Ethical consumerism: a view from Finland - Wiley Online Library

Blackwell Science, LtdOxford, UKIJCInternational Journal of Consumer Studies1470-6431Blackwell Publishing Ltd, 2003283214221Original ArticleEthical consumerismO. Uusitalo and R. Oksanen

Ethical consumerism: a view from Finland Outi Uusitalo and Reetta Oksanen School of Business and Economics, University of Jyväskylä, Jyväskylä, Finland

Abstract Business ethics and corporate social responsibility have gained more attention in recent years. However, the consumers’ perspective on ethics is still a little researched area. This study reports a survey (n = 713) on the views of Finnish consumers about ethics in trade. Consumers’ willingness to promote business ethics as well as the obstacles to ethical consumption are investigated. The results of the study show that while the majority of the respondents regard business ethics as important, this attitude does not translate into their choice behaviour. Consumers are uncertain about which products and firms follow ethical rules and which do not. The most important obstacles to ethical consumption were difficulties in obtaining information, problems in product availability and high prices of ethical products. Keywords Ethical consumerism, ethics in trade, consumer behaviour, information processing.

responsibility for how they do business, so that consumers can make ethically sustainable decisions. Today consumers can choose from a wide variety of products and manufacturers. An active and knowledgeable consumer can effectively make use of goods and services according to her or his own interests. As a result of global competition, consumers may prefer also locally manufactured or traditional products because of their safety and familiarity. Ethical and sustainable business practices are an important competitive advantage where consumers value and rely on them. Interest in ethical trade is on the increase as this issue has recently been discussed and debated widely in the Finnish media. At the same time, ethical consumption and the purchase of ethical products has not become a common practice. The purpose of this paper is to investigate ethical consumerism from the perspective of Finnish consumers. We focus on the problems that consumers might encounter when they are pursuing ethical choices. The research question is:

Introduction

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Social responsibility has become an important corporate goal. It is no longer enough that shareholders’ goals are attained; corporations are also increasingly being evaluated on the basis of how they meet society’s ethical and moral values.1 The trend towards globalization places a new emphasis on the responsibility of the individual consumer. Consumers require social responsibility from corporations. Ethical consumerism addresses the social and environmental consequences of global trade. Ethical consumer choices are also becoming a factor in consumers’ lifestyles. Ethical and sustainable business practices imply that neither consumers nor corporations can ignore the consequences of their actions. Corporations have to accept

This can be subdivided into:

Correspondence Outi Uusitalo, School of Business and Economics, PO Box 35, FIN – 40014 University of Jyväskylä, Finland. E-mail: [email protected]

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How do Finnish consumers perceive ethical trade?

How well do the different information sources perform in transmitting information about ethical trade? What is the role of ethics in consumer decision making? What are the obstacles to ethical consumption and purchasing?

This paper focuses on examining consumer perceptions and decision-making processes as well as purchasing intentions rather than actual ethical purchasing behaviour. In order to understand ethical consumerism, we have to get deep insights into the antecedents to ethical purchasing. By studying consumer perceptions of and attitudes towards ethical trade, the concerns and difficulties that consumers face when trying to make ethical choices will be highlighted.

International Journal of Consumer Studies, 28, 3, June 2004, pp214–221

© 2004 Blackwell Publishing Ltd

O. Uusitalo and R. Oksanen • Ethical consumerism

The ethical consumer

The concept of green consumption is already established in the field of consumer behaviour.2,3 The ethical consumption concept broadens this view by including the ethical and moral aspects present in production and delivery of goods, for example, the use of child labour, suppressing or preventing labour unions, and testing on animals. Ethical consumer practices aim at the fulfilment of the objectives of socially responsible trade. The ethical consumer ideal implies that individual consumers can have a significant role, through their daily purchasing decisions, in promoting ethical corporate practices. Correspondingly, ethical trade refers to international trade that aims at preventing the injustices of global trade, such as child and low-paid labour, pollution of the environment, infringement of human rights and the inequalities in development caused by globalization. A visible aspect of ethical consumerism is that the consumer considers not only individual but also social goals, ideals and ideologies. Sometimes a conflict may be perceived between personal and collective benefits;4 On the other hand, consumers may gain personal benefits from the fulfilment of collective goals. Ethical consumption is thus also a form of symbolic consumption. In this view, a consumer pursues an ethical lifestyle or identity or other social values.3 The previous studies in this field indicate that consumers’ attitudes towards ethical consumption have become more positive, but that this attitude shift has not been reflected in behaviour. The attitude–behaviour gap5,6 is visible in many purchasing situations. Although consumers are concerned with the surrounding society and they feel they should act in a socially responsible way, other issues such as price, value, quality and brand are often more important choice criteria than ethics.7,8 This discrepancy may be owing to variety seeking, or economic and social factors that intervene in the choice situation.2 Especially in conducting daily purchases where involvement is low, consumers are not willing to devote additional effort in order to make a pro-ethical choice.7 Consumers take ethical considerations into account provided that they do not have to compromise their other choice criteria or principles. It is for this reason that the role of the store is critical. Retail stores could better assist consumers and source their supply of


