Do people shop ethically when times are hard?

In the wake of the violence which has displaced millions in Ukraine, many countries have announced strict sanctions on Russia. Those who have imposed sanctions, could face slow growth while oil and commodity prices are soaring, causing a spike in the cost of living.

In the UK, some experts fear that inflation will reach 8.2 percent.

These pressures raise questions about how we spend. Usually, shoppers are willing to part with more cash for ethical products – but do people still shop with their consciences when times are rough?

Covid-19 led to a wide-scale reappraisal of our impact on the planet. A poll of eight countries by Boston Consulting Group found that 70% of respondents said they were “more aware now than before Covid-19 that human activity threatens the climate and that degradation of the environment, in turn, threatens humans”.

This mind shift has laid the foundation for a scenario where every sector is pivoting to cater to morally-minded customers.

For instance, the Ethical Consumer Markets Report – produced by Co-op – has been charting this movement since 2010. The report showed a 24% increase in spending on ethical products between 2019 to 2020, with this consumer market now worth £122bn. Will researchers find ethical spending in recession in 2020 – 2021?

It’s possible, but unlikely. While people might trade down to cheaper products in hard times, evidence shows that they are less likely to opt for brands with dubious practices. Consider the rise of kitemarks that signify company good practices such as the B Corporation movement. The movement certifies businesses which meet high standards on factors ranging from employee benefits to supply chain practices and input materials.There are 640 accredited ones in the UK, spanning 55 industries and it is taken very seriously by consumers.

While ethical shopping is a major trend in progress, some sectors have been less willing to reduce damaging practices. Among the most reviled is the fashion industry. Key players in this market tout the importance of sustainable practices here, and yet fast fashion is still growing. A forecast by Research and Markets anticipates that this corner of the industry will rocket to $163.4 bn over the next five years. Meanwhile, FMCG brands have been criticised for implementing projects to save the planet, while doing little to reduce their reliance on single use plastics and harmful chemicals.

As the economic fallout from the Ukraine crisis unfolds, consumers will find themselves having to tighten their belts. But while people will be looking for ways to economise, few will be willing to compromise on their morals to save a few quid.

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