Being more aware of what goes on behind the scenes when it comes to buying the products and services we need is more than a trend—it’s a growing movement called ethical consumerism. What exactly is ethical consumerism? In a nutshell, it’s the mindful purchase of goods and services that are sourced, produced and distributed in a socially and environmentally responsible way. It’s a form of political activism where the shopper votes with their wallet. A consumer-driven movement, ethical consumption is changing the way we do business.
As consumers become more educated about the environmental and social impact of their purchases, they’re often moving toward more sustainable options. Ethical consumption demands more from consumers and businesses, with long-term effects that include increased supply chain transparency and sustainable practices. Let’s dive deeper into the concept and how it’s shaping business trends.
What Is Ethical Consumerism?
Ethical consumerism—also known by terms such as conscious consumerism,and values-based purchasing—recognizes that where consumers spend money matters. By choosing products from companies that align with their values, consumers are creating a shift toward sustainable, cruelty-free products and fair-trade practices.
Ethical consumerism’s core principles include:
- Reducing waste and supporting ecological balance by choosing sustainably produced goods.
- Supporting goods crafted using fair trade principles in safe working environments with fair wages and no exploitation.
- Expecting transparent, honest communication from companies regarding sourcing, production and labor practices.
- Supporting local and small businesses to strengthen communities and reduce ecological impact.
- Making conscious consumption choices by buying less, choosing quality over quantity and avoiding unnecessary purchases.
- Supporting social justice principles through brands that align with human rights and community empowerment.
- Avoiding products tested on animals and favoring cruelty-free options.
These examples of ethical consumerism illustrate how people can use their purchasing power to make a difference. The ideas behind conscious consumerism have existed for generations, taking form in political movements like the free produce movement in the early 1800s and the fair-trade movement that began after World War II. These movements encouraged people to buy products made without causing harm to workers and paid fair wages for their work—and have gathered steam over the years.
Although the ethical consumerism movement has gained steadily, the COVID-19 pandemic forced many people to reexamine their priorities and gave it a boost. According to research published in the Journal of Business Ethics, “perceived pandemic severity increases consumers’ intention to consume ethically.” Suddenly faced with more time at home than ever before, many used the time to research the companies they support—shifting away from businesses with less-than-stellar ethics. Instead, consumers began looking for more socially and environmentally friendly companies that freely shared information about how they do business.
How Ethical Consumerism Is Shaping Business Trends
As values-based consumerism changes how people shop, it also shapes business trends. Consumers can access more information than ever, making it relatively easy for shoppers to learn about companies and their business practices.
For example, some consumers choose not to buy beauty products from companies that test on animals. Instead, they may seek local sources for handmade products like soaps and lotions. Ethical consumerism statistics support this, as roughly 55% of people are willing to pay more for eco-friendly brands.
It adds up to consumers holding corporations responsible for the environmental and social impact of their business practices.
Transparency and Corporate Responsibility
At the heart of conscious consumerism are transparency and corporate responsibility. Conscious consumers want brands to be open about how their products are created and the impact they have on the people and the environment.
In 2024, about 64% of people spent money with socially responsible businesses, and 32% planned to spend more in the future, according to a report by Good.Must.Grow.. While the annual statistics fluctuate, there is a general trend toward sustainability and eco-friendly goods—even if it costs more. Because of this, companies are choosing to share their sourcing, labor practices and environmental policies.
Some, like the shoe company TOMS, take extra steps to receive a B Corp Certification. This special certification is awarded to companies that meet high standards of performance, accountability and transparency. These standards are in areas such as supply chain practices, charitable giving and employee benefits. Companies must be recertified every three years and commit to continuous improvement of their processes.
Rise of Fair Trade and Ethical Labor
Fair trade and ethical labor practices are critical to ethical consumerism. While the ideas are older, Fair Trade Certification began appearing on coffee, tea and cocoa labels in the late 1980s, then expanded to more products. Products certified as Fair Trade promise that their employees are treated ethically and paid fairly.
Support for fair trade and ethical labor practices has grown tremendously, and the concepts have become mainstream. Consumers want to know that the people behind their favorite products are treated well and paid fairly. For many shoppers, buying ethically is a statement of values.
Impact on Reputation and Brand Loyalty
A company’s success often rides on its reputation and the loyalty of its customers, which begins with trust. When people trust a brand, especially one that shares their values, they’re doing more than supporting a company they like: they’re buying into the brand’s identity and becoming advocates in the process.
Consumers are more educated and value-driven than ever. Many are willing to pay a little more for better products that leave a smaller environmental footprint and improve local communities. In fact, roughly 82% of consumers prefer supporting brands that align with their values. That type of alignment turns customers into long-term supporters.
How Businesses Can Adapt to Ethical Consumerism
Implementing sustainable, eco-friendly and fair trade practices is an investment that can be significant. However, the long-term benefits of adapting to the demands of values-based purchasing by forging sustainable partnerships with ethical suppliers are powerful. Businesses that engage with ethical consumer movements and align with social causes can create lasting positive change for the people and ecosystems in their supply chain. They can accomplish this while still earning a profit with loyal, values-driven customers.
Improving Labor and Environmental Conditions
Ethical consumerism supports Fair Trade, which can help drive improvements in labor and environmental practices in industries such as coffee and palm oil. For example, palm oil is present in many products used daily in the U.S., like baby food, drinks and snacks. It extends shelf life and generally improves flavor.
While extremely useful, growing and harvesting it historically included massive deforestation of Southeast Asian rainforests. Deforestation has eliminated the habitat for many species, such as the orangutan, and harmed local communities through low pay and unfair labor practices.
However, because of pressure from consumers and conservation groups, some palm oil producers found ways to reduce the environmental impact. The movement has spurred the creation of the Roundtable on Sustainable Palm Oil (RSPO), an organization that certifies palm oil producers that follow guidelines that help ensure the future of the environment and palm oil. It still requires a lot of space and labor to produce, but palm oil produces more per acre than many other oil-producing crops.
Agriculture isn’t the only place where sustainable consumerism is creating change. Here are a few companies that support ethical consumption:
- Violin string manufacturer Warchal accepts used strings of their brand in exchange for credit in their online store. Far from being simple pieces of metal gut, violin strings are complex. They are usually comprised of varying materials with fine wire made from metals such as tungsten, pure silver, brass or stainless steel wound around the core. The company takes those strings and recycles the materials into new strings. Although the company no longer accepts strings from outside the European Union due to cost, they were the first string manufacturer with a string recycling program.
- Kent is a U.S.-based brand that produces organic underwear that is fully compostable. Made from organic cotton, the products decompose within 90 days after hitting the compost pile.
- Also U.S.-based, Triarchy makes sustainable denim clothing by reusing the “thick indigo laden sludge” left over from other denim makers. The company works with its suppliers to provide complete transparency in its supply chain using blockchain-verified tracing and embedded QR codes.
The Role of Certifications and Reporting
Certifications like Fair Trade, USDA Organic and Bird-Friendly—and using ESG reporting practices—can improve transparency through open disclosures of social and environmental impact. They are helping move businesses toward more socially and environmentally responsible practices. However, they aren’t the only way for companies to show that they conduct business ethically.
Plus, smaller producers in developing countries may hesitate to apply for certification or invest in the documentation required for ESG reporting without knowing how it will impact their businesses. Consumers can help by engaging with local organizations and expressing their interest and support.
As more companies embrace sustainable business practices and see the benefits of ethical consumerism, hesitant businesses may begin the process as well. However, just because a company doesn’t have a certification doesn’t mean you have to count them out.
Small businesses like home crafters, local coffee shops or clothing stores can still embrace ethical business practices. The key is transparency and openly sharing information about their practices, supply chain and labor treatment.
Consumers and Businesses Are Shifting for the Greater Good
Ethical consumerism is rising as consumers become more aware of how their buying habits affect others. Shoppers are demanding more transparency and responsibility from companies.
To truly make a difference, businesses must embrace ethical consumerism by integrating sustainable and fair trade practices into their operations. In addition to improving transparency through certifications and reporting, businesses need to actively engage with ethical consumer movements and align with social causes. By doing so, companies can build a loyal customer base that values integrity and sustainability. This can ultimately help drive long-term success.
On the other hand, consumers have the power to influence the future of business by supporting companies that prioritize high ethical standards. Making informed buying decisions and actively advocating for more transparency enables consumers to contribute to a more sustainable world.
By working together, businesses and consumers can leave a positive impact on the environment and society, helping create a future where ethical practices are the norm.
Photo by Iryna Inshyna/Shutterstock
