For me an ethical Christmas is one that goes beyond presents, but I haven’t managed to convince my big family, so I try the small steps approach
It should be about getting together and sharing some quality time with family or friends. I was reading about this Icelandic tradition of giving books on Christmas eve and then spending the night reading from them I find it charming. Now imagine those are second hand books from Oxfam or some dear book from your private collection that you think someone else would appreciate just as much.
I also think giving experiences rather than material gifts is better. However, if one does buy a material gift, it should be something the other really needs (carefully sourced, obviously :D).
Also, secret Santa could be a good start for downsizing, using our imagination more, and wasting less. You give an insignificant budget and pick the person. You can add other rules too, like buy independent, organic, local, etc. It depends. Even finding/making/buying the present can turn into a playful experience.