Today we’ve published the 2024 Good Report, an annual report from In Good Company designed to provide insights into the current landscape of sustainable living, support for ethical small businesses, and the impact of the cost-of-living crisis on this sector and consumer behaviours across the UK. 

Perhaps unsurprisingly as times continue to be really tough for individuals and small businesses alike, this year’s edition focuses heavily on the challenges ethical businesses and people are facing when it comes to sustainability and more ethical living. 

Drawing from surveys and conversations with ethical businesses and consumers, we share insights into how ethical businesses are navigating 2024’s landscape. So, grab a brew, and read on to discover what we learnt…. 

The ongoing impact of the cost of living crisis

In last year’s inaugural Good Report, we heard loud and clear the detrimental effects the cost of living crisis was having on the growth and profitability of ethical businesses. And unfortunately, this hasn’t improved. In fact, this year, 58% of businesses report that customers are spending less — up from last year’s 39%. Additionally, 57% of consumers we heard from stated that the crisis has altered their purchasing habits when it comes to ethical or sustainable businesses. 

Despite these challenges, there is some comfort to be taken in the fact that people appear motivated to act sustainably when possible, such as purchasing their clothing secondhand and booking more sustainable travel. While high-cost, more desirable sustainable options — like purchasing an electric vehicle — are out of reach for now, consumers are still doing what they can to adopt sustainable practices. 

However, many said that they are simply unable to live as sustainably as they would like, with one consumer saying, ‘Sometimes I just don't have enough money to make the purchasing decision I wish to.’ Another consumer added that ‘I would love to buy all organic, fair trade, local and seasonal food - but sadly my weekly shop is already more expensive, so we're now having to choose which food items to prioritise buying organically.’ Doing what they can, with a strong desire to do more, is a central theme shared amongst surveyed customers.

The conscious consumer is evolving — motivated by climate concerns, cost savings, and a desire for meaningful change. 

Bridging the gap

For ethical businesses, the path forward is equally demanding. Growing their customer base remains their number one priority. A key takeaway from the Good Report is that building visibility is essential for ethical businesses; social media plays a central role in this effort. More than half of consumers who are interested in ethical businesses rely on organic social media discovery rather than active research. Yet we know many report social media is proving less effective as a channel. With the average consumer having over 7 social media accounts, managing a marketing strategy is becoming increasingly difficult (Forbes, 2023). They need new ways to drive word of mouth and reach new customers. 

Beyond social media, ethical businesses are setting themselves apart through distinct storefronts, high-visibility signage, and participation in local events. These efforts make it easier for customers to identify and engage with these businesses, as when asked ‘If there is a difference in the difficulty of finding physical compared to online ethical businesses,’ 72% of customers found physically identifying ethical businesses to be more challenging. 

Consumers also depend on word of mouth recommendations, which ethical businesses can use to expand their customer base. Verbal advice from friends and family accounts for 56% of advice given regarding environmental sustainability, more than social media influencers or news outlets. In order to expand their reach, ethical businesses need to adapt to changing channels of advice. 

Size Matters

Similarly to last year, people value local small businesses. 98% of respondents believe that small businesses play a significant role in improving their local community and 62% believe it's important that the businesses they shop at are ethical. 

This aligns with business’s perception, 41% of them believe their mission matters ‘significantly’ to their customers, and 48% believe it ‘somewhat’ matters. This suggests that it is crucial for businesses to keep promoting their mission, though of course the product or service they are delivering needs to be the right quality too!

And when it comes to ethical and sustainable claims, whilst 24% of respondents don’t tend to trust them (perhaps unsurprising given the rise in greenwashing), the majority are more likely to trust small businesses. Awareness amongst the general public of certified accreditations might be low, but to the conscious consumer, they matter. Certified businesses agree - 81% think it increases trust. 

Support systems

As we reported last year, business networks provide crucial support for ethical business owners, with most surveyed businesses finding that resources and mentorship from these networks are extremely valuable. Ethical suppliers are another critical resource, though they are often harder to find, as only 37% of surveyed businesses reported knowing where to find equally matched sustainable suppliers. 

In contrast, ethical businesses report that government support is lacking. Ideally, they want to see financial barriers addressed by the government. Grants and incentives could help small businesses grow their reach and product ranges. 67% of businesses ‘support grants or subsidies for ethical and green businesses,’ which would ease the financial barriers associated with owning a small business. 

More broadly, the current political climate is impacting small businesses, with one owner characterising this as a time of ‘Uncertainty, reduced disposable income, gloomy mood.’ Operating an ethical business is becoming increasingly difficult — governmental support is a vital element to sustaining your favourite small business. 

The bottom line

As the cost of living crisis persists, it’s essential to ensure that ethical choices are convenient and accessible. By increasing both their online and physical presence, ethical businesses can thrive. This is why In Good Company was established: to help everyday consumers connect with ethical businesses nearby, leveraging the power of technology and local visibility. 

As we reflect on the challenges and triumphs of the past year, it’s clear that while the world continues to face unprecedented economic and environmental pressures, the role of ethical businesses is more crucial than ever.

It's often easy to feel like you can’t make a difference, but the small actions really matter. Let this report be your rallying call. Supporting the local businesses who are working tirelessly to benefit people, planet and community is a great place to start.

You can read the full report here. And if you want to get the latest news, updates and good business recommendations straight to your inbox, sign up to our newsletter here.

Data was collected from 26/06/2024 to 24/07/2024 through two questionnaires distributed to members of our network. One survey was designed for consumers, while the other targeted small, self-identifying ethical businesses. The data was then reviewed to ensure the integrity of responses (i.e. no duplicate responses or randomly filled surveys). Google Sheets was used to conduct the remaining analysis and to compile the findings. Other works and publications are cited within the report. 

We couldn’t be more grateful to the author of this report, Maria Delgadillo Jimenez, who also designed the surveys and conducted all the data analysis. Maria is currently studying her BSc Data Science at the London School of Economics and Political Science (LSE). She is the Head of Events for the LSESU Data Science Society and Student-Staff Liaison Committee Student Rep for Data Science. She interned with In Good Company in Summer 2024.