Ethical 1. Note: From ‘Ethical Markets Report 2017’ (Ethical

Ethical consumption worldwide gained traction in the 1980s and continued to gain in popularity at present. This is visibly manifested in the growth of ethical labelling that we often see in supermarkets as consumers demand more standards and information on the products that they are purchasing. As such, this paper examines the effectiveness of this trend in promoting sustainable business practice; it will do so by first examining the reality of ethical consumption today and how it influences sustainable business practice through positive and negative means of effecting change. Second, this paper will look into civil society campaigning as a means of promoting sustainable business practice through regulations; and lastly, explore further on the rise of social enterprise as a manifestation in the growth of sustainable business practice. Figure 1. Note: From ‘Ethical Markets Report 2017’ (Ethical Consumption Ethical Consumption is defined as the, “… the conscious and deliberate choice to make certain consumption choices due to personal and moral beliefs” (Carrigan et al, 2004:401). Fletcher described this as a shift from self-focused consumers towards acquisitive consumers, those with new values (Carrigan et al, 2004). As shown in Figure 1, ethical consumption gained much popularity from 2007 and onwards, with growth of 9% in 2013 and 8% in 2014 to £32.2 billion (Antoni and Liu, 2018). A study by Boulstridge and Carrigan (2000) found that most consumers claim they are willing to pay a premium for ethical products, allowing ethical companies to charge a premium due to competitive advantage. This competitive advantage will theoretically give ethical companies the edge over their competitors to capture more of the market. Data above shows encouraging news for the ethical market, but recent studies have shed a different light on the reality. Bray et al (2011) found that although in the UK more than 33% of consumers described themselves as ethical consumers, ethically accredited products only make up to 1% to 3% of the market. This is named by Cowe and Williams as the 30:3 phenomenon or ethical purchasing gap (Bray et al, 2011). Although the ethical market of £32.2 billion may seem large in absolute terms, it is still a relatively small figure as it only represents 6% of the overall £600 billion consumer market; there is still a lot of room for the ethical market to grow. The ethical purchasing gap and the current ethical market is examined, because the following conclusions on the effectiveness of ethical consumption on sustainable business practice assumes that ethical consumption is a large enough driving force towards firms. Bray et al (2011) conducted research into the factors impeding ethical consumption to explain the phenomenon. Their research suggests that people actually care more about their own financial situation than ethical views. As one participant noted, “I don’t… consider ethical products in a supermarket because it is a bill you pay weekly and you need it to be as small as possible” (Bray et al, 2011:601). The Cone and Roper study found that, “Although the respondents had socially responsible attitudes, only 20% of them purchased something in the last year because the product was associated with a good cause” (Boulstridge and Carrigan, 2000:359). Bray et al (2011) explained how due to the limited tangible reward that consumers receive when paying a premium for ethical products, consumers are less incentivised to purchase ethical products. The study suggests that economic conditions also remains a large factor to affect ethical consumer spending. This finding is in-line with the figures referred back to Figure 1, it is seen that the value of ethical market only fell from 2007-2008. At the same time as the financial crisis. Thus, reinforcing the view that consumers care more about finance than ethics in purchasing decisions. Other factors found by Bray et al (2011) to inhibit ethical consumption are quality and brand allegiance. The ethical purchasing gap may seem to be a hurdle for ethical marketers, but this should be seen a opportunity instead. There is still potential room for the ethical market to grow, by converting those who claim to purchase ethically to those who actually do. Ethical consumption is manifested in mainly two forms, positive through preferential consumption of ethical products and negative through boycotts of unethical products. Boycotts and buycotts can place a considerable impact on the corporations as a lot of firms rely on consumer spending as a source of income, and thus should be able to effectively promote sustainable business practice. A study by Pruitt and Friedman (1986) found that “consumer boycott announcements are followed by statistically significant decreases in stock prices for the target firms” (Antoni and Liu, 2018). Even in the current form of the market where the ethical purchasing gap exist, boycotts are still able to influence the values for firms in the market. A study by Sharma and Henriques (2005) on the Canadian forestry products gave insight that the demand for information by customers had a significant positive impact on the recirculation sustainability practice. However, it begs the question whether the drive for businesses to implement sustainable practice is due to ethical reasons or reasons so that they are not viewed as unethical. It is concluded that consumer ethical purchasing behaviour is effective to promote sustainable business practice; with more room for the ethical market to grow, ethical consumption may, in the future, play an even larger role in promoting sustainable business practices. Civil Society Campaigning Civil society is most often referred to as the political space where rules, policies, and norms are continuously shaped by non governmental institutions for the betterment of citizens. In the case of the sustainable business practice, the results from civil society campaigning manifests itself as non-governmental institutions lobbying for sustainability regulations on firms. Taking example from the forest product industry in North America, results from civil society campaigning is manifested in the form of licenses to operate, certification standards, Toxic Release Inventory (TRI) public database, and end-of-pipe pollution controls just to name a few. These licenses, standards, and pollution control are lawfully binding to companies