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Ethical consumerism (alternatively called ethical consumption, ethical purchasing, moral purchasing, ethical sourcing, or ethical shopping and also associated with sustainable and green consumerism) is a type of consumer activism based on the concept of dollar voting. It is practiced through the buying of ethically made products that support small-scale manufacturers or local artisans and protect animals and the environment while boycotting products that exploit children as workers, are tested on animals, or damage the environment.
The term "ethical consumer", now used generically, was first popularised by the UK magazine Ethical Consumer, first published in 1989. 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 overall scores starting in 2005) 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 Foundation, Domini, IRRC, TIAA–CREF, and KLD Analytics. Today, Bloomberg and Reuters provide "environmental, social and governance" ratings directly to the financial data screens of hundreds of thousands of stock market traders. The nonprofit Ethical Consumer Research Association continues to publish Ethical Consumer and its associated website, which provides free access to ethical rating tables.
Although single-source ethical consumerism guides such as Ethical Consumer, Shop Ethical, and the Good Shopping Guide have proven to be popular, they suffer from the drawback of incomplete coverage. User-generated ethical reviews are more likely, long-term, to provide democratic, in-depth coverage of a wider range of products and businesses. The Green Stars Project promotes the idea of including ethical ratings (on a scale of 1-5 green stars) alongside conventional ratings on retail sites such as Amazon or review sites such as Yelp.
The term "political consumerism", first used in a study titled "The Gender Gap Reversed: Political Consumerism as a Women-Friendly Form of Civic and Political Engagement" from authors Dietlind Stolle and Michele Micheletti, is identical to the idea of ethical consumerism; however, in this study, the authors found that political consumerism is a form of social participation that often went overlooked at the time of writing and needs to be accounted for in future studies of social participation.
In the late 19th and early 20th centuries, people began to have formal consumer movements to ensure that people will get value for their money for the things they purchased in industrialised countries. These kinds of movements focused on the unfair labor practices of the companies, labelling requirements of food, cosmetics, drugs, etc. Examples of the consumer movements were Consumer League which was established in New York, USA in 1891, National Consumers League created in USA in 1898, Consumers Council which was established during World War I in Great Britain. During this time workers were neither well-paid nor did they have secure employment with benefit of social protection; similarly, working conditions were decent and the Irish Trade Union movement focused the ILO policy of campaigning for decent work wherever there was an opportunity for job improvement or job creation.
In Unequal Freedoms: The Global Market As An Ethical System (1998), 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
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 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 practising 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
- SERRV International is partnered with Catholic Relief Services and Lutheran World Relief
- Village Markets of Africa sells Fair Trade gifts from the Lutheran Church in Kenya
- Catholic Relief Services has their own Fair Trade mission in CRS Fair Trade
Standards and labels
A number of standards, labels and marks have been introduced for ethical consumers, such as the following:
- B corporation
- Co-op Marque
- Dolphin safe
- EKOenergy for electricity agreements
- Equal Exchange
- Ethical Consumer Best Buy label
- Free-range poultry
- FSC-certified sustainably sourced wood
- Grass fed beef
- Green America Seal of Approval
- Halal (religious standard)
- Kosher (religious standard)
- Local food
- MSC-certified sustainably sourced seafood
- No Pork No Lard (semi-religious standard)
- Organic food
- Organic Trade Association
- Product Red
- Rainforest Alliance certified
- Respects Your Freedom
- Shade-grown coffee
- Social Accountability 8000
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.
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 neighborhood became the first Carbon-Neutral Zone in the United States. Seventeen merchants in 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 (CCX). The businesses involved in the partnership display the Verus Carbon Neutral seal in each store front and posted a sign prominently declaring the area's Carbon Neutral status. (CCX ceased trading carbon credits at the end of 2010 due to inactivity in the U.S. carbon markets, although carbon exchanges were intended to still be facilitated.)
Over time, some[who?] 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 an economic demonstration to this theory of "amoral markets" versus "moral governments".
Areas of concern
Ethical Consumer Research Association, an 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.
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",[dead link] and was followed up by an online debate/discussion hosted by FT.com. The countries surveyed were Germany, the United States, 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 the 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 (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, and GBP47.2 billion (USD72.5 billion) in 2012.
