Stronger sales of solar panels, electric cars and free-range poultry helped to grow the UK’s overall “ethical market” by 8% in 2014, a new report claims.
However, the report’s authors warned that recent government changes such as cuts to subsidies for householders installing rooftop solar panels would make it tougher to repeat this growth in spending on low carbon home energy and cars.
The overall value of sales for a sector that spans charity shops, vegetarian food and energy efficient lightbulbs, rose to £38bn in 2014 from £35bn the previous year, according to the latest to the ethical consumer markets report from the magazine Ethical Consumer and Triodos Bank.
“Disappointing changes to government incentives for home renewable energy installations and lower impact motoring in 2015 will threaten the strong growth in sales of lower carbon choices identified in this report,” said Rob Harrison, editor of Ethical Consumer.
“Successive reports have shown that government incentives to encourage ethical behaviours can bring the most dramatic changes in consumer impacts and should be used more rather than less.”
A second subsidy scheme known as the renewables obligation has also been cut for small-scale and large projects angering both the solar industry and environmentalists.
There has also been anger among campaigners over chancellor George Osborne’s changes to vehicle excise duty that make driving more expensive for those driving smaller, clean cars.
The latest ethical spending report shows a 40% leap in sales of electric, hybrid and other cars in the A-rated tax band to £7bn in 2014. Spending on solar panels rose by nearly 25% to £716m. There was a 9% rise in bicycle sales to £956m.
The report found there was no growth in local shopping in 2014 but there was a 4% rise in charity shop sales.
The authors highlight the first ever fall in Fairtrade sales since the launch 20 years ago of the scheme to offer developing world farmers a minimum price.
The ethical spending report commented: “There is no simple explanation, but rather a range of likely factors including falling sales at the Co-op and Sainsbury’s, Fairtrade’s biggest supporters in the retail sector, [and] rising sales at Aldi and Lidl which have smaller Fairtrade ranges.”
The ethical food sector grew overall, however, with a revival in organic sales and strong growth in sustainable fish sales, which rose 12% in 2014. Free range poultry sales rose 8% and free range egg sales rose 2%.
The value of money held ethically fell by 2%, largely caused by accounts being closed or moved from the Co-operative Bank.