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Richard Clifford (Guest author)

October 20th, 2023

Guest blog: Changing the world with their wallets – the rise of conscious consumers

0 comments | 1 shares

Estimated reading time: 10 minutes

Richard Clifford (Guest author)

October 20th, 2023

Guest blog: Changing the world with their wallets – the rise of conscious consumers

0 comments | 1 shares

Estimated reading time: 10 minutes

In the following guest blog, LSE alum Richard Clifford (BSc International Relations and History 2015) explores the rise of conscious consumers and what this could mean for the future of businesses.

The rise of the ‘conscious consumer’ has fundamentally altered the trading environment for businesses across the world. Whereas Fairtrade stamps on products may have seemed like a novelty when they first entered the UK market in 1994, over the last three decades there has been a steady rise in the increasingly vocal consumer that cares not just what they buy, but from whom and where they are buying it.

In the UK, ethical consumer spending and finance broke through the £100bn mark for the first time at the end of 2020, reaching record levels of some £122bn. This is more than a ten-fold uplift from 1999, when the ethical consumer market was valued at just £11.2bn. [1] While difficult economic headwinds and inflationary pressures have preserved price, value and quality as the primary consideration of the majority of consumers – see the recent Fleishman Hilliard study – the impact of conscious consumers on corporate strategies, with their demands for greater transparency, purpose, and engagement with societal issues is both increasingly clear and likely to rise in the coming years. [2]

What is a conscious consumer?

A ‘conscious consumer’ deliberately targets purchasing decisions to ensure that they generate positive social, economic, or environmental impacts. This could amount to shopping for green cleaning products, avoiding certain fashion brands that have dubious worker and human rights records, or boycotting goods that come from certain jurisdictions.

Frequently – and understandably given the ‘small p’ political subject matter – it is a term that is conflated or used in conjunction with ‘political consumerism’, which refers to the ‘deliberate purchase or avoidance of products, goods, or services for political reasons.’ Each of these concepts speaks to the same end – that consumers are utilising their choice of goods as a means of political participation, deciding which brands or companies fit with their own conceptions of morality and decency.

A growing global movement

The increasing trend is not unique to the UK market but can be seen the world over. According to data from YouGov, more than a quarter of American consumers (27%) can be considered members of the most environmentally-conscious segment of society. Members of this group are committed environmentalists willing to pay a premium for environmentally friendly products, and they have a strong interest in sustainability issues. [3]

The European Commission found in a 2016 study on consumer attitudes, comparable levels of consumers who would pay a premium for sustainable brands in; Denmark (about 36%), Finland (about 37%), and France (about 32). [4] Meanwhile, a study published by Edmund Adagu in The Handbook of Research on Consumerism and Buying Behaviour in Developing Nations found that in nine African countries, about 27% of people have engaged, or might engage, in consumer boycotts. [5] These figures speak to an ever-increasing global appeal of utilising one’s purchasing power to effect political or corporate change.

Consumers are increasingly keen to see businesses playing a role in society. A recent study by Edelman found that a majority of those surveyed wanted to hear more from business leaders on jobs (67%), wage inequality (67%), technology and automation (66%), global warming (64%), prejudice and discrimination (60%), and immigration (52%). [6]

This rise has been driven by younger shoppers in particular. Consumers – particularly Millennials – increasingly say they want brands that embrace purpose and sustainability. A recent Credit Suisse report has suggested that shifting generational expectations of business will have a profound impact on markets in the future. [7] They focus on the rising spending power of the current age group (between ages 16 to 40) which makes up 54% of the world’s population. According to Credit Suisse forecasting, this age group’s share in total global consumer spending is set to rise from 48% in 2020 to 69% by 2040.

Conscious consumerism in action:

There have been several factors that have helped empower sections of society to become conscious consumers. The growth of the internet and digital media has increased access to information and expanded political-participation repertoires. Armed with more freely available data, consumers can mobilise around personal and lifestyle values to engage with multiple causes such as economic justice, environmental protection, and worker and human rights. This often takes the form of discursive actions (outlined in the below section) utilising digital media to target certain underperforming or ‘immoral’ brands.

