Ethical boycotts work, says bank

BOYCOTTS by ethically motivated consumers are costing big brands &#163 2.6 billion a year according to the annual Ethical Purchasing Index (EPI) published this week by the Co-operative...

BOYCOTTS by ethically motivated consumers are costing big brands &#163 2.6 billion a year according to the annual Ethical Purchasing Index (EPI) published this week by the Co-operative Bank.
According to the EPI, consumers are deliberately avoiding products from companies that they believe act wrongly.
The research shows that in 2002 the total value of ethical consumption in the UK was &#163 19.9 billion. Within this the EPI recorded sales of ethically marketed goods and services of &#163 6.9 billion, a 13 per cent increase on 2001. The UK economy grew by just 1.7 per cent last year.
To analyse the intent behind consumer actions, the bank invited 400 shoppers to join an ethical panel which scrutinised their purchasing habits. It revealed a further &#163 5.6 billion of "ethical invisibles" being spent in line with consumers&#039 values and principles. These "invisible" activities include big brand boycotts and shopping locally.
The total value of ethical banking increased to &#163 3.9 billion, a rise of 16 per cent. The value of ethical investments fell back to &#163 3.5 billion, a contraction of eight per cent against a market decline of 17 per cent.
Simon Williams, the bank&#039s Director of Corporate Affairs, said: "The full extent of ethical consumerism will always be difficult to gauge, given that it is about the motivation behind a particular purchase as much as the product or service itself.
"This new in-depth research enables us to drill down and look at people&#039s motivations and we have discovered that many consumers are driven by ethical concerns.
"For instance, many people shop locally for convenience but for others the overriding consideration in doing so is to buy from local stores to support their community."
The Co-operative Bank produces the index in partnership with the New Economics Foundation and the Future Foundation.
There are some ethical products that are now close to being the product of consumer choice in their respective sectors. In particular energy efficient household appliances now account for 41 per cent market share while free range eggs account for 40 per cent of retail egg sales.
In contrast, the total market share for ethical goods and services is still less than two per cent. For example, while animal testing of cosmetics in the UK may be banned and more than eight out of ten consumers oppose it, sales of cosmetic products which comply with the Humane Cosmetics Standard have yet to achieve two per cent market share.

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