goods as well as design their displays so that ethical choices are quick and easy to make. Today consumers are more informed and educated, and aware of what is required of products as well as their rights and responsibilities as consumers. However, this awareness does not necessarily imply better consumption decisions or more ethical choices.7 Many consumers are uncertain about which firms conduct ethical practices and which do not.8 Moreover, consumers may not know which products are ethically produced and which are not and why.9 Consumers seem to prefer to follow a selective rather than totally ethical pattern of the consumption. The selective ethical consumer aims at opposing specific ethical injustices, such as child labour, environmental pollution or testing on animals.7 Consumers may find it difficult to consider several ethical aspects simultaneously. Interest in ethical consumption is highest when consumers find they can influence their own lives through their choices.7 In order to make ethical choices, consumers need information. Currently, because of the proliferation of brands and images, consumers may find it difficult to form an accurate picture of the ethical conduct of corporations. Of crucial importance here will be the development of governmental regulation of corporate disclosure, environmental claims and general information availability.10 Consumer opportunities to support ethical world trade have improved over the last few years. For example, the Association for Fair Trade, which was founded in Finland in 1998, imported the Fair Trade label into Finland. This label is granted to products whose raw materials and production processes are in accordance with certain ethical principles.11 Consumer decision making and choice: is ethical consumerism possible?

The purchase and consumption of ethical products require that a large amount of effort be invested in information acquisition and decision making. In addition, consumers have to be willing to pay higher prices for these products. Some of the obstacles to making ethical choices may lie in the consumer decision-making process. In their daily shopping, consumers engage in routine problem solving.12 In this situation, consumers


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Ethical consumerism • O. Uusitalo and R. Oksanen

do not devote time to searching external information or evaluating the alternatives. Instead, purchase intention and choice remain unchanged. However, consumers may conduct more complicated choice processes, especially when they buy a given product category for the first time. For example, consumers buying Fair Trade products for the first time may engage in extended problem solving. She or he is motivated to take the trouble to select an ethical product and pay a premium for it. Over time, this ethical decision will become routine, and satisfaction can reinforce intentions and strengthen the likelihood of continued response.12 Consumers need up-to-date and accurate information in order to make ethical choices. Information about firms’ ethics should be conveyed to consumers in such a form that it easily reaches them and does not cause them any inconvenience.13,14 Seeking information will bring benefits, but it also causes costs to consumers. The possible costs include time, money, effort and delaying the decision; benefits of information include satisfaction with the choice, cost savings and the feeling that the choice was worthwhile.12,15 Consumers often use several information sources simultaneously; the different sources complement each other, varying in significance according to the choice situation.16 Some consumers look for comprehensive information while others make their choices on the basis of rather scanty information.12 Scanty information seeking may be explained by the tendency of consumers to reduce the effort involved in making judgements.17 According to this theory, consumers are not maximizing their utility, but make a choice as soon as they find a satisfactory alternative. Consumers’ information gathering resources of time, money and effort tend to be restricted. An ethical decision does not always entail that the consumer is completely informed about all the aspects that affect purchasing and consuming the product. Publicity about unethical conduct is noticed more often than publicity concerning ethical conduct.7 Consumers tend to impose a sanction on an unethical firm by refusing to buy its products, but will not reward an ethical firm by buying its products. Even though acquiring information helps some consumers make an ethical choice, others may feel that this additional information is confusing and it increases their sense of uncertainty. Thus, making decisions becomes even more difficult

