The rapid growth of the market for firms producing environmentally sustainable and ethical products and services was again highlighted this week after a new survey revealed sales of "ethical" goods in the UK were now worth more than retail sales of beer and cigarettes.
The report found that UK ethical consumerism was worth £29.3 billion in 2005 up 11 percent on the previous year, and also accounts for a higher proportion of consumer spending, as overall household expenditure only grew 1.4 percent.
Sales of ethical food such as organic and Fairtrade goods soared 18 per cent to £5.4 billion while expenditure on energy-efficient electrical appliances, green mortgage repayments, home based renewable energy generators and green energy tariffs was up from £3.8 billion to £4.1 billion.
Spending on eco-travel, tourism and transport costs climbed fractionally from £1.7 billion to £1.8 billion, while sales of personal products, such as humane cosmetics and green-fashion, was up 5 per cent to £1.3 billion. Monies in ethical finance, which includes ethical banking and investments, stood at £11.6 billion, up from £10.6 billion last year.
The report proves there is a booming market for green products. However, the Co-operative Bank - which carried out the research in association with research group The Future Foundation and has established itself as one of the leading exponents of ethical banking - argued the market was not moving fast enough to tackle global issues such as climate change and as a result more government intervention was required to encourage more firms to adopt environmentally sustainable practices.
Craig Shannon, executive director of business management, urged governments to act, claiming in a statement that while the ethical market was booming spending was spread over a large number of different products and had only become the norm in sectors where legislators had intervened.
“Where the ethical or eco-choice has become the market leader, for example in sales of A-rated energy fridges (which account for some 60 per cent of the market), this has been underpinned by an EU labelling scheme, inefficient products being removed from sale and the support of well targeted subsidies," he said. “If, as many scientists are saying, we have ten years to make a dent in climate change, it is this type of radical overhaul of the choices made available to people that is going to deliver the rapid market changes required."
“The efforts of far-sighted, highly motivated consumers need to be leveraged and supported with business innovation and government intervention,” he added.
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