so effectiveness is guaranteed, but does come at a cost. These end-of-pipe pollution controls that businesses have to implement came at a hefty cost to firms. A phenomenon observed by Sharma and Henriques (2005) is that as a result of these regulations, many firms redesigned their business process to minimize the pollution and wastes that the process generated. This was because the firms realized that it was cheaper to redesign the process to meet the regulation requirements rather than to keep the current process and add a end-of-pipe pollution control (Sharma and Henriques, 2005). This finding not only suggests that civil society campaigning is an effective mean to force businesses to implement sustainable business practice, but also to promote a more efficient sustainable business practice. In this way, firms in the forest product industry end up using less resources overall to produce less emissions, improving overall welfare. Civil society campaigning is a different dimension of solution to promote sustainable business practice, that above of ethical consumption. It is because firms are further encouraged to find more efficient sustainable business practices when they are forced within the constraints of regulations. However, along with a new dimension, civil society campaigning also introduces more complexities. While ethical consumption is a collective action, civil society campaigning is not necessarily so. The regulations and standards as a result of civil society campaigning are decided as a result of a political process. Implicit to politics are the different powers at play. Then begs the question of which powers pushed for the regulations. Subsequently, the integrity of said regulation are questioned; Are they truly for the betterment of society? Critical social theory continually seeks to question which party benefits from the event. This opens up a door into the possibility where although in theory civil society campaigning is intended to promote sustainable business practice, it may not necessarily be so in practice.Social Enterprise With the rise of ethical consumption and civil society campaigning in recent decades, social enterprise is also a growing force in recent decades to promote sustainable business practice.The rise of social enterprise is an alternative mean to promote sustainable business practice, it is a factor not to be ignored in promoting sustainable practice. Civil society is not only restricted to the rules, regulations, and policies but also include norms such as the rise of social enterprise. Social enterprise started gaining traction in the 1980s in the U.S. and in the 1990s in Europe (Kerlin, 2006). It is no coincidence that this trend runs in parallel with the timeline of ethical consumption and civil society campaigning. This is because as ethical consumption and civil society gains acceptance worldwide, thus the philosophy of sustainability emanates to current and future business leaders. Social enterprise movement is defined as, “… the use of non-governmental, market-based approaches to address social issues” (Kerlin, 2006:247). Social enterprise are a different breed of businesses where the main objective of the business is not to only maximize profitability but is also accompanied with various social objectives. Social enterprise first gained momentum due to the cutbacks from government funding on non-profit organizations; Social enterprise was a innovative way in solving the funding problems of non-profits (Kerlin, 2006). Now though, social enterprise represents an entity where the objective of sustainable business practice is not second to maximizing profits. “… the advanced sustainability practices are voluntary initiatives, which tend to be long term in nature” (Sharma and Henriques, 2005:174). Social enterprise will be able to better plan sustainability initiatives than traditional businesses imposed with regulatory means. As such, this paper places social enterprise in the third dimension, that above of civil society campaigning. This is all in theory though, as in practice social enterprise still do face a plethora of obstacles. The first threat to social enterprise questions how social enterprise can realistically be at a scale large enough to make an impact when their market is still insignificant. Ethical purchasing gap demonstrates that although there may be widespread interest in the ethical market, the actual market for ethical consumption is still very small. This can be a potential for social enterprise to grow and eat into the total consumer market, but the reality is that this market is not growing as fast. Second, as profit maximization is not the sole objective of social enterprise, how can they compete with the traditional businesses in the market? Other businesses will be better able to cut costs and grow faster than social enterprises, thus leaving social enterprise in the dust in the long term.This paper proposes a framework to categorize the effectiveness of the 3 aforementioned tools in promoting sustainable business practice. At the bottom is ethical consumption, capable of promoting sustainable practice as firms will employ said practice to satisfy the demands of the consumers. At the second level is civil society campaigning which is capable of what ethical consumption could achieve, but further promotes more efficient sustainable practice. At the top of the framework is social enterprise which includes the effectiveness of the tools below it, but allows the business to plan more advanced sustainable practice for the long term. In theory, as we go up the framework, the tools are more effective in promoting sustainable practice; However, at the same time more complexities are introduced. In conclusion, this paper has explored how ethical consumption and civil society campaigning are very effective tools to promote sustainable business practice on paper. Reality, however, presents a plethora of inhibiting factors which questions the effectiveness of said tools. Ethical consumption faces the 30:3 phenomenon inhibiting ethical attitudes to translate into ethical purchases. Social enterprise campaigning while proved to be very successful at promoting more efficient sustainable practices, has its integrity questioned by critical social theory. Finally, this paper presents social enterprise as a third tool in affecting sustainable practices, a phenomenon which has simultaneously developed with ethical consumption.