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UK ethical purchases rise by 18 per cent

January 2002

Consumer spending on ethical goods in the UK rose by almost a fifth in 2000, according to a purchasing index devised by the Co-operative Bank and the New Economics Foundation.

The overall value of sales of products included in the Ethical Purchasing Index grew by 18 per cent from £4.8billion ($6.9bn) in 1999 to £5.7bn in 2000.

This compares with an overall market growth in consumer goods and services of three per cent.

The index is the first attempt in the UK to quantify and measure the amount of money spent each year on goods produced for ethical consumers. The underlying basket of ethical goods and services contains food, fuel and light, housing, household goods, personal items, transport and charitable donations.

Researchers collected sales figures from companies selling products or services specifically marketed as ethical or environment-friendly, such as washing up liquid, fair trade chocolate, free range eggs, liquified petroleum gas, ‘green’ mortgages and energy products, meat alternatives and cosmetics not tested on animals.

The ethical consumer market remains small: ethical purchases had a market share of only 1.6 per cent, although that was up from 1.3 per cent in 1999.

Deborah Doane, head of corporate accountability at the New Economics Foundation, said work to refine the index methodology would continue this year. ‘The index captures a picture of what’s happening with ethical consumerism,’ she said. ‘It shows where consumers are putting their money.’

The index findings indicate that ethical considerations figure most in the purchase of household goods. They accounted for 5.4 per cent of all such purchases in 2000, according to the index.

In other product sectors, ethical purchasing barely registers. Green mortgages represent only 0.01 per cent of the overall mortgage market, and green energy services represent just 0.04 per cent of the overall domestic energy market.

Ethical investment products and banking services , which are not included in the index, account for an additional £7.8bn. Adding in this figure, the researchers conclude that £13.4bn worth of ethical consumer goods and services were sold in 2000, a rise of 19 per cent over 1999.

The index compilers say that recession ‘may knock’ the rate of growth, but claim that it is ‘unlikely the growth trend will be reversed’.


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