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when ethical issues have to be considered in addition to price, quality and other criteria. Today’s informed and aware consumer may, then, be confused about the information circulating on ethical trading and ethical product alternatives.18 Too much of this information may be false, or not enough of it accurate. Such confusion may be increased by the fact that some of a given firm’s products are ethically produced whereas other products made by the same firm are not produced according to ethical criteria.19 Moreover, the globalization of retail trade has led to wide ranges of new products. Country-of-origin labels are not compulsory. The ethical consumer is forced to make her or his decisions on the basis of guesswork and fragmented information. Methods and data

A postal survey was carried out in spring 2002 in order to find out how Finnish consumers view a number of important issues concerning ethical consumerism. The survey method was selected because the aim of the study was to obtain insights about the obstacles and difficulties that Finnish consumers currently face. The sample of 2000 individuals representing the Finnish population over 18 years of age was randomly selected from the national Population Register. Participants were selected proportionally to the population densities of the six administrative regions in Finland. The questionnaire consisted of three sections: respondents’ background information, perceptions of and attitudes towards ethical trade, and opinions about Fair Trade products. This article reports the results of the first two parts. Almost all the questions were structured, only few open-ended questions were included. A follow-up letter explaining the purpose of the survey was attached to the questionnaire. The addressee of the letter was asked to respond. The concept of ethical trade was defined in the questionnaire as follows: ‘In this context ethical trade means that a firm follows the principles of social responsibility in all activities, from the supplying of raw-materials to production. These principles include avoiding child labour, protection of environment and fair play for workers.’ The response rate was 35.7% (n = 713). Table 1 summarizes the demographic profile of the respondents.




Table 1 Demographic profile of the sample Variable Gender Female Male Total Age (years) 18–25 26–35 36–45 46–55 56–65 Total Education Elementary/comprehensive school Vocational/technical school High school graduate College graduate Polytechnic University graduate Total Income (€) Under 8500 8501–21 000 21 001–42 000 42 001–67 500 Over 67 500 Total Region The capital region A city of over 100 000 inhabitants A city of over 30 000 inhabitants A city of under 30 000 inhabitants A rural region Total

Table 2 Ethics and consumer decision making

n

%

398 312 710

56.1 43.9 100.0

115 153 153 166 122 709

16.2 21.6 21.6 23.4 17.2 100.0

147 169 92 168 49 87 712

20.7 23.7 12.9 23.6 6.9 12.2 100.0

85 142 287 153 25 692

12.3 20.5 41.5 22.1 3.6 100.0

155 89 143 117 202 706

22.0 12.6 20.3 16.6 28.5 100.0

They represent the demographic and geographical distribution of the whole population in most respects.20 However, women as well as those with higher education and income are slightly over-represented.

‘How important do you think is that firms follow an ethical code of practice?’ Very important Rather important Rather unimportant Very unimportant

44.3% 46.8% 8.1% 0.8%

‘How reliable do you think is the information that firms give about their business ethics?’ Very reliable Rather reliable Rather unreliable Very unreliable

2.1% 60.6% 35.3% 2.0%

‘How much influence does a firm’s business ethics have on your purchasing decisions?’ Significant influence Some influence Little influence No influence at all

17.0% 52.5% 23.2% 7.3%

ers need reliable and accurate information about the business-related ethical issues in order to make decisions. While 60.6% of the respondents regarded the information given by firms as rather reliable, only 2.1% of them viewed it as highly reliable. Moreover, more than one-third of them viewed this information as rather unreliable (35.3%) or very unreliable (2.0%). This suggests that one important condition of ethical consumerism – availability of accurate information – is still insufficient. The perceived importance of ethics does not automatically translate into consumers’ decision making. The majority of the respondents stated that a firm’s business ethics influence their purchasing behaviour; 17% said that ethics have a strong influence and 52.5% said that ethics have some influence on their choices. The remainder of the respondents (30%) reported that ethics have either a small influence (23.2%) or no influence at all (7.3%).

Results Consumers’ ability to promote ethical trade The influence of ethics in consumer choice

Table 2 displays the results of the questions concerning ethics and consumer decision making. Finnish consumers seem to consider ethics to be important in business: 91.1% of the respondents shared this opinion. Consum-


The majority of the respondents (61.8%) were of the opinion that consumers’ ability to promote ethical trade were poor. Only 38.2% of the respondents stated that consumers have enough opportunities for ethical consumerism.


