Ethical consumerism

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 that time workers were not well-paid, they did not have secure employment with benefit of social protection, working conditions was decent and in this Irish trade union movement focused the ILO policy of campaigning for decent work wherever there is an opportunity for job improvement or job creation.[10]

A number of standards, labels and marks have been introduced for ethical consumers, such as the following:

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,[19] 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).[20][21] 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,[22] although carbon exchanges were intended to still be facilitated.)[23][24]

Over time, some 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".

Ethical Consumer Research Association, the 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.[25]

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", [26] and was followed up by an online debate/discussion hosted by FT.com.[27] 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[28] (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 organisations 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."[29] 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"[30] which provides an online searchable database under the name Corporate Critic[31] or Ethiscore.[32] 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".[33]

Critics argue that the ability to affect structural change is limited to ethical consumerism. Some cite the preponderance of niche markets as the actual effect of ethical consumerism,[36] 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.[37]

One study suggests that "Buying Green" serves as a license for unethical behavior – in their 2009 paper, "Do Green Products Make Us Better People?",[38] Nina Mazar, 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".[39]

• Speth, James Gustave (2008). The Bridge at the End of the World: Capitalism, the Environment, and Crossing from Crisis to Sustainability. Caravan Books.
• Bartley, Tim and colleagues (2015). Looking Behind the Label: Global Industries and the Conscientious Consumer. Indiana University Press.