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What is Ethical Consumerism?

Should You Buy With Your Heart, Not With Your Wallet?

Perhaps you have heard about “Ethical Consumerism”. It has various elements to it but, generally, is the practice of spending money in a way that aligns with your values. That’s the angle I like to address because it makes making ethical choices a key element in decision making.

What is Ethical Consumerism

Writing for Business Insider, Paul Kim states at face value, ethical consumerism is the idea that your consumption has an impact on the world, so you want that impact to align with your values. This means understanding the footprint of the products you consume, how they were made, and how they will be disposed of. 

Another way to look at it is ethical consumerism is a form of political activism based on the principle that buyers in markets purchase goods associated with positive responsible environmental and social processes. Ethical consumers might boycott brands that fail to comply by high environmental and social justice standards.

Buying Based on Your Values

Global citizens have become increasingly conscious of how their spending can portray their own values and influence brands. Whether that be a person’s commitment to environmental protection, fair labor practices or supply chain transparency, consumers are voting with their wallets in a bid to support responsible business ethics. A 2015 Nielsen report found that 73% of the Millennial generation was willing to pay more for sustainable goods.

Someone who's looking to buy ethically may look for the animal products that were sourced humanely, source produce locally or buy at farmers markets — or avoid animal products as a whole. Relatively ethical products on grocery store shelves can be identified by certain certifications shown on the package, such as USDA Organic or Certified Humane. 

Beyond commodities, you can extend your ethical consumption to where you put your finances. For starters, you can conduct research on what type of investments your bank holds. Many of the largest banks are major investors in the fossil fuel industry. You may find several of the investments in your own portfolio are in companies that participate in unethical practices. Eradicating these investments from your portfolio is known as socially responsible investing (SRI).

In addition to divesting from unethical stocks, you can make investments in companies that make a positive change in a practice called impact investing. Environment, Social, and Governance (ESG) investing is a type of impact investing that ranks companies based on their environmental impacts, social impacts, and corporate governance. Ethical consumerism

Barriers to Ethical Consumerism

One of the main barriers preventing widespread ethical consumerism is that it is time and cost prohibitive. If markets prioritize efficiency and profits over sustainability and ethics, searching for those ideals can become extra challenging.

Ethical products generally cost more, like free-range animals, which requires owning more land. Additionally, impact investing generally gives lower returns than the rest of the stock market. 

Even without the extra costs added, there's rarely a completely ethical product. Each product usually comes with some trade-off. Jason Dana, an associate professor of marketing at Yale University, gives the example of buying locally to cut down on the emissions used to transport produce. However, "a lot of times, there's a lot more resources used in growing stuff," Dana adds. Choosing to prioritize one issue might exacerbate another issue, like pulling on one end of a knot.

Response of Companies

Part of the idea behind ethical consumerism is signaling to companies that there's a demand for sustainable, ethical products. However, companies might try to skip it and take on the aesthetic of a sustainable company without making any changes, a practice known as greenwashing. For example, the USDA only regulates the use of the "Free Range" label in poultry products. So, there's no authority ensuring that the cows, pigs, and egg-laying chickens that become "free range" beef, pork, and eggs were free range.

Julie Irwin writes for the Harvard Business Review that “I worry that the pessimism about ethical consumerism gives companies the idea that they should not actively pursue the moral high ground because consumers will not reward them for it. I also worry that consumers will give up on trying to effect change through purchasing, because they believe that the aim is hopeless. On the flip side, it is pleasing to imagine the market fixing societies’ ills, to provide a nice antidote to the common idea that the marketplace and consumers are amoral and solely profit-driven.”

Inattention Action Gap

According to Amy Nguyen, the intention action gap is the difference between what most consumers SAY matters to them, and how they spend their money. While the underlying trend towards ethical consumption is positive but many are still heavily influenced by price and convenience. A 2020 Getty and YouGov survey of 10,000 people on purchase decision making, found that 92% believe the way we treat the planet will have a significant impact on our future, yet 48% said that whilst they should care about their purchasing habits, convenience takes priority. Similarly, whilst 81% saw themselves as ‘eco-friendly’, only 50% would go out of their way to buy products with strong green credentials.

I agree with Irwin and add that ethical consumerism is being taxed by recent inflationary trends, supply chain issues, and a lack of attention by companies in the post-Covid environment. Still, I recommend we stay the course because an active public that buys based on moral values is one way to check on capitalism, where profits rule the day. Ethical consumers look for a broader way to measure the success of a business that includes concern for social causes, the environment, and ethical practices.

I want to point out that my "Workplace Ethics Advice" blog was rated #5 in the list of the 20th best blogs dealing with CSR. Here is the entire list: Top 20 Corporate Social Responsibility Blogs and Websites in 2022 (

Blog posted by Dr. Steven Mintz, The Ethics Sage, on March 8, 2022. You can sign up for his newsletter and learn more about his media activities at: Follow him on Facebook at: and on Twitter at: