Australians are used to getting out and casting their vote every few years in accordance with what they think is right. But increasingly, it seems they’re using their wallets and credit cards to drive their ethical decisions.
A recent report from IBISWorld has revealed that Australians are shifting their spending habits in accordance with growing consumer awareness around farming processes. The production of free-range eggs in Australia has jumped 15.1 percent over the five years to 2014-15, according to the data, despite their higher cost.
“These consumers have no choice but to accept the price jump — and often, they are more than happy to do so, as they feel the increase is justified,” said Brooke Tonkin, IBISWorld industry expert.
How else can Australians use their spending to flex their ethical muscles? And what kind of effect might it have on their savings accounts?
The cost of ethical spending
Consumers can choose to ethically spend their money on a dizzying array of products nowadays. Much like ethical investing, the idea is for consumers to vote with their dollars in order to drive the kind of changes they want to see happen — as well as feel better about their lifestyle choices.
This might mean buying organic food, where animals have been treated humanely and products have not been made using chemicals. It might also mean purchasing electronics or clothing that is not associated with exploitative labour conditions. Or It might mean purchasing electric or hybrid cars instead of bigger petrol guzzlers.
At the same time, products such as these tend to hit heavier in terms of the price tag. According to UK-based, non-profit organisation Ethical Consumer, ethical versions of products such as clothing, phones, MP4 players and cameras are all more expensive than their regular counterparts.
Of course, the point of such products isn’t to save money. But it does indicate that consumers who choose to spend this way need to be more careful with their finances.
Green home (loans)
One ethical option that has cropped up in recent years is known as the green home loan. It originally started out as a government programme offering interest-free loans to help install energy efficient, solar power and water saving features into homes.
Although the scheme came to a close, a number of home loan providers, such as LCU, Bendigo Bank and Community First Credit Union continue to offer green loans. Such loans can be used to finance the installation of insulation, double-glazed windows, wind turbines and all manner of other features.
For the ethically minded, it may be a product to look for next time they carry out a home loan comparison.
Going ‘green’ could even add value to your home, according to research.
With electricity prices and other costs of living on the rise, improving your property value is just one more motivation to take up renovating.
A report by the Australian Bureau of Statistics studied the sale prices and eco ratings in the Australian Capital Territory – it found that if you’ve got two houses on the market that are almost identical except for their energy ratings, the house with the higher energy efficiency rating will command a higher price.
So how green are you?