of emerging green sectors that are actually larger than the traditional industries they have become so used to listening too.

The Fairtrade Foundation deserves its fortnight in the sun, but it is now up to the wider green economy to make it clear that the conventional wisdom was wrong and ensure the rapid growth green businesses are enjoying is both appreciated and nurtured year round.

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Previously known as the BusinessGreen Blog, James' Blog features musings, observations and occasional rants from BusinessGreen editor James Murray

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