Can buying “ethical” make a difference?

By Mark Tsang, AgUnity Head of Data

The 1990’s was characterised by an acceleration of the globalisation process but economic growth was limited to a few developed countries. The new millennium saw other economies also accelerate their economic growth rates to lift millions of people out of poverty. China itself reduced the number of people living in extreme poverty by 745 million over a 30 year period. In this regard the human benefits have been astounding. Riding on the back of cheap fossil fuel energy on-demand, exponential technological innovation and a hyper connected world, it would be easy to surf this wave for as long as possible.

However, as our understanding of the full impacts of our economies grow, we find that “cheap energy” is not so cheap when we factor in the damage to climate and the flow on costs of destructive weather events to crops, communities and biodiversity. Exponential technology has truly amazed and transformed societies. The smart phone and Internet are prime examples. Yet these very same technologies have been used to manipulate, incite violence and distort the truth. The extraordinary advantages they yield have been reserved for only select societies and their profits reserved for a handful of billionaires. Smartphones appear to be everywhere we look, but in reality, less than half of the world’s population have them. Those people remain beyond the reach of digital education, health care, communications, financial services and the markets they need to progress.

These issues, amongst others, are being highlighted as the unsustainability of our current economics accelerates towards “tipping points” beyond which, the astounding human benefits once achieved may be consigned to the past. In response to this unsustainability, consumers are reconsidering their buying practices and bringing ethical choices into the influence their spending dollar holds.

Food choices such as fair trade coffee and ethically sourced chocolate address issues of a fair minimum price to the farmer, eradication of child and forced labour and sustainable farming practices.

Sustainable fashion has seen a recent rise and terms such as fabric traceability have become a consideration clothing supply chains. Retail consumers are also making their financial choices felt through their selection of ethical pension funds and through shareholder demands for more sustainable corporate strategies. From these actions, capital has started to flow from traditional to ethical funds and shareholder activism has let financial institutions know that fossil fuel investment is not what they want on the agenda. In May 2021 BP and Shell saw strong shareholder votes for meaningful decarbonisation plans and the four major banks in Australia are under pressure to end lending to fossil fuel projects.

On the back of this movement, “Sustainability” has become a marketable label and the rise in ”Ethical”, “Green” and “Sustainable” products and services has accelerated to capitalise on the conscious consumer choices that consider people and planet. However, transparently and reliably tracking the origins of a product then certifying that it is ethically sourced requires the right systems, procedures and organisational reach. These capabilities are not easily obtained and the “green washing” of products and services has also seen an increase. Green washing is where the ethical and sustainable claims made by some companies are superficial and without the necessary robust supply chain systems and procedures to back up their claims.

More recently blockchain solutions have come to the fore in providing a distributed and trusted system of supply chain tracking that allows consumers to follow the path of products from source to their shopping bag. A technology solution is not the silver bullet on its own. It must be accompanied by comprehensive supply chain procedures, verifiable audit processes and an organisational reach that extends deep into producer geographic regions.

AgUnity Coffee Farmers in Ethiopia, part of the AgriUT Ecosystem

Does buying ethically do any good? Can the shopping choices of an individual make a difference? If I choose the ethical option won’t someone else just buy the product I rejected? Successful companies are continually gauging their attitudes and trends of their customers. It’s a compulsory ingredient for their success.

A change in customer buying habits signals the need to adapt to meet customer demand. An upward trend in ethical product demand will be matched with a shift in product offerings. For the ethical company that has now earned your custom, your dollar is building capabilities and improving its profits and efficiencies — leading to lower prices. They can then improve their products and marketing and thereby grow further. When stocks on supermarket shelves deplete quicker than expected they are moved to a more prominent position which in turn grows the ethical sales. Your choices, however small, are combined with similar choices from other ethical buyers and builds the momentum that leads to change. More importantly, your ethical choices are a manifestation of your intentions to make a positive impact on issues important to you. They are an expression of who you are and what you stand for. Collectively, our individual buying choices influence attitudes of those around us, they dictate company directions, they move financial markets and they signal to governments the desire for change.

Will you be buying ethical next time you purchase?

Join the Conversation in one of our community channels to tell us what you think of the role of “Ethical Buying” in making a difference: www.agriut.org

AgriUT is a digital utility token system that engages consumers through direct interactions and a means to reward and thank farmers that grow our food.