The Illusion of the “Ethical” Label

What “Ethical” Really Signals

We want to believe in ethical products.

We want to trust that “ethical” means justice — that a company selling goods labeled as ethically produced is uplifting workers, paying fair wages, and protecting human dignity. We hope that when we buy something labeled ethical, we are voting for a better system, not just consuming another product.

But that hope is increasingly a marketing signal, not a guarantee.

Today, anyone can put the word “ethical” on their packaging. Unlike regulated terms like “organic” or “Fairtrade,” ethical is not a legally defined, enforceable standard. There is no global legal definition that ensures a product labeled ethical actually meets rigorous labor or environmental conditions.

These labels are meant to comfort us — but without clear benchmarks, they can be almost meaningless. Some companies craft their own ethical labels so they control the story, not independent auditors.

Made in a third world country - what this usually means

A company can claim ethical production while having its products manufactured in places like Thailand, Vietnam, or India — countries where global supply chains rely on rock-bottom labor costs to remain competitive. In many of these countries, minimum wages are far below living wage levels, and working conditions may not meet what people in wealthy countries would consider humane.

For example:

• In Vietnam, the legal minimum wage is often around half of what independent assessments estimate as a living wage.

  
  

• In parts of India, exploitative systems such as the Sumangali labour practice (also known as child labour) still surface in textile and garment supply chains.

  
  

These realities don’t disappear just because a product gets a pretty label.

Cheap Labour, Premium Prices

Here’s the paradox: products made with the lowest production costs are often sold at premium prices to consumers in “ethical” markets — Western Europe, North America, and other wealthy regions. That price premium is not necessarily redistributed to the workers who made the goods. Instead, it often pads the brand’s margin or covers marketing costs.

Meanwhile, the people making the products — the people the label implies benefit from “ethical” production — are paid so little that they often cannot support basic living needs.

When Ethics Becomes a Certainty Without Evidence

The industry is flooded with labels that sound like proof but are not:

• Brands create their own internal ethical badges.

  
  

• Certifications vary wildly in rigor and enforcement. Some are strict, some are voluntary, some have loopholes that allow exploitation to persist under the surface.

  
  

• Supply chain transparency is often incomplete — meaning the label may reflect the company’s intentions, not reality.

  
  

In other words, “ethical” on the front doesn’t always correspond with ethical conditions at the source.

A System Designed for Confusion

This is not accidental.

Brands respond to market demand for ethical goods — demand that has grown strongly in recent years. Surveys show a large share of consumers are willing to pay more for products that guarantee worker safety and no child labour.

Yet this demand collides with vastly unequal global supply chains, where billions of dollars of economic activity still rests on labour markets with minimal protections. Without enforceable global standards or transparent third-party verification, ethical becomes a story you tell, not a truth you prove.

Damage Done

Consumers pay more for a sense of integrity. Workers get less than a living wage.

And major companies claim moral high ground while protecting systemic inequalities.

This dynamic erodes trust. Studies show a huge share of environmental and ethical claims are misleading — in some sectors, over half of claims do not hold up under scrutiny.

We want ethical labels to mean something. But in a world where they are largely unregulated, the word  becomes a cloak for profit, not a banner of dignity. Are these companies then sending those profits back to the artisans to improve their living conditions? Are they contributing to organisations that really make a long-lasting impact on that reality?

How We Move Forward

Rejecting ethical labels that aren’t backed by transparent evidence isn’t cynicism.

It’s clarity.

True ethical production can exist — but it requires:

• Independent verification, not company self-certification

  
  

• Clear standards, not flexible wording

  
  

• Living wages and safe conditions at every tier of the supply chain, not just the first or last mile

  
  

• Transparent reporting, not selective storytelling

  
  

Until those conditions are widespread, the ethical label will remain what it has quietly become: a comforting narrative that asks the least of those with the most power.