Should Your Business Adopt Fair Trade Practices?
"Sustainability," "green business," "social consciousness," "environmentally friendly" and "corporate social responsibility." What do those words and phrases mean to you?
If you’re a business owner, they should mean a lot.
Socially conscious customers want to do business with companies who "fight the good fight." This “fight” means taking steps to protect the environment and being a company that reaches out with the proverbial hand to help mankind.
In a 2013 Cone Communications/Echo Global CSR Study, 87% of respondents say that they consider corporate social responsibility when they decide where to shop. The study also found that 96% of global citizens have a more positive image of a company if it supports social or environmental issues, and 91% are likely to switch brands to one that supports a good cause if the price and quality of the brands are similar.
One practical way for a business to demonstrate its commitment to these ideals is by making their business practices consistent with fair trade principles. There is no one governing body or list of requirements to operate a fair trade business, but most businesses that implement fair trade practices aim to foster better living conditions and sustainability for everyone employed and affected by their supply chain, including every place that their supply chain comes across.
Considering what is required, can fair trade practices work for your business? Read on to find out.
What Is Fair Trade?
Fair trade establishes practices for businesses that are based on the principles of social and economic justice. Fair trade ensures that farmers, artisans and workers (producers)—especially those in developing countries—can build sustainable businesses and are justly compensated for their work. While this concept can be applied to a number of goods, the movement has historically focused on producers of goods like coffee, fish and other foodstuffs.
Fair trade producers learn and implement environmental and sustainability practices, and they are sometimes certified by a fair trade organization to ensure that they maintain compliance. These producers implement and do business with other organizations that maintain fair wages and treatment of their workers. Businesses that buy products from certified producers benefit from the certifying organization’s branding campaign and pay a small premium over market prices to do so. Because of this, producers and their families—including women—usually see an improved quality of life and gain access to doctors, medicine, proper nutrition and credit. A portion of the revenue can also go toward building schools and maintaining student enrollment.
Businesses that engage in fair trade practices offer those producers better financing, transparent pricing, a long-term business relationship and an implicit respect for higher labor safety and environmental standards. Furthermore, fair trade businesses follow the guidelines set by theInternational Labour Organization concerning child and forced labor.
Fair trade aims to transform entire marginalized communities by pulling people out of poverty with higher wages and an affirmed respect for the producer’s community and livelihood.
Becoming Fair Trade Certified
To attract customers, you need to show them how you are taking a standagainst environmental destruction, poverty, abuse and more. They want more than just your word. One of the best ways to do that is to become known for your fair trade practices and to become fair trade certified.
You can be part of the solution by becoming fair trade certified through Fair Trade USA. Fair trade standards vary slightly depending on your product category, but most will need to follow these steps in order to gain certification:
- Use only fair trade products and ingredients. To earn a license and use the Fair Trade Certified™ label on your products, you must buy all of your ingredients or products from a certified farm or organization. You can find a list of Fair Trade USA farmer groups and suppliers on the Fair Trade USA website. You can also register your existing supply chain by connecting your suppliers with Fair Trade USA. Your suppliers will have to complete a certification process and undergo an on-site audit.
- Prepare to be transparent. You will need to agree to a detailed supply chain audit. In addition, to maintain your certification, you must report your purchases and sales.
- Register your company online. Once you have confirmed that you qualify for fair trade status, you need to complete a registration form online. Fair Trade USA will send you a contract, and then you will receive your ID.
- Register your products. Check the Fair Trade USA website to confirm that you are compliant with the Multiple Ingredients