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Table 3 Respondents’ opinions of consumers’ ability to promote ethical trade

There are not enough ethical product alternatives There is no guarantee of ethics I feel that my choices do not matter Information gathering about ethics is difficult Ethical choices are expensive Ethical products are available in very few stores

Strongly agree (%)

Agree (%)

Don’t know (%)

Disagree (%)

Strongly disagree (%)

23.9 22.7 14.5 28.5 17.4 27.4

42.7 50.5 37.1 45.8 36.1 42.2

22.8 17.0 14.5 15.6 25.4 20.3

8.8 8.8 29.1 9.1 17.0 9.1

1.8 1.0 4.8 1.0 4.1 1.0

The respondents were asked to give their views about various obstacles to ethical consumerism. Table 3 shows how consumers perceived the various aspects of their ability to promote ethical trade. The most important obstacles to increasing ethical consumption are the difficulty of finding information about ethical products, the lack of any guarantee, the lack of ethical product alternatives, and too few retail outlets selling ethical products. The high price of ethical products is an obstacle for some consumers. With regard to the question that consumers feel that they cannot affect business ethics by their purchasing decisions, the respondents were divided, one half feeling that their decisions do not matter, and one-third feeling that their opinions do have an impact. Information sources

We wanted to know how consumers viewed the various information sources, in particular, how various sources perform in conveying information about firms’ ethical conduct. Table 4 displays the results. The respondents regarded magazines/literature, consumer authorities, trade mark/label and brochures as good sources of information about the ethical aspects of trade. Stores/in-store staff, importers, other people/ friends and television were considered the worst sources of ethical information. It is also noteworthy that the share of ‘don’t know’ answers is quite high for all of the sources. This indicates that many consumers are confused and unaware of which sources they should use when searching information about ethical products. A notice that a product has been ethically produced could be visibly displayed on the label, which 61.4% of the respondents viewed as good information sources. How-

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Table 4 The performance of various sources in conveying information about firms’ ethics

Trademark/label Stores/in-store staff Magazines/literature Internet Other people/friends Brochures Television Consumer authorities Importers

Good source (%)

Don’t know (%)

Poor source (%)

61.4 31.9 70.9 39.6 43.7 56.1 45.6 62.5 25.6

20.2 36.6 21.9 51.8 34.4 29.4 32.8 29.3 51.7

18.4 31.5 7.2 8.6 21.9 14.5 21.6 8.2 22.7

ever, 18.4% of the respondents viewed labels as poor sources, and 20.2% of them stated that they do not know if labels are good or bad sources. We also asked the respondents’ opinion about who should supply information about firms’ ethical conduct. This duty seems to devolve upon stores (59.6% of the respondents were of that opinion), manufacturers (51.9%) and the media (43.9%). Ethical and unethical firms

The respondents were asked to list separately firms that they consider ethical and those that they consider unethical. This proved to be a difficult task: about one half of the respondents skipped it. Those who responded mentioned more examples of unethical firms than ethical ones. The lists of unethical firms included more names of companies, while ethical firms were named at a more general level. Of the respondents who listed unethical firms (n = 360), 19.2% mentioned Hennes & Mauritz.




Other firms viewed as unethical were Nike (8.1%), Ikea (7.8%), Nestle (7.5%), Shell (6.1%) and McDonald’s (5.6%). Clothing and textile industry was considered unethical by 8.1% of those who listed unethical firms. The lists of ethical firms included Finnish grocery retail groups, methods of production and industry sectors. Two leading Finnish grocery retail groups were most often mentioned as ethical firms. Of those who listed ethical firms (n = 325), 10.8% mentioned K-group as ethical and 7.3% of them mentioned S-group as ethical. Domestic production was regarded as ethical by 8.3% of those who mentioned ethical firms. Organic products (7.1%) as well as regional and local production (5.5%) were also considered ethical. Few names of firms were mentioned, among them the Body Shop (6.5%) and Nokia (2.8%). Moreover, some respondents viewed the majority of firms as unethical, and some took the view that ethical firms do not exist at all. Discussion

