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Ethical Consumption - MIT & Boston Review - Nov. 3, 2011

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Ethical Consumption - MIT & Boston Review - Nov. 3, 2011

  1. 1. The Promise of Ethical Consumption Dara O’Rourke UC Berkeley and GoodGuide
  2. 2. New Market Dynamics
  3. 3. Failure of Traditional State & Intergovernmental Regulation
  4. 4. Consumers as Potential Point of Leverage over Global Production
  5. 5. Consumers Say They Care…
  6. 6. 76% say they consider environmental and social issues when purchasing.
  7. 7. 73% say they are willing to pay more for green products.
  8. 8. 67% say they have boycotted a company on ethical grounds
  9. 9. Variations of Ethical Consumption
  10. 10. Growth in Ethical Consumption Organic Food: from $12 billion (2005) => $21 billion (2009) Fair Trade: from €200 million (2000) => €3.4 billion (2010) Local Foods: from $4 billion (2002) => $7 billion (2011) Farmers’ Markets: from 1,755 (1994) => 6,132 (2010) Ethical Personal Care: $5.3 billion (2005) => $8.1 billion (2009
  11. 11. Product Introductions with Green Claims 800 Alcoholic Beverages Baby Food 700 Bakery Breakfast Cereals 600 Color Cosmetics Desserts and Ice 500 Cream Dishwashing Number per Year Products 400 Fabric Care Hair Products 300 Non-alcoholic Beverages Paper Products 200 Pet Food Skincare 100 Snacks 0 Soap and Bath 2002 2003 2004 2005 2006 2007 2008 2009 2010
  12. 12. New Businesses and New Business Models
  13. 13. Alta Gracia
  14. 14. Still…a Huge Gap between What People Say and What They Do
  15. 15. Consumers are Constrained by Habit, Status, Manipulative Marketing, and Lack of Information
  16. 16. People Need: Better Information, While Shopping, Showing Impacts of Decisions, Showing People “Like You” Care, Simple, Easy, Empowering, “On Ramp” to Collective Action.
  17. 17. A platform for transparency into the environmental, social, and health impacts of products and companies.
  18. 18. Actionable Information • Summary rating combines health, environmental and social impacts • 0 – 10 scale for ease-of-understanding • Distributional information for quick comparison • Ratings explanations spotlight key indicators driving scores
  19. 19. Science-Based
  20. 20. @Moment of Decision
  21. 21. Social Graph + Interest Graph
  22. 22. Personalized
  23. 23. Shop Online with Your Preferences
  24. 24. Feedback on Your Purchases
  25. 25. Lessons • Changing Consumers is Difficult • Make Visible the Invisible • Show People They Can Have an Impact • Scientific Information Alone Will Not Change Most People • Need to Bring in Behavioral Dynamics • Need to move from Individual to Collective Action • Key Roles for Government & NGOs
  26. 26. Turning Point in Market Transparency and Consumer Empowerment
  27. 27. Ethical Consumption can complement NGO Strategies and Government Regulation
  28. 28. Dara O’Rourke @daraorourke

Editor's Notes

  • Thank you to Boston Review and MIT Political Science Dept. And to all of the respondents. Really unique interaction as an academic,
  • We are at a critical inflection point. Problems are mounting – climate change, biodiversity loss, industrial pollution, cancer rates, human rights abuses, obesity… Consumers are part of these problems…and a part of the solutions. We are entering a new age of more transparent and accountable markets. Consumers can see the impacts of products, supply chains, companies. See the stories behind their products. Cell phones can scan products, access environmental, social, and health information about the product, View live webcams of the factory that made the product, Skype with a worker from the factory, Access information from the NGOs they most trust;Instantly find out if the product passes or fails your screens: buy or not buy a product based on aggregation and filtering of this data through their personal screens, friends’ recommendations, etc.
  • Complex, cross-border transactions; rapid movement between suppliers; and limited transparency have made it virtually impossible for national governments to regulate global production.The U.S. government does not regulate the production methods of global firms operating in other countries (in part because of WTO rules), and the Chinese government has shown little inclination and even less capacity to regulate firms such as Foxconn
  • Original Tea Party…before Glen Beck’s Tea Party…
  • About the products they consume: Where they were made? How they were made? Impacts on their Health? Environment? Workers?More than Brand & PriceIncreasingly cynical about marketing claimsGrowing List of Concerns:Ingredients, Contaminants, Health Impacts, Climate, etc. What goes “In, On, Around” our families.Consumers know more, and share more Sustainability as part of Global Supply Chains
  • How many of You have avoided a company?
  • Over 300 Eco-Logos in the US and Europe.
  • Attitudes-Behavior Gap
  • 25 staff140,000 products12 categoriesEnviro. Social. Health
  • Created a valuable data asset of over 75,000 products.