Comment: To what degree do ethics play a role in consumers’ purchasing decisions?

Tesco and Sainsbury’s recent dispute over whether Fairtrade products can be price-compared with non-Fairtrade comes down to what degree ethics play a role in consumers’ purchasing decisions. There is a strong body of evidence suggesting that the Fairtrade mark enhances consumer preference and loyalty, meaning fair trade makes commercial as well as ethical sense for retailers.

Ethical marks are no longer just for the affluent, they have broken into the mainstream. Duchy Originals, an early pioneer in the organic movement, is celebrating its 21st birthday, and next year Fairtrade celebrates its 20th. Both began as ambitious projects that many said were foolhardy. Over two decades, their success can be measured not only by their growth but by the proliferation of ethical brands and certification standards that have emerged in their wake. To some degree this has cannibalised the organic sector (although Duchy Originals from Waitrose has pulled ahead in share). Consumers can now choose between an increasing selection of ethical labels such as free range, Red Tractor or Freedom Food. But overall the ethical sector is larger, more vibrant and more hotly competed than ever.

Extreme poverty, climate change, environmental depletion, human rights abuses, poor animal welfare and food security are just some of the profound challenges faced by the global consumer goods system. As the ethical sector moves into the mainstream, there is a realisation that it can scale up to contribute to the solution. However, two elements remain important: becoming more transparent and striving for even greater impact. Transparency is critical, enabling an increasingly informed consumer to explore the consequences of their choices, and empowering the producer to evaluate the benefits of sustainable development. The Fairtrade Foundation has participated in the creation of AskMalawi.tv, a website that connects the consumer directly with a Malawian farmer group. These farmers are armed with mobile video cameras to answer questions about what life is really like in a rural farming community. Consumers don’t have to take the retailer’s or even Fairtrade’s word for the difference they can make, they can find out for themselves.

Continuous improvement is also essential. The realities of dealing with complex supply chain systems while striving for the right ethical outcomes are rarely straightforward. This is why Duchy Originals from Waitrose and the Prince of Wales’s Charitable Foundation support the Duchy Originals Future Farming Programme, helping British farmers to find ways to improve yield and productivity while continuing to farm in an environmentally friendly way.

Internationally, it is why Fairtrade not only insists that producers must meet standards on child labour, but works with farms and their communities to address the root causes of the problem through raising incomes and improving real conditions for children.

The next phase of ethical and sustainable business will take us towards new models.

But scaling up into the mainstream is now unstoppable: this is no longer a niche sector.

• Michael Jary partner, OC&C Strategy Consultants

Michael Jary is also chair of the trustees of The Fairtrade Foundation and chairman of Duchy Originals