A regular feature, inviting key individuals to comment on an aspect of scenario planning. Dr Ian Yeoman Scenario Planning Manager at VisitScotland looks to ethical consumption and the consumer.

Please note all Viewpoint...articles are not policies of VisitScotland but individual opinions of the authors. The material should not be regarded as specific advice and no action should be taken with reliance on it. Neither the authors nor VisitScotland accepts any liability whatsoever for any loss or damage in any way of reliance placed upon the material.

Kermit once said it wasn’t easy being green. The trends and tensions of ethical consumption

One of the dilemmas in writing about ethical consumption is that there is not a widely accepted definition.  However, according to the Co-operative Bank it is estimated to be worth £2.1 billion to the Scottish economy.  The Co-operative’s annual Ethical Consumer Report has reflected a buoyant mood and the measurable growth of ethical consumption. The report shows a 15.4% year on year growth in all ethical consumption whether this is £15m for humane cosmetics or £61m for sustainable timber. However as Kermit points out, being green is not easy, yes there are trends that are driving the growth of ethical consumption but at the same time there tensions and barriers which make it difficult.

Trends Shaping Ethical Consumption

The growth of ethical consumption has been impressive. Its growth has been encouraged by numerous strong forces in modern society. So what are the factors that have driven this growth?  Undoubtedly one is the growing concern over issues around the environment and human rights.  Local communities have contributed significantly to the growth of ethical shopping over the last five years.   It is the state of the global environment which provokes the greatest levels of concern, whether it is the worsening environment or the presence of poverty in the third world.  Ethical shopping is a feature of wealthy societies, basically as people become richer their basic needs occupy a smaller proportion of their income, they are thereby more able to use the remainder of their income to express their identity and concerns in what they buy.

Counter to the common perception, it is not younger consumers who are most excited by the issues of ethics, especially the environment – it is the impact of parenthood and our concern for the future of our children.  Combined with an aging population the awareness of ethical consumption will only grow.  

In modern society consumers, place greater emphasis on experience rather than on the possession of tangible goods.  The wish to gain social capital has been another factor for growth in these markets.  Basically, ethical goods offer an emotional pay off for the consumer, a feel-good-factor whether it is Oxfam’s goats or American Express Red Cards.

Celebrity events such as the Live8 concert have also contributed to the trendiness of ethical consumption in a very modern way.  These events have effectively constructed an ethical brand-image, designed for ostentatious display: conspicuous compassion. Displaying the brand of ethics signifies the consumer’s lifestyle and gives them membership of the ethical group.  Live8 and Make Poverty History offered consumers an experience, an ethical lifestyle above all else, to be part of something: interacting with great forces - a part of history.

The presence of strong branded offerings has facilitated the strong growth in ethical consumption in the decade.  In 2006, the number of Fairtrade products available was over 1300, up from 3 in 1994.  According to the Office of National Statistics (ONS) the number of organic processors and importers in the UK continues to rise and is currently at a high: other sources suggest that organic food sales in Scotland have doubled since 2000 and are now worth £100m a year.

The benefits of ethical products have been conflated with healthy products.  The explicit claims of some goods have sunk in to the consumer psyche.  The issue of health has gripped the nation of late: food scares, health fads and rising obesity - this increased obsession has helped to raise the profile of ethical goods as a healthier alternative.

Barriers and Tensions

While many trends have encouraged the growth of ethical consumption in recent years, there are some trends which have a negative or at least limiting influence. Ethical shopping is fashionable and is encouraged by the current dynamics of demographic change.   Consumers who are most sceptical about the ethics of business are also most likely to be the people who say they buy products from unethical companies.  In essence, raising awareness doesn’t stop people buying ‘unethical’ products it just makes them more aware that they are doing so.  What I am saying is ethical consumption can also be fickle.
One of the reasons that ethical consumption has attracted so much attention is that businesses have viewed it as a way to make more money.  In a culture of extreme price sensitivity and growing resistance to marketing, the news that consumers will voluntarily pay a premium on ethical goods is very welcome.  However, it is also true that rising ethical consumption has gone hand in hand with the rising demonization of business.  Consumers no longer trust businesses as much and the search for ethical goods is implicitly founded upon the belief that other goods are unethical.  In some ways ethical consumption is a threat to businesses, especially big businesses as ethical consumption favours the local, small or quirky businesses over the products of large corporations.

Scotland has a low price culture.  Although surveys regularly report consumers’ willingness to pay price premiums on ethical goods, the magnitude of this willingness often fails to materialise into people actually paying more for the products.  The biggest successes in ethical consumption have been products which are either marginally more expensive (such as fairtrade groceries) or the same price as the standard offerings (such as many of the green energy packages which are available).

For the shopper not sufficiently motivated to seek out the ethical option (or to travel to a shop which stocks ethical products) converting good intentions into action will remain difficult.  With a majority of people feeling time-pressured (especially in the key ethical demographics) it continues to be the case that only a minority of potential ethical consumers go out of their way to shop ethically.

A further limiting factor on ethical consumption is that in many cases it is not the easy or glamorous option.  Sometimes, consumers’ ethics can clash with the have-it-all lifestyles we enjoy, especially in the wealthy groups most influenced by the debate. Ethical consumption isn’t always a charity wristband; sometimes it asks uncomfortable questions, should you buy the products of this manufacturer? Should you be a part of this market at all?  This is difficult to consumers used to having-it-all. As such, it limits the success of ethical products.   For instance, lately there has been a great deal of negative press around the environmental responsibility of air travel. However, modern consumers expect to be able to take at least one foreign holiday a year.  As these two trends clash, the ethical consumer must judge whether they should take only short-haul holidays or indeed whether foreign travel is at all compatible with their ethics.  Today, the Institute of Public Policy is calling for all airline tickets to carry an environmental health hazard warning like cigarettes.  Jim Murphy of Model Reasoning terms this ‘tourism - the new smoking’, envisaging a campaign to stop people going on holiday!

Therefore…….

Ethical consumption has grown quickly in recent years.  The issues have gained more prominence in Scotland’s cultural life, and growing wealth and age has created a beneficial consumer environment for the ethical impulse. The development of goods has effectively commoditised and branded social concerns into products which make ethical consumption larger than ever.  Moral concerns will become more prominent in the economy. In particular, the belief that an urgent response is needed on the issue of climate change means that new laws will be enacted to force people to change the way they live and the things they buy.  All of the major political parties now support rebalancing the tax system to limit carbon emissions.  There are few if any businesses that will not be touched by this.  Ethical consumption and the eco consumer is no longer a niche market - it is becoming very main stream and can only grow. In the future life for Kermit will be easier, however it all depends on Miss Piggy!

Dr Ian Yeoman is VisitScotland’s crystal ball gazer who was recently described by the Sunday Times as Scotland’s leading contemporary futurologist.