An overview of ethical markets in the UK

This includes information on the: 

• ethical food
• home
• travel & transport
• finance
• personal products, and
• community sectors. 

We include key figures on growth, and provide forecasts for the future of ethical spending in the UK based on attitudinal survey data. The 2023 Ethical Markets Report is available along with all previous editions. The research, sponsored by Co-op Food, was conducted during 2023.

Overview of current ethical markets in the UK

Our 2023 report shows the growth of ethical markets faltering significantly across most sectors for the first time since 1999.

However, there were two big growth areas where spending increased significantly:

• spending on electric cars increased by 80%
• spending on green electricity tariffs increased by 40%

These played a key role in pushing the overall value of the ethical market up by 7% in 2022.

The previous Ethical Markets Report (2022) shows that ethical markets grew by almost 35% in 2021, expanding to £141.6 billion. That was the largest jump in the value of the market we’ve seen since we started tracking it in 1999.

That record-breaking growth was driven by three markets in particular: electric cars, renewable energy tariffs, and ethical investments.

Read on for a breakdown of ethical spending in different market sectors.

Ethical Food & Drink

Overall we recorded a 7.6% growth in the Ethical Food and Drink datasets compared to the previous year, and is now worth over £12 billion. 

Despite the growth it was a bit of mixed picture, as some of this increase in value is likely to be from an increase in prices rather than amount sold. Vegetarian and vegan products appeared to have fallen slightly, with Mintel reporting this being due to a number of factors including cost and Covid recovery changes. 

Organic

The organic food and drink market saw only a small increase from 2021-22, of 0.5%. Previously it had increased by 4.1% from 2020 to 2021. It's now worth £2.859bn, from £1.475bn in 2010.

Longer term growth was likely driven by consumer demand for ethical groceries, wider organic choice online and the continued popularity of box scheme sales said the Soil Association.

Fair Trade

The market for fair trade products increased by nearly 16% to £2.3bn in 2022 from the previous year.

In 2010, fair trade sales totalled £1.1bn. According to GlobeScan 2021 data, 65% of consumers in the UK say they choose fair trade.

Different fair trade markets have seen different levels of increase. For example, Fairtrade Foundation noted that fair trade apples rose by 38% and rice by an impressive 107% in 2022.

Ethical Finance

Following an incredible growth in the ethical finance sector of 50% in 2021 from 2020, the following year was much lower, with only 1.5% increase. However, this matched the level of growth across financial markets in general. 

Different ethical financial markets saw differing levels of growth, with credit unions being the largest area of growth.

Ethical Home

In total, the eco home sector rose 27% from 2021-22. 

The value of green home sales that we record rose sharply to over £12 billion in 2022. Almost all of this increase can be accounted for by the 40% increase in the value of green electricity tariffs, which now accounts for more of half the spend in this category. However, it is likely that this is mainly from increase in prices as the number of people on eco tariffs fell.

Changes in government policy are likely to have led to the fall in the spend in home heat pump installations and home insulation.

Ethical Travel & Transport

Once again we saw a huge rise in spend in this area, particularly for sales of electric and hybrid cars.

Sales grew by nearly 80% in 2022 from 2021. Improvements in electric car infrastructure, government grants, and increased availability of models have all contributed to this growth.

There was a disappointing fall in spend on bicycles in 2022, perhaps as a result of result of the peak during the pandemic which saw a surge in interest in bikes.

Ethical Personal Products & Clothing

The ethical personal products market grew by 20% in 2022 from 2021 to £2.15bn.

This mainly appears to have been driven by an increase in secondhand clothing purchases, which saw an increase of 49% from 2021 to 2022.

Our ethical clothing brands guide now features 8 purely secondhand retailers alongside traditional clothing brands.

Ethical Community

The ethical community sector stalled in 2022, with a growth of only 1% from 2022 to 2021. 

However this masks real differences with 147% growth in charity shop sales, but a decline of 14.5% in local shopping. 

Overall community spending was £11.9bn in 2022.