Ethical spend tops £35bn

The report, which acts as a barometer of ethical spending in the UK, shows that — despite the first tremors of the downturn being felt towards the end of last year — the overall ethical market in the UK was worth £35.5 billion in 2007, up 15 per cent from £31bn in the previous 12 months.

In particular, the Bank cites the impact of green legislation and choice editing as key factors that will continue to drive sales in a number of product areas.

Dick Parkhouse, Managing Director Retail at the Co-operative Bank, said: “For some time now we have argued that only through legislation will we secure the necessary changes to deliver mass market, low carbon lifestyles.

“Government intervention, which promotes energy efficient products such as boilers, white goods and more recently light bulbs, is underpinning these markets ensuring that they continue to grow.

“Of course, the state of the economy will impact on consumer spending, but this report shows that bold Government action can stimulate markets, save consumers’ money and protect the environment.”

The report shows that last year, on average, every household in the UK spent £707 in line with their ethical values — up from £630 in 2006. However, overall ethical spend at £35.5bn is still a small proportion of the total annual consumer spend of more than £600bn.

Spending on ethical food and drink, which includes organic products, Fairtrade goods and free-range eggs, was up 14 per cent from £5.1bn to £5.8bn. Green home expenditure, which incorporates energy-efficient electrical appliances, green mortgage repayments, small renewables (such as micro-wind turbines) and green energy was up 13 per cent from £5.9bn to £6.7bn.

Eco-travel and transport costs including environmentally friendly transport, responsible tour operators, public transport and sales of green cars, was all but flat at £1.6bn.

Spending on personal products, such as humane cosmetics and eco-fashion, (e.g. Fairtrade cotton) was up four per cent to £1.4bn. Monies in ethical finance, which includes ethical banking and investments, was up 15 per cent to stand at £15.6bn, up from £13.3bn last year.

• The Bank has also revealed that its retail savings balances have grown by 40 per cent over 12 months as consumers look for a safe place to put their money.

Figures for 12 months to October 31 show that the amount held by the Co-op Bank in deposits made by personal customers increased from £2.7bn to £3.8bn and Mr Parkhouse commented: “This huge growth is not simply down to offering good rates. It confirms that trust has become a major influence when consumers come to look for a safe place for their savings.

“The strength of our balance sheet and the responsible approach we’ve historically taken in managing our customers’ finances is helping to build consumer confidence in our brand during these uncertain times.”