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«Policy Series 12 ETHICAL CONSUMERS AND ETHICAL TRADE: A REVIEW OF CURRENT LITERATURE Anne Tallontire, Erdenechimeg Rentsendorj and Mick Blowfield ...»

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POLICY SERIES

Policy Series 12

ETHICAL CONSUMERS AND

ETHICAL TRADE:

A REVIEW OF CURRENT

LITERATURE

Anne Tallontire, Erdenechimeg Rentsendorj and

Mick Blowfield

(Social and Economic Development Department, NRI)

Natural Resources Institute University of Greenwich a The University of Greenwich 2001 The Natural Resources Institute (NRI) of the University of Greenwich is an internationally recognized centre of expertise in research and consultancy in the environment and natural resources sector. The Institute carries out research and development and training to promote efficient management and use of renewable natural resources in support of sustainable livelihoods.

Short extracts of this publication may be reproduced in any nonadvertising, non-profit-making context provided that the source is

acknowledged as follows:

TALLONTIRE, Anne, RENTSENDORJ, Erdenechimeg and BLOWFIELD, Mick (2001) Ethical Consumers and Ethical Trade: A Review of Current Literature. Policy Series 12. Chatham, UK: Natural Resources Institute.

Permission for commercial reproduction should be sought from the Managing Editor, Natural Resources Institute, University of Greenwich, Central Avenue, Chatham Maritime, Kent ME4 4TB, United Kingdom.

Production of this publication was funded by the United Kingdom’s Department for International Development. However, the Department for International Development can accept no responsibility for any information provided or views expressed.

Price £5.00 Copies of this book can be obtained by writing to NRI Catalogue Services, CAB International, Wallingford, Oxon OX10 8DE, UK.

When ordering, please quote EP12.

Natural Resources Institute ISBN: 0 85954 527 X University of Greenwich, a registered charity and company limited by guarantee, registered in England (Reg.

No. 986729). Registered Office: 30 Park Row, Greenwich, London SE10 9LS.

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CONTENTS

Preface iv Executive summary 1 1 Introduction 3 2 Ethical consumption 6 Definitions of ethical consumers 6 The incidence of ethical consumption 8 Negative ethical purchase behaviour 10 Positive ethical purchase behaviour 12 3 Ethical consumers 15 Categories of ethical consumer 15 Socio-economic profile 16 The difference between

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iii

PREFACE

This series is principally concerned with current policy issues of importance to developing countries but also covers those relevant to countries in transition. The focus is upon policies which affect the management of natural resources in support of sustainable livelilhoods.

Much of the series will be devoted to concerns affecting the livelihoods of poor people in rural areas, recognizing the linkages with non-natural resource-based livelihoods. It will also include the interests of the urban poor, where these are linked to the use of natural resources as part of livelihood strategies.

The series will take a holistic view and cover both the economic and social components affecting livelihoods, and associated factors notably with respect to health and education. The aim is to provide topical analyses which are based upon field research where appropriate, and which will inform development practitioners concerned with issues of poverty in development.

The series is timely, given the increasing focus upon poverty and poverty elimination in the agenda of the development community. It is also timely with respect to the growing body of recent work which seeks to replace earlier, simplistic structural adjustment programmes, with more flexible approaches to livelihoods, institutions and partnerships.

Policy analysis is often assumed to be the remit of social scientists alone.

Whilst it is recognized that social science may play a pivotal role, interactions with other disciplines may also be critical in understanding and analysing policy issues of importance to the poor. The series therefore draws upon a wide range of social and natural scientific disciplines reflecting the resource base at the Natural Resources Institute.

iv

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understand the complexity of consumer decision-making and the contexts in which these decisions are made.

The publication reveals that ethical consumerism is a complex phenomenon, something that those calling for greater consumer awareness of ethical issues need to understand when promoting different forms of ethical trade. The fair-trade and organic movements have been at the forefront of understanding this phenomenon, and their experiences offer lessons for the commercial mainstream, particularly the importance of information and awareness as a prerequisite for action. These lessons are also crucial for international development agencies that need to understand the operation of Northern markets if their investment in ethical approaches to trade in developing countries is to pay dividends.

The paper is one of a series of publications which form part of the output of work by the Natural Resources and Ethical Trade Programme (NRET) managed by the Natural Resources Institute (NRI). NRET works with mainstream and alternative business, government and civil society organizations to develop and promote approaches to trade that benefit poor people in developing countries. This publication draws on surveys and questionnaires by a variety of organizations, and on NRET’s own experience funded through the UK Department for International Development (DFID) Forest and Crop Post-Harvest Research Programmes.





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in business practice. However, relatively little is known empirically about the ethical consumer. Surveys suggest that people apply certain values when they are shopping, but there appears to be some disparity between what people say to the person conducting the questionnaire and their actual purchases. Moreover, there is little information about what makes ethical consumers behave as they do. What makes them aware of ethical issues and what motivates them to alter their consumption patterns to reflect their values? This publication discusses current knowledge on ethical consumers and identifies research that may be useful in understanding ethical behaviour in consumption. Greater understanding of how consumers become aware of ethical issues in trade and the way in which they translate this into ethical purchase behaviour is critical for developing strategies for raising the awareness of consumers in general.

The publication begins by exploring theories of ethical consumption.

Available data on ethical consumers are then summarized, focusing particularly on typologies of consumers that have been developed. Much data tends to be quantitative and based on quantitative market research questionnaires. The limitations of such data collection are discussed and the merit of qualitative research is then explored.1 The role that responsible business can play in achieving public policy objectives and the potential opportunities for developing country producers are increasingly recognized. The implications of ethical consumption patterns for developing country producers and government support to responsible business are considered at the end of the publication.

Definitions used in studies of ethical consumerism vary from the very vague (‘ethical’ is defined by the consumer) to the specific (the questioner is only concerned about certain categories of good, for example, fair-trade goods or organic foods). Some earlier studies concentrate on environmental values, the ‘green consumer’, and thus omit ethical issues that have come to the fore in recent years such as child labour or wider social issues. ‘Out of This World’ 2 identifies five areas of concern: healthy eating (with an emphasis on organic produce); community development (supporting local suppliers); fair-trade (a better deal for developing country Material for this review originates from a variety of sources, including correspondence through e-mail and letter with key individuals and organizations with an interest in ethical consumption, internet searches and the examination of grey and commercial literature (i.e. opinion polls and surveys undertaken by/for companies with a view to development of ethical product lines or brands).

A nascent chain of ethical grocery shops.

suppliers); animal welfare; and environmental sustainability. The company notes that there are areas of potential conflict: locally produced goods with low transport impact compared to vegetables produced organically or according to a code of conduct in a developing country.

This publication uses a wide definition of ‘ethical consumer’ based on the Natural Resources and Ethical Trade Programme (NRET) definition of the scope of ethical trade. NRET defines ethical trade as any form of trade that consciously seeks to be socially and environmentally, as well as economically, responsible. Ethical consumers would, therefore, seek to purchase or use goods and services that can demonstrate social and/or environmental responsibility. In the natural resources sector, ethical trade includes fair-trade, trade in organic products, trade in products from sustainably managed resources such as forests, and ethical sourcing of fresh and processed produce following ethical codes of conduct.3 The paper is concerned primarily with consumption of renewable natural resources, so there is little reference to electrical products, vehicles, clothing, toiletries, etc., which may be purchased according to ethical principles.

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For some authors, consumerism is a tool for social change (e.g. Adams, 1989; Ekins 1989). However, as Smith (1990) notes, corporate accountability may be considered too

Abstract

a concept to capture the attention of the majority of the public. In contrast, it can be relatively easy to articulate dissatisfaction with the goods one purchases. Smith talks about ‘‘ethical purchase behaviour’’ mostly in the negative sense of boycotting certain products. However, there is increasing opportunity for positive ethical purchase behaviour, i.e. purchase of goods with ethical attributes (see below). Some authors discuss ethical consumerism in a wider sense of ‘‘consumer action’’, i.e. activities other than purchasing, such as dialogue with retailers and manufacturers or lobbying of government.4 For example, Bendell (1998) suggests that ethical consumerism has a ‘‘citizen’’ as well as consumerist element. Figure 1 illustrates these distinctions.

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Figure 1 Three types of ethical consumerism Ethical consumerism may be seen as an evolution from earlier consumerism movements. Lang and Hines (1993) identify three waves of consumerism. The first wave of the consumer movement focuses on value for money, basic product information and labelling (what the product does and how) and consumer choice. The second wave was heralded by investigations into product safety and has been associated with broader questions of corporate accountability.5 The third wave is described as ‘‘a

marriage of environmentalism and citizenship.’’ Lang and Hines (1993:



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