The results of this study indicate that Finnish consumers regard ethical practices in production and trade as important. The majority of respondents state that a firm’s business ethics influence their decision making. While the overall attitude seems extremely positive with regard to the importance of ethics, this does not always translate into actual behaviour. The attitude–behaviour gap refers to a difference between supporting the idea of making ethical purchases and actually carrying it out in practice.7,8 This study could not identify the gap because actual purchasing behaviour was not studied. However, it is likely that the lack of reliable information about ethical products and ethical trade is one factor behind the gap. Only a minority of the respondents (38.2%) felt that they have an opportunity to promote ethics in trade. In order to decrease consumers’ uncertainty, more guarantees about the ethics of products are needed. Consumers are often critical of the claims that firms make concerning their ethical conduct. The guarantees such as the Fair Trade label are important means in assuring consumers that the claims about trade ethics can be trusted. The respondents considered stores, manufacturers and importers to have a very important role in inform-


ing the public about the ethics of firms and products. Stores can affect consumers’ decisions at the moment of purchase. They can also supply the stimuli that encourage consumers to make impulse purchases and try new products. Manufacturers and importers can provide consumers with important information in product labels at the point of purchase. Manufacturers who refine raw materials imported from developing countries should be responsible and aware of the conditions under which raw materials are produced. Magazines and the media provide information to consumers before they go shopping, and provided that the message is strong enough, consumers recall that information at the moment of purchase. There seems to be a discrepancy between consumers’ views of the sources that they regard as performing well in providing ethical information and the parties that have a duty to convey that information. One-third of the respondents regarded store and sales staff as poor sources of information. Stores are expected to do more to provide reliable information about the origin and production conditions of the goods they sell. In order to achieve this, sales staff need educating so that they are able to inform consumers. Consumers are often uncertain about which firms act ethically and which act unethically. Nike, Hennes & Mauritz as well as the textile and clothing industry in general were mentioned as unethical. They are almost stereotypically unethical firms. It may be difficult for such firms to change consumers’ attitudes. Conversely, the Body Shop is stereotypically ethical. The earlier studies suggest that negative information about unethical actions has a stronger effect on consumers’ attitudes than positive information about ethical actions.7,18 The attention of media towards unethical incidents may further strengthen consumers’ attitudes. Consumers tend to be sceptical and cynical of ethical claims, and find it easier to believe that firms are unethical rather than that they are ethical. The role of image is important. An ethical image seems to polarize: a firm is viewed as either ethical or unethical. A firm seeking to convey an image of ethical conduct thus needs to invest heavily in building this image, whereas images of unethical firms may arise merely on the basis of occasional rumours. Furthermore, many firms do not have any ethical image at all. Some consumers perceive business as an amoral


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activity, they consider business beyond moral judgements and judge it only based on the profit it makes. Conclusion

Ethical consumerism has recently become an ideal which is pursued by groups of consumers especially in the Western countries. Both firms and consumers have a significant role in promoting ethics in production and trade. The most important barriers to ethical consumerism appear to be difficulties in obtaining information, the availability of ethical products and the high prices of these products. Consumers’ consciousness about ethics should be enhanced by educating them and providing them with reliable information. Ethics in consumption should become a norm in society, which is followed in the same way as other moral principles, or invisible rules.4 Consumers may find it difficult to make a trade-off between convenience or low prices and ethics, even when they regard ethics as important. But if neglecting ethics was to become unacceptable and immoral behaviour, positive attitudes towards ethics might be realized in purchasing decisions. Public policy makers and firms interested in ethical consumerism should pay attention to consumers’ confusion and uncertainty. Consumers find it problematic that firms carry both unethical and ethical products in their ranges. It remains a future challenge for firms to find ways to present ethical product alternatives visibly and convey reliable information about ethics in order to justify why a given product meets ethical standards, and why that product may cost more than other products. One future opportunity open to firms in marketing ethical products is the practice of selective ethics. For example, the Body Shop concept is famous for a single ethical claim: no products are tested on animals. While consumers find it difficult to consider several ethical criteria simultaneously, selective ethics only require that they take into account one or two important ethical issues. Opportunities for socially responsible and ethical consumerism continue to be little known among consumers. Firms need to show more clearly that they are pursuing ethical codes of conduct. They could develop

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