Over the past two years, expenditure on ethical food and drink has increased by 27% to reach £6.5bn, representing 8% of all food and drink sales.
Fairtrade products were the big winners, with products growing by 64% to reach £749m, while sales of animal welfare Freedom Food-certified products have tripled in the past two years to reach £122m. Sales of organic food, however, fell by 14% to reach £1.7bn.
The Co-operative Financial Services chief operating officer Tim Franklin said the report would "come as a surprise" to those commentators who thought ethical considerations would be the first casualty of an economic downturn.
However, he added: "While the rapid growth in areas such as Fairtrade and ethical finance, which we have witnessed in previous years, continues, other areas such as micro-generation and renewable electricity have unfortunately failed to make significant progress."