Ethical consumerism

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Ethical consumerism (alternatively called ethical consumption, ethical purchasing, moral purchasing, ethical sourcing, ethical shopping or green consumerism) is a type of consumer activism that is based on the concept of dollar voting.[1] It is practiced through 'positive buying' in that ethical products are favoured, or 'moral boycott', that is negative purchasing and company-based purchasing.[2]

The term "ethical consumer", now used generically, was first popularised by the UK magazine the Ethical Consumer, first published in 1989.[3] Ethical Consumer magazine's key innovation was to produce 'ratings tables', inspired by the criteria-based approach of the then emerging ethical investment movement. Ethical Consumer's ratings tables awarded companies negative marks (and from 2005 overall scores) across a range of ethical and environmental categories such as 'animal rights', 'human rights' and 'pollution and toxics', empowering consumers to make ethically informed consumption choices and providing campaigners with reliable information on corporate behaviour. Such criteria-based ethical and environmental ratings have subsequently become commonplace both in providing consumer information and in business-to-business corporate social responsibility and sustainability ratings such as those provided by Innovest, Calvert, Domini, IRRC, TIAA-CREF and KLD Analytics. Today, Bloomberg and Reuters even provide "environmental, social and governance" ratings direct to the financial data screens of hundreds of thousands of stock market traders.[4] The not-for-profit Ethical Consumer Research Association continues to publish Ethical Consumer magazine and its associated website, which provides free access to ethical ratings tables. Since the beginning of the nineteenth century, consumption has been one of the most important parts in the life. Consumption is a necessary factor to economic growth because it directly affects the gross domestic product. Despite the other factors in the GDP, which are investment, government spending, and net exports, consumption has the most important effect in the GDP. The gross domestic product of many countries depends on consumption for economic growth; therefore, people are encouraged to contribute the consumerism in these countries. Many people think that consumerism is mostly destructive; however, there are many benefits for rejecting this idea because of a few specific reasons. This paper will highlight the positive aspects of consumerism. Consumerism is an economic aspect that indicates that an increase in consumption of commodities is desirable to the economy. It has been associated with the Western nations but it also affects the rest of the world. The concept was adopted after the industrial revolution where goods could be manufactured in volumes and at a cheaper cost to the masses. Consumerism allows the consumers to choose their lifestyles. This includes choosing the commodities that are necessary and the affordable luxury. It also provides consumers with the opportunity to enjoy the world in their food, entertainment, and drinks in different quantities. It also provides economic advantages to the middle and upper-class segments of the population. It also provides people the motivation and opportunity to improve their social standing through hard work. The lifestyle that is driven by materialism has been identified as one that is burdened by high stress levels and exhaustion. Most people are detached from the society and pose harm to the environment. People should simplify their lives and embrace their responsibility to the environment. They should also be conscientious to their consumption and engage in their community. This can be spread across the various areas of living and scrutinizing the options for purchasing. Most people are identifying that consumerism and materialism are not satisfying. This has seen them casting about for alternative value systems. However, consumerism is not mostly destructive and there are various benefits that arise from rejecting this idea. According to Wanda, the lifestyles that are driven by consumerism are characterized by high levels of stress, exhaustion and detachment (Urbanska, p30). The American people have been directed towards consumption since the great depression. This has influenced consumerism positively and in different sectors. The aggressive consumer spending has seen the gross domestic product increase in the U.S. This is according to statistics on the economy of the U.S. Consumerism is also positive since it is among the biggest contributor to economic growth in the U.S. According to Wanda, the American people have been encouraged to consume over the years. This is according to the statistical data and graphics on the American consumer in 2009 (The American Consumer, p1). There are various negative aspects of consumerism according to Wanda Urbanska. She argues with the fact that it does not influence the financial situation of people positively. She advocates for people to adopt techniques of saving. This includes choosing local banks, and buying used commodities to fix the situation. According to her, people should live in communities for them to improve their financial situation. This establishes the fact that there are various negative effects on consumerism. However, I do not agree with this point of reasoning. Reihan Salam presents both the negative and negative aspects of consumerism. This presents a different perspective on the effect of taxes by the government on consumerism. Increased tax regimes means that people have less to spend thus it reduces their ability to consume. However, high or low taxation does not influence how people perceive of consumerism. I agree with his position since position since he argues on both aspects of consumerism and agrees that consumerism is necessary (Salam, p 22). In conclusion, consumerism has numerous benefits that rules out the argument by most people that it is mostly destructive. The U.S people have been encouraged to embrace consumerism since it is vital in the growth of the economy and in increasing the GDP.






Basis[edit]

Global morality[edit]

An electric wire reel reused as a center table in a Rio de Janeiro decoration fair. When consumers choose and reuse environmentally friendly material like this, they are practicing ethical consumerism.

In "The Global Markets As An Ethical System", John McMurtry argues that no purchasing decision exists that does not itself imply some moral choice, and that there is no purchasing that is not ultimately moral in nature. This mirrors older arguments, especially by the Anabaptists, e.g. Mennonites, Amish, that one must accept all personal moral and spiritual liability of all harms done at any distance in space or time to anyone by one's own choices. It is often suggested that Judeo-Christian scriptures further direct followers towards practising good stewardship of the Earth, under an obligation to a God who is believed to have created the planet for us to share with other creatures. A similar argument presented from a secular humanist point of view is that it is simply better for human beings to acknowledge that the planet supports life only because of a delicate balance of many different factors.

Spending as morality[edit]

Some trust criteria, e.g. creditworthiness or implied warranty, are considered to be part of any purchasing or sourcing decision. However, these terms refer to broader systems of guidance that would, ideally, cause any purchasing decision to disqualify offered products or services based on non-price criteria that affect the moral rather than the functional liabilities of the entire production process. Paul Hawken, a proponent of Natural Capitalism, refers to "comprehensive outcomes" of production services as opposed to the "culminative outcomes" of using the product of such services. Often, moral criteria are part of a much broader shift away from commodity markets towards a deeper service economy where all activities, from growing to harvesting to processing to delivery, are considered part of the value chain and for which consumers are "responsible".

Andrew Wilson, Director of the UK's Ashridge Centre for Business and Society, argues that "Shopping is more important than voting", and others that the disposition of money is the most basic role we play in any system of economics. Some theorists believe that it is the clearest way that we express our actual moral choices, i.e., if we say we care about something but continue to buy from parties that have a high probability of risk of harm or destruction of that thing, we don't really care about it, we are practicing a form of simple hypocrisy.

In an effort by churches to advocate moral and ethical consumerism, many have become involved in the Fair Trade Movement:

  • Ten Thousand Villages is affiliated with the Mennonite Central Committee[5]
  • SERRV[6] is partnered with Catholic Relief Services[7] and Lutheran World Relief[8]
  • Village Markets of Africa sells Fair Trade gifts from the Lutheran Church in Kenya[9][10]
  • Catholic Relief Services has their own Fair Trade mission in CRS Fair Trade[11]

Growing diverse use of the term[edit]

As large corporations have tried to position themselves as moral, principled or ethical organisations, the definition has become wider and means different things to different groups of people. For example, McDonald's started to sell salads, (a more healthy choice) and has a corporate social responsibility blog. Ethical Consumerism can be seen as a movement in marketing, which may or may not reflect actual changes in the practices of businesses. Particular areas of interest for large businesses are environmental impact and the treatment of workers at the bottom of the organisational hierarchy. This change reflects an increasing awareness of ethical issues and corporate identity amongst mainstream consumers.

Standards and labels[edit]

A number of standards and labels have been introduced for ethical consumers, such as the following:

Along with disclosure of ingredients, some mandatory labelling of origins of clothing or food is required in all developed nations. This practice has been extended in some developing nations, e.g., where every item carries the name, phone number and fax number of the factory where it was made so a buyer can inspect its conditions. And, more importantly, to prove that the item was not made by "prison labor", use of which to produce export goods is banned in most developed nations. Such labels have also been used for boycotts, as when the merchandise mark Made in Germany was introduced in 1887.

These labels serve as tokens of some reliable validation process, some instructional capital, much as does a brand name or a nation's flag. They also signal some social capital, or trust, in some community of auditors that must follow those instructions to validate those labels.

Verus Carbon Neutral Sign.JPG

Some companies in the United States, though currently not required to reduce their carbon footprint, are doing so voluntarily by changing their energy use practices, as well as by directly funding (through carbon offsets), businesses that are already sustainable—or are developing or improving green technologies for the future.

In 2009, Atlanta's Virginia-Highland became the first Carbon-Neutral Zone in the United States. Seventeen merchants of Atlanta's Virginia-Highland allowed their carbon footprint to be audited. Now, they are partnered with the Valley Wood Carbon Sequestration Project—thousands of acres of forest in rural Georgia—through the Chicago Climate Exchange.[12][13] The businesses involved in the partnership display the Verus Carbon Neutral seal in each storefront and posted a sign prominently declaring the area's Carbon Neutral status.

