Highlights from the 2022 Ethical Markets Report
1) Electric and hybrid car sales
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.
Our report also tracks sales of low-emission vehicles (LEV) powered by petrol and diesel, which have collapsed from £558 million last year to under £1million. This was partly due to falling demand, but was largely because recent changes to emissions testing led to most conventionally fuelled cars losing their LEV status.
2) Green energy tariffs
Our research showed a 32% increase in household spending on renewable energy tariffs. The sector’s value rose to £4.5 billion. Although we restricted the definition of this market to those tariffs which we felt were meaningful, we have been critical of this market generally in our reviews.
A total of 4.5 million households are now supplied by green energy tariffs, which is 1 million more compared to last year.
3) Ethical investments
For the second year in a row the amount of money held in ethical investment funds grew significantly as more funds invest according to ethical standards. In 2021, the amount soared by 84% to £61.1 billion.
To put this into context, the 2010 Ethical Consumer Markets Report reported the size of the entire ethical market to be £47.1 billion. Back then the amount held in green funds was just £11.3billion. However, when compared to the £1.6 trillion said to be invested by UK funds in 2021, the ethical investments tracked here still only represent a mere 3.8% of the market.
4) Home insulation and heat pumps
This was the second year that we tracked spending on home insulation and heat pump installations. Both sectors have grown despite the lack of significant government incentives to change the way we heat our homes.
Sales of heat pumps grew by 184% and we expect the industry to keep on rising as heat pumps become more widely available and now that Covid lockdowns have stopped impacting building works. In our Climate Gap reports, we are campaigning with others to improve incentives.
Overall value of ethical consumption in the UK
Value of ethical consumption in the UK 2020-21
||Value 2021 £m
|Ethical food & drink
|Eco travel and transport
|Ethical personal products
Our research confirms findings from earlier reports that ethical market growth is a long-term trend.
Although some sectors have been affected by disruptions like the pandemic and rising costs of living, the factors driving overall growth have proven to be sufficiently strong not to be driven off track.
We run a YouGov consumer survey in tandem with the sales research for this report. It appears to confirm that consumers are aware of the longer-term need to pay attention to ethics and sustainability in the choices they make, despite the cost-of-living crisis.
A total of 16% answered that they have been buying fewer ethical products, and 11% said they had been buying more.
In August 2022, 73% of respondents said they had been buying “about the same amount” of products for ethical reasons as previously.
Our next report will look at sales in 2022, a year which saw gross market instability and a squeeze on consumers’ purchasing. It is unclear how these factors will have affected ethical spending but we remain confident that the longer-term trend will remain strong.
When government and business focus on short-term schemes and cost saving, encouragement for ethical choices can be left to take a back seat. As we learn from this report, government intervention and business innovation are critical elements in making ethical choices easy and popular.
And because our economy urgently needs this mass transformation to sustainable behaviours, we urge them to step up to the plate.