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By Edward Lander
Here we provide an up-to-date overview of UK ethical markets using data from our 2022 Ethical Markets Report.
This includes information on the:
- ethical food
- home
- travel & transport
- finance
- personal products, and
- community sectors.
We include key figures on growth, and provide forecasts for the future of ethical spending in the UK based on attitudinal survey data. The 2022 Ethical Markets Report is available along with all previous editions. The research, sponsored by Co-op Food, was conducted during 2022.
Overview of current ethical markets in the UK
Our latest Ethical Markets Report shows that ethical markets grew by almost 35% in 2021, expanding to £141.6 billion. This is the largest jump in the value of the market we’ve seen since we started tracking it in 1999.
The record-breaking growth seen this year was driven by three markets in particular: electric cars, renewable energy tariffs, and ethical investments.
Read on for a breakdown of ethical spending in different market sectors.
Ethical Food & Drink
Overall we recorded a 9.7% growth in the Ethical Food and Drink datasets compared to last year, which represents an increase of almost £1 billion. A substantial element of this was due to exceptional sales of RSPCA Assured certified goods which rose by 29%, or £748 million, year on year.
In line with consumer survey data elsewhere, sales of vegetarian and plant-based alternatives continued to show good growth as expected.
Organic
The organic food and drink market increased by 4.1% to £2.8bn in 2021 from £2.7bn in 2020 and £1.5bn in 2010.
The Soil Association said that the increase was driven by consumer demand for ethical groceries, wider organic choice online and the continued popularity of box scheme sales.
Fair Trade
The market for fair trade products increased by 4.9% to £2bn in 2021 from £1.9bn in 2020.
Total grocery sales fell by 3.8% over the same period. In 2010, fair trade sales totalled £1.1bn. According to GlobeScan 2021 data, 65% of consumers in the UK say they choose fair trade.
Ethical Finance
The ethical finance sector grew by 50.1% to £85.8bn in 2021 from £57.2bn in 2020, driven by rising climate and biodiversity concerns, greater availability of sustainable investment products and a spike in household savings during the pandemic.
Ethical investments accounted for the majority of growth in the sector, driven by the increase in funds investing according to ethical standards. In 2021, the amount held in ethical investment funds soared by 84% to £61.1 billion.
Credit unions grew by 9.5% in 2021, while ethical share issues and ethical banking respectively increased by 7% and 2.3%.
Ethical Home
The green home market fell by 0.2% to £9.619bn in 2021 from £9.636bn in 2020 after a change in an eco-classification reduced the size of the energy efficient appliances market. This was a result of the re-calibration of UK (and EU) energy labels that cut the number of products which received the highest ratings.
Our research showed a 32% increase in household spending on renewable energy tariffs to £4.6bn in 2021 from £3.5bn the previous year. A total of 4.5 million households are now supplied by green energy tariffs, which is 1 million more compared to last year.
Spending on home insulation and heat pump installations increased in 2021 despite the lack of meaningful government incentives to improve home heating efficiency. Sales of heat pumps grew by 184% and we expect the industry to keep on rising as heat pumps become more widely available
Ethical Travel & Transport
There was a seismic shift in the UK’s car market from 2020-2021. Sales of electric and hybrid cars grew by over £6 billion (61%) in a single year to £16.8 billion. Improvements in electric car infrastructure, government grants, and increased availability of models have all contributed to this growth.
However, the UK Government, in its infinite wisdom, announced in June 2022 that it was pulling the plug on its electric car grants. Fortunately, current evidence shows that this does not appear to be slowing the transition much.
Ethical Personal Products & Clothing
The ethical personal products market grew by 1.3% to £1.78bn in 2021 from £1.76bn in 2020, boosted by a 30% increase in Ethical Cotton sales.
After a shift towards online shopping and skin-care products during the pandemic, sales of ethical cosmetics softened in 2021, with sales increasing just 1.2% to £846m from £836m the previous year.
Ethical Community
The Ethical community sector continued to grow in 2021, boosted by a 16.1% increase in charity donations to £8.6bn. Overall community spending increased by 6.7% to £11.8bn from £11.1bn in 2020.
Find out more about ethical shopping
If you are thinking about your food, clothing, household and finance shopping habits and want to look at ethical options, start with our ethical shopping guide.
The shopping guide gives the low down on ethical shopping on a budget, how to shop ethically, articles on how to get started, and what the key issues are in ethical finance and ethical cleaning products, and what makes a company unethical.
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