Increasingly, consumers are keen to have a sense of agency over the choices that they make, as well as an ability to penalise brands or businesses that are not viewed as being aligned to their morals. To impact the market and effectively leverage their position, conscious consumers frequently rely on four key methods to make their voices heard. These methods are briefly detailed below:

  • Boycott: As political consumers, people can boycott products, companies, or services for undesirable practices. This is simply refusing to buy a product because of the activities of a particular company. Boycotting of companies has been around for many years and is an effective form of consumer action. The recent case of Harry Winston the jewellers shows the effectiveness of consumer boycotting. The company was subject to a coordinated boycott because it sourced many of its gemstones from Burma, with this industry having strong links to the Myanmar military. Following several actions including a petition with over 25,000 signatures, in December 2021, Harry Winston announced it “will no longer source gemstones from its suppliers that have Burmese origins.” [8]
  • Buycott: Consumers can also try to ‘ringfence’ their purchases to buy only certain products or to buy only from certain companies. This could include buying only from BCorp companies, or utilising labelling schemes, apps, and shopping guides deliberately to purchase, or buycott, products or services that are consistent with their views.
  • Discursive activity: Discursive activity is a recent novelty that is available to consumers and has been aided by the emergence of social media. It relates to how people communicate the choices that they are making in terms of the products that they buy and will often used satire as a means of criticising companies that are not deemed to be green or sustainable. We have seen numerous examples of companies that gave been targeted by advertisements and social media activity.
  • Lifestyle changes: This involves consumers making significant changes to the way in which they live their lives. This has been seen in the rise of the number of people going vegan, but also notably in the ‘Flygskam’ campaign that has become popular in northern Europe. The term literally translates as ‘flight shame’, a feeling of climate responsibility that led to people, especially in Sweden, ditching flights en-masse. It was so powerful that flight bookings in Sweden fell by 9%. [9]

The corporate response

Brands have had to be reactive, and a variety of approaches have been taken to stay on the right side of consumer sentiment. Consumers have several tools within their arsenal to impact the market and punish or reward companies for their actions. Indeed, today 90% of executives surveyed by Deloitte recognised the importance of having “an aspirational reason for being which inspires and provides a call to action for an organisation and provides benefit to society.” [10]

Core products may be adapted, pledges made to reduce climate impacts and biodiversity, or efforts may be made to clean up supply chains. In some instances, to avoid public backlash and stay on the right side of public sentiment, businesses have looked to pull operations from different regions. Yale Business School have found that over 1,000 businesses have pulled out of Russia following the illegal invasion of Ukraine. [11]

The increasing demand for transparency has helped sharpen corporate focus on how they communicate their sustainability practices to consumers. The pressure is on brands to communicate succinctly their sustainability practices to consumers in language that they understand. The simplest and probably most effective approach is to make sustainable behaviours the default option. As consumers continue to clamour for greater transparency, there will be increasing market pressure on the business community to grow in a green, transparent, and sustainable way.

Richard Clifford currently works in ESG Consultancy with a particular focus on sustainable finance. Richard has spent a number of years working in advisory roles in the corporate and political realm, working for the Labour front-bench Shadow Business Team, as a lobbyist and sustainability policy lead for industry body UKHospitality and in a think-tank focused on geopolitical affairs.

References

[1] https://www.co-operative.coop/ethical-consumerism-report-2021

[2] https://fleishmanhillard.co.uk/2023/07/sustainability-communications-climate-confusion/

[3] https://business.yougov.com/content/7777-reaching-eco-conscious-consumers-us-behavior-habits-trends

[4] https://ec.europa.eu/info/sites/default/files/aid_development_cooperation_fundamental_rights/aid_and_development_by_topic/documents/synthesis_report_online_personalisation_study_final_0.pdf

[5] https://www.researchgate.net/publication/306073740_’Handbook_of_Research_on_Consumerism_and_Buying_Behaviour_in_Developing_Nations

[6] https://www.edelman.co.uk/research/trust-business-built-action-not-just-words

[7] Studies & publications – Credit Suisse (credit-suisse.com)

[8] Harry Winston stops sourcing gemstones from Myanmar – Jeweller Magazine: Jewellery News and Trends

[9] https://www.bbc.co.uk/news/world-europe-51067440

[10] https://www.deloitte.com/global/en/about/press-room/business-leaders-recognize-importance-of-trust-but-do-not-prioritize.html

[11] https://som.yale.edu/story/2022/over-1000-companies-have-curtailed-operations-russia-some-remain

If you enjoyed this blog, you may like to check out LSE Careers’ Discover | Sustainability programme of events and resources.

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About the author

Richard Clifford (Guest author)

Richard Clifford (BSc International Relations and History 2015) currently works in ESG Consultancy with a particular focus on sustainable finance. Richard has spent a number of years working in advisory roles in the corporate and political realm, working for the Labour front-bench Shadow Business Team, as a lobbyist and sustainability policy lead for industry body UKHospitality and in a think-tank focused on geopolitical affairs.

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