Consumers are becoming more conscious of the social, environmental, and economic implications of their purchasing choices. However, ongoing cost-of-living pressures remain a significant barrier to translating these values into action.
A recent report by Baptist World Aid, based on responses from over 2000 Australians surveyed by research firm McCrindle in September, revealed an increased awareness of the impact of consumer choices.
According to the report, about 70 per cent of respondents would like to make a change in their shopping habits to align with more ethical practices. Further, 51 per cent are familiar with the term “ethical fashion,” a three per cent increase from 2021.
The report found that Gen Y, also known as the millennial generation, is at the forefront of ethical consumption, with over 70 per cent actively engaged, surpassing Gen Z (66 per cent), Gen X (61 per cent), and Baby Boomers (54 per cent). Meanwhile, about half of the surveyed individuals are seeking to reduce the amount of products they buy, are researching how they can sustainably dispose of their clothes and are learning to repair certain items.
Despite wanting to consume more ethically, financial constraints are a significant barrier. While value for money (73 per cent) outweighs low prices (54 per cent) as a primary driver of purchasing decisions, affordability remains a top priority amid high interest rates and rising prices.
About 84 per cent of Australians prioritise affordability over aligning purchases with their values. Notably, there has been a 12.5 per cent decrease (from 18 per cent to 16 per cent) since 2021 in those who would prioritise their values being reflected, over affordability, when making purchasing decisions.
Nnothing but time
Sarah Knop, national engagement manager at Baptist World Aid Australia, told Inside Retail that, when faced with financial challenges, many consumers will opt for value and low price.
This, she said, is a confronting insight that is difficult to reconcile with the exploitation and injustice that’s currently experienced by many supply chain workers, as well as the ongoing and rapid environmental damage that’s caused by global supply chains.
However, she noted that there are cost effective forms of action that Australians can take to shop ethically without spending a lot – such as buying second hand and taking good care of, and repairing, their existing clothing items.
“They can also be advocates for ethical consumption by demanding better from brands, hosting a clothing swap with their friends, or sharing what they know about ethical consumption on social media, for example, and these actions cost them nothing but their time,” Knop said.
At the same time, she pointed out that 70 per cent of Australians still want to change their shopping habits to align with their values over the next 12 months.
“Our research found that engagement with ethical consumption information is increasing, with 43 per cent of Australians currently engaging [with this] on a fortnightly basis,” Knop said. However, there is a “significant gap between awareness and action.”
Greenwashing and choosing well
Another significant barrier that can hinder consumers from adopting more ethical practices is greenwashing.
In a study of 247 businesses, the Australian Competition and Consumer Commission (ACCC) found that about 57 per cent of brands had made “concerning claims” about their environmental credentials – with the biggest offenders being cosmetic and personal care brands.
According to Knop, scepticism is not surprising, given the uncertainty about which brands are ethical, where to find reliable information, and how to start on the ethical consumption journey. She stressed that it’s the responsibility of brands to restore trust through transparent and honest communication.
In repairing this relationship between brands and customers, Knop suggests strategies such as informative labelling, and the public disclosure of information relating to labour practices, production methods, fibre usage, and other relevant details.
These actions can also foster stronger collaboration within the industry, and help to address issues relating to modern slavery, worker exploitation, and environmental degradation.
And while ethical and sustainable brands can’t compete with fast fashion, furniture and other items on price, there is a long-term benefit involved in “choosing well.”
“We can all do our part, starting with reducing our consumption which is as good for our wallet as it is for reducing our environmental impact. We can also choose well, even when we can’t afford to choose the best. This may include buying second-hand, renting, holding a clothes swap with friends or choosing quality, timeless pieces that stand the test of time,” Knop said.
“Fashion trend cycles have, and continue to get faster, but we can all slow down our consumption and get more wear out of what we own by following care instructions, repairing what we can and thoughtfully reusing and recycling.”
“If you can’t see it, you can’t stop it”
The report also identified that Australian consumers are concerned about “modern slavery” which is occurring across the globe. According to the report, modern slavery is used to describe a group of crimes where offenders use coercion, threats or deception to exploit victims and undermine their freedom.
About 80 per cent of those surveyed had heard of situations involving forced labour or modern slavery, while over 60 per cent disagreed with the notion that slavery had been abolished. Meanwhile, about 45 per cent strongly or somewhat agreed that they had likely purchased products that have been made, at least in part, by victims of modern slavery.
Further, about 57 per cent of those surveyed believe that modern slavery is more likely to be involved in the production of cheaper goods. Be Slavery Free director Carolyne Kitto told Inside Retail that consumers, companies and governments have a key role to play in ending modern slavery as part of production and the supply chain.
Regarding how companies and governments should take action, she said that companies need to know where their products come from as, “if you can’t see it, you can’t stop it.”
Kitto added that governments need to publish and distribute a list of high-risk regions and product categories where goods involving modern slavery are imported into, and made in Australia.
“Government has the role of regulating to create a level playing field for Australian businesses, to ensure that no-one has a competitive or reputational advantage because their products are cheaper than those of their competitor who are doing the ‘right-thing’ in relation to labour standards,” she said.
“Then business and government can work together to ensure that products made by people in conditions of modern slavery are not imported into Australia.”