Over time, some theorists suggest, the amount of social capital or trust invested in nation-states (or "flags") will continue to decrease, and that placed in corporations (or "brands") will increase. This can only be offset by retrenched national sovereignty to reinforce shared national standards in tax, trade, and tariff laws, and by placing the trust in civil society in such "moral labels". These arguments have been a major focus of the anti-globalization movement, which includes many broader arguments against the amoral nature of markets as such. However, the economic school of Public Choice Theory pioneered by James M. Buchanan has offered counter-arguments based on economic demonstration to this theory of 'amoral markets' versus 'moral governments'.

Areas of concern[edit]

Ethical Consumer, the alternative consumer organisation, collects and categorises information of more than 30.000 companies according to their performance in five main areas, composing the Ethiscore:

  • Environment: Environmental Reporting, Nuclear Power, Climate Change, Pollution & Toxics, Habitats & Resources
  • People: Human Rights, Workers' Rights, Supply Chain Policy, Irresponsible Marketing, Armaments
  • Animals: Animal Testing, Factory Farming, Other Animal Rights
  • Politics: Political Activity, Boycott Call, Genetic Engineering, Anti-Social Finance, Company Ethos
  • Product Sustainability: Organic, Fairtrade, Positive Environmental Features, Other Sustainability.[14]

Research[edit]

GfK NOP, the market research group, has made a five-country study of consumer beliefs about the ethics of large companies. The report was described in a Financial Times article published on February 20, 2007 entitled "Ethical consumption makes mark on branding",[15] and was followed up by an online debate/discussion hosted by FT.com.[16] The countries surveyed were Germany, the USA, Britain, France and Spain. More than half of respondents in Germany and the US believed there is a serious deterioration in standards of corporate practice. Almost half of those surveyed in Britain, France and Spain held similar beliefs.

About a third of respondents told researchers they would pay higher prices for ethical brands though perception of various companies ethical or unethical status varied considerably from country to country.

The most ethically perceived brands were The Co-op (in the UK), Coca Cola (in the US), Danone (in France), Adidas (in Germany) and Nestlé (in Spain). Coca Cola, Danone, Adidas and Nestlé did not appear anywhere in the UK's list of 15 most ethical companies. Nike appeared in the lists of the other four countries but not in the UK's list.

In the UK, the Co-operative Bank has produced an Ethical Consumerism Report[17] (formerly the Ethical Purchasing Index) since 2001. The report measures the market size and growth of a basket of 'ethical' products and services, and valued UK ethical consumerism at GBP36.0 billion (USD54.4 billion) in 2008.

A number of organisations provide research-based evaluations of the behavior of companies around the world, assessing them along ethical dimensions such as human rights, the environment, animal welfare and politics. Green America is a not-for-profit membership organization founded in 1982 that provides the Green American Seal of Approval and produces a "Responsible Shopper" guide to "alert consumers and investors to problems with companies that they may shop with or invest in."[18] The Ethical Consumer Research Association is a not-for-profit workers' co-operative founded in the UK in 1988 to "provide information on the companies behind the brand names and to promote the ethical use of consumer power"[19] which provides an online searchable database under the name Corporate Critic[20] or Ethiscore.[21] The Ethiscore is a weightable numerical rating designed as a quick guide to the ethical status of companies, or brands in a particular area, and is linked to a more detailed ethical assessment. "alonovo" is an online shopping portal that provides similar weightable ethical ratings termed the "Corporate Social Behavior Index".[22]

Related concepts[edit]

Conscientious consumption[edit]

The consumer rationalizes unnecessary and even unwanted consumption by saying that "it's for a good cause".[23] As a result, the consumer buys pink ribbons during National Breast Cancer Awareness Month, green products to support the environment, candy and popcorn from school children, greeting cards and gift wrap from charities, and many other, often unwanted objects. The consumer avoids considering whether the price offered is fair, whether a small cash donation would be more effective with far less work, or even whether selling the item is consistent with the ostensible mission, such as when sports teams sell candy.

