Ethical sales triple over decade, says Co-operative Bank

Consumer spending on "ethical" products from Fairtrade food to eco-friendly travel has almost tripled in the past decade, a survey reveals today.

The Co-operative Bank's annual ethical consumerism report, which measures ethical spending, shows that overall the ethical market in Britain has expanded from £13.5bn in 1999 to £36bn a decade later.

The rate of increase in household spending on ethical products outstripped the growth in overall consumer spending, which increased by 58 per cent over the decade.

But overall, the total market for goods that were environmentally friendly, sustainable or supported poor communities remained a small percentage of the £891bn spent by households last year.

Some sectors enjoyed huge growth, including Fairtrade goods, which pay a premium to farmers and producers in poor countries to help them work their way out of poverty, according to the survey.

The Fairtrade market, which now covers products from developing countries ranging from chocolate and coffee to cotton, was worth £22m in 1999. Last year sales of Fairtrade products had grown to £635m and the Co-operative is predicting it could break the £1bn barrier in 2010. The Co-operative was the first major supermarket to support the concept of Fairtrade 15 years ago.

The survey also reveals that spending on "green" products for the home, from energy-efficient boilers to rechargeable batteries, has increased fivefold in the past decade, up from £1.4bn in 1999 to £7bn.

Average household spending on measures tackling climate change has also increased over the decade, from £23 a home to £251, but spending on renewables and eco-travel has remained relatively low. At the same time, the mature financial services market has seen ethical banking and investments triple over the course of the decade.

Neville Richardson, chief executive of the Co-operative Financial Services, said: "Although the report shows that the idea of ethical purchasing is now well established amongst many consumers, there is still a long way to go if we are all going to adopt the low-carbon lifestyle needed to avoid cataclysmic climate change. The growth in energy-efficient products such as boilers, white goods and more recently light bulbs, has been underpinned by government intervention."

He said that in order for Britain to reduce its carbon emissions by 30 per cent by 2020 "there will need to be a step-change in take-up of low-carbon technologies and this will need a new contract between business, government and the consumer".

The report showed that average household spending on ethical food and drink had increased from £81 to £244 over the decade, spending on cosmetics had risen from £7 to £20, and clothing had increased from £21 to £49. Overall, average family spending on ethical goods and services increased from £241 to £735 since 1999, and now one in two UK adults say they have made a purchase primarily on ethical grounds in the past year.

This article first appeared on the Guardian

BusinessGreen.com is part of the Guardian Environment Network