A number of organizations 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." 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" which provides an online searchable database under the name Corporate Critic or Ethiscore. 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".
Conscientious consumerism is when people make a habit of buying goods from ethical companies and avoid impulsive buying from unethical ones, in order to contribute positively to today's political, social, and environmental world. The consumer rationalizes unnecessary and even unwanted consumption by saying that "it's for a good cause". 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.
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.
Critics argue that the ability to effect structural change is limited with ethical consumerism. Some cite the preponderance of niche markets as the actual effect of ethical consumerism, while others argue that information is limited regarding the outcomes of a given purchase, preventing consumers from making informed ethical choices. Critics have also argued that the uneven distribution of wealth prevents consumerism, ethical or otherwise, from fulfilling its democratic potential.
One study suggests that "Buying Green" serves as a license for unethical behavior – in their 2009 paper, "Do Green Products Make Us Better People?", Nina Mazar and Chen-Bo Zhong 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 The Guardian article, British environmental writer and activist George Monbiot argued that green consumers who do not articulate their values are part of "a catastrophic mistake" on the grounds that such consumerism "strengthens extrinsic values" (those that "concern status and self-advancement"), thereby "making future campaigns less likely to succeed".
James G Carrier, Associate at the Max Planck Institute for Social Anthropology, draws upon Karl Marx’s concept of commodity fetishism to argue that ethical consumption does not help consumers lead a more moral life or influence businesses as intended. The goal of ethical consumption at a personal level is to lead a more moral life, and that capitalism causes commodities to be presented in such a way that they are perceived without regard for the labor that is represented by the product, the labor that was involved in allowing that commodity to exist. The goal at a public level is for consumers to use their purchasing power to put pressure on companies to change the way they conduct business. Marx argued that under capitalism, the presentation of goods obscures the people and processes behind their production.
Carrier begins by giving examples of products that have been presented in a way that misrepresents their context. He first points to the images of growers commonly found on fair trade coffee packaging. The image suggests self-reliance and ignores the dependence upon immigrant wage workers who harvest the coffee. Fairtrade coffee is viewed as a direct link to the grower without a middle man. However, there are many parties involved such as the roasters, shippers, wholesalers, and retailers of the product. Also discussed by Carrier are fictitious commodities which are things that are not produced in the conventional sense, material or not, and can be appropriated for commercial gain. The conceptual categories of ethicality need to be legible to consumers in order for a consumer to be able to participate in ethical consumption. Sellers use imagery to satisfy that need, and the images they use become emblematic and representational of the values of ethical consumers, and in some ways the presentation of these images fetishize the product, and the pervasiveness of such images begins to shape ethicality, as the absence of these images also signifies the absence of those same values. The overarching idea is that it’s difficult to buy ethical products because there are many aspects to commodities that the audience is unable to be fully aware of; that fully informed decisions are almost impossible to make. Consumers see the images that sellers use as a means of virtue signaling, and purchase those products with the intent of ethical consumption because they believe that those images have been produced conscientiously to represent conceptual categories of “ethical.” 
Carrier extends commodity fetishism to include nature reserves because they are advertised and people are urged to visit the landscapes and animals for a fee. For example, parks in Jamaica show colorful fish and coral growth on pamphlets to attract tourists. These photos fetishize coastal waters by ignoring the other important ecological aspects of the water. In Montego Bay, Jamaica, environmentalists argue that tourism has damaged the park. Run-off feeds into the waterways and sea-grass beds integral to local nutrient cycles are removed. 
The strategic direction of the consumer’s attention further mystifies and fetishizes the object of consumption. Carrier points out that the moment of consumer choice is emphasized rather than the context that leads people to seek ethicality. He believes that more attention should be paid to how the consumer acquired their moral leanings.
- Carrying capacity
- Cause marketing
- Critical consumerism
- Cultured meat
- Double-duty dollar
- Ethical banking
- Ethical eating
- Ethical investing
- FIRE movement
- Green brands
- Intentional living
- Leon Sullivan § Selective Patronage Movement
- Organic food culture
- Socially responsible investing
- Sustainable living
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