Buying Social Good Products: Is Your Money Really Having an Impact?

We live in a world where an increasing number of people are caring about the social impacts of the products they purchase. Many companies too have gotten on board with these ideas and are producing more eco-friendly and ethical products as well as developing Corporate Social Responsibility (CSR) programs. From Fair trade coffee to energy saving light bulbs, from organic food to recycled packaging, consumers are starting to make more ethical choices in many retail areas.

But does buying and producing more ethically really make a meaningful difference and, if so, how and where?

We are told by advocates of ethical consumerism that shopping in this way is essential to progress and that by doing so we are helping preserve the environment and ensuring that traders and workers globally get a better deal. But how does the evidence stack up? Could we be doing more or should we be doing things differently?

You might think that the idea of living in a world of kinder production and consumption, where everyone did their bit to ensure that people the world over got a fair deal, would be universally accepted as a good idea. But you would be wrong. There are a number of people from both the academic and business worlds, from all parts of the political spectrum, that dispute the idea that socially produced goods have a positive impact. Some even call into question that it is a good idea at all.

Mark Littlewood, director of UK ‘think tank’the Institute of Economic Affairs, believes that fair trade does a ‘modest amount of good… and in some cases brings about harm.’

Some commentators have pointed out that ethical consumerism serves as a distraction from more potentially effective long-term solutions such as global economic redistribution, as well as avoiding dealing with more systemic problems like economic exploitation, tax avoidance and corruption. It is seen to an extent as the middle classes ridding themselves of guilt while things in general ‘stay the same‘.

This is an argument used by many on the ‘left’ in politics who favor more radical change. Coming from a Marxist standpoint, consumer researcher Nicki Lisa Cole points out that ‘to the extent that we opt for the simple fix of ethical consumption, we fail to actually confront the root of the problem that causes these anxieties – the system of capitalism.’

Those coming from a more right-wing perspective have argued that the impact of social consumerism is limited, pointing out that, on the issue of fair trade, producers in the developing world benefit more from access to global markets than from being paid better prices. Therefore the free market would actually work out better for them than ethical trade.

But hang on… isn’t it the capitalist free market that has caused problems such as environmentally damaging over-production, global inequality and worker exploitation? And if we simply divert all our attentions to trying to radically reform or revolutionize the system, what of the global workforce and producers getting a bum deal in the meantime? What of the environment which, if experts are to be believed, can only cope with a few more years of being mistreated before the damage is irreversible?

It’s important to go beyond ideological concerns and look at the practical differences ethical consumerism might be making on the ground. By doing this, we can truly acknowledge the positive impacts that shopping more ethically and socially is having both on communities and the environment.

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The positive impacts of ethical consumerism on the environment are fairly well accepted and there is plenty of evidence available. For example, the recycling industry has a wealth of statistics and facts about the benefits of recycled goods such as paper and plastic (see here for details: http://www.all-recycling-facts.com/recycling-statistics.html)

Regarding the livelihoods of producers in the developing world, which is one of the key concerns of the fair trade movement, the Fair Trade Foundation estimates that the fair trade industry is having a direct impact on the living conditions of approximately seven million people in rural areas in the developing world.

There are a growing number of small ethically-minded start-ups that have emerged in the past fifteen to twenty years, who have fair trade and sustainability embedded within their brand and aim for transparency in terms of the social benefits they offer. These can range from companies directly sourcing products from developing communities and ensuring they get paid sufficiently for their goods, to companies investing some of their profits in development initiatives across the globe.

Many of these smaller brands will make explicit the real world benefits they aim to provide and the difference they are trying to make. It’s up to us as consumers to make sure that these companies are good to their word and hold them to account through our purchasing power if they are not.

These positive impacts are individual and localized rather than large scale but, when added together, they do make a significant difference to communities at grass-roots level. Additionally, their existence and the support given to them by consumers has another indirect but very crucial positive impact – the knock-on effect of encouraging bigger transnational companies to look at their own practices and shift towards a more ethical approach.

The growth of fair trade, ethical consumerism and public campaigning around these issues has been closely followed by a trend in greater CSR among the bigger name brands who are keen not to lose market value by being seen as unethical.

There have also been developments in terms of policy with legislation being brought in at national, regional and global level to move towards leveling the playing field and ensuring minimum working and environmental standards.

Again, consumers using their purchasing power to behave ethically can be seen to have had a measurable positive impact. Boycotts and campaigns against big companies using sweatshop labour have helped to bring about positive change, with companies such as Nike being forced to acknowledge the poor labour conditions in their supply chain. This led to Nike changing their practices and forcing factories to adhere to certain minimum standards.

Also in the field of clothing and fashion, the Ethical Consumer Research Association has written about the effectiveness of campaigning and pressuring clothing companies to adopt more ethical methods of production, which has seen real improvements in developing countries in terms of working conditions, ending child and forced labour, wage improvements and ending the use of environmentally damaging toxic chemicals.

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So it’s a bit of a self-perpetuating system, really. By buying social goods we not only strengthen the position of socially-minded producers and do social good ourselves – directly improving the lives of poorer communities and helping to protect the environment – but we also help indirectly influence things by encouraging larger companies and indeed governments and supranational institutions to think and behave differently, which in turn will influence more people to shop more ethically.

So yes, despite there being some detractors and the fact that still not enough people are on board with the cause, buying social good products does have a demonstrable positive impact, both directly and indirectly. Many of the critics and naysayers do have a point in that ethical consumerism isn’t gonna save the world or transform society in and on itself (or if it does, it will take far too long to do so!). There does need to be emphasis also on wider structural change and better attempts to tackle the global economic inequalities that continue to exist, along with the associated problems that the system brings.

Consumers also need to remember their negative purchasing power as well as their positive purchasing power. If a brand is not behaving to an acceptable standard, boycott it or join/start a campaign to try and force it to change its behavior!

But buying more ethically is a start. It’s a move in the right direction. If enough people did it more regularly, we might see that the change is more noticeable and radical than we expected. So it’s worth doing the little bit of research, spending that fraction of time reading product labels. It’s time to realize the power we have as consumers to make a difference.