Some of these efforts are based on concept brands: the consumer is buying an association with women's health or environmental concerns as much as he is buying a tangible product.[23]

Alternative giving[edit]

Main article: Alternative giving

In response to an increasing demand for ethical consumerism surrounding gift giving occasions, charities have promoted an alternative gift market, in which charitable contributions are made on behalf of the gift "recipient". The "recipient" receives a card explaining the selected gift, while the actual gift item (frequently agricultural supplies or domestic animals) is sent to a family in a poor community.[24]

Criticism[edit]

Critics argue that the ability to affect structural change is limited in ethical consumerism. Some cite the preponderance of niche markets as the actual effect of ethical consumerism,[citation needed] while others argue that information is limited regarding the outcomes of a given purchase, preventing consumers from making informed ethical choices.[citation needed] Critics have also argued that the uneven distribution of wealth prevents consumerism, ethical or otherwise, from fulfilling its democratic potential.[citation needed]

One recent study suggests that "Buying Green" serves as a license for unethical behavior. In their 2009 paper, "Do Green Products Make Us Better People?",[25] the authors state the following:

In line with the halo associated with green consumerism, people act more altruistically after mere exposure to green than conventional products. However, people act less altruistically and are more likely to cheat and steal after purchasing green products as opposed to conventional products. Together, the studies show that consumption is more tightly connected to our social and ethical behaviors in directions and domains other than previously thought.

In a 2010 newspaper article, British environmental writer and activist George Monbiot described green consumerism as "a catastrophic mistake" on the grounds that "it strengthens extrinsic values" (those that "concern status and self-advancement"), thereby "making future campaigns less likely to succeed".[26]

See also[edit]

References[edit]

  1. ^ *Giesler, Markus; Veresiu, Ela (2014). "Creating the Responsible Consumer: Moralistic Governance Regimes and Consumer Subjectivity". Journal of Consumer Research 41 (October): 849–867. doi:10.1086/677842. 
  2. ^ "Why buy ethically". ethical consumer. Retrieved 2007-05-03. 
  3. ^ "20th Birthday!". Ethicalconsumer.org. Retrieved 2013-08-18. 
  4. ^ "Is ESG Data Going Mainstream?". Blogs.hbr.org. Retrieved 2013-08-18. 
  5. ^ "Our History". Ten Thousand Villages. Retrieved 2013-08-18. 
  6. ^ "Our Story". SERRV. Retrieved 2013-08-18. 
  7. ^ "Catholic Relief Services". Crs.org. Retrieved 2013-08-18. 
  8. ^ "Home - Lutheran World Relief | Working to end poverty, injustice and human suffering". Lwr.org. Retrieved 2013-08-18. 
  9. ^ "About Village Markets and Fair Trade". Villagemarkets.org. Retrieved 2013-08-18. 
  10. ^ "'God's love is what they pass on' : Fair trade is a mission for a Wittenberg University grad, students and faculty". The Lutheran. 2012-03-29. Retrieved 2013-08-18. 
  11. ^ [1][dead link]
  12. ^ Jay, Kate (November 14, 2008). "First Carbon Neutral Zone Created in the United States". Reuters. 
  13. ^ Auchmutey, Jim (January 26, 2009). "Trying on carbon-neutral trend". Atlanta Journal-Constitution (The Atlanta Journal-Constitution). 
  14. ^ Rob Gray, Dave Owen and Carol Adams, "Accounting and accountability : changes and challenges in corporate social and environmental reporting"
  15. ^ Grande, Carlos (2007-02-20). "Ethical consumption makes mark on branding". FT.com. Retrieved 2011-12-18. 
  16. ^ "entitled 'Ethical consumption makes mark on branding'". Financial Times. Retrieved 2007-05-03. 
  17. ^ "Ethical Consumerism Report". Co-operative Bank. Retrieved 2010-09-03. 
  18. ^ "Coop American: Responsible Shopping: About". Coopamerica.org. Retrieved 2011-12-18. 
  19. ^ "Ethical Consumer Research Association: About". Corporatecritic.org. Retrieved 2011-12-18. 
  20. ^ "Research & Ratings: About the Ethiscore". Corporate Critic. Retrieved 2011-12-18. 
  21. ^ "Research and ratings". Ethiscore. Retrieved 2011-12-18. 
  22. ^ Aalonovo Corporate Social Behavior Index[dead link]
  23. ^ a b Gayle A. Sulik (2010). Pink Ribbon Blues: How Breast Cancer Culture Undermines Women's Health. USA: Oxford University Press. pp. 111–132. ISBN 0-19-974045-3. OCLC 535493589. 
  24. ^ "Giving well is hard to do: so here's my seasonal guide". London: The Guardian. 2005-12-22. Retrieved 2007-05-03. 
  25. ^ Do Green Products Make Us Better People? (Psychological Science, April, 2010) Nina Mazar, Chen-Bo Zhong
  26. ^ Monbiot, George (12 October 2010). "It goes against our nature; but the left has to start asserting its own values". The Guardian. Retrieved 29 December 2010. 

Further reading[edit]

  • Speth, James Gustave (2008). The Bridge at the End of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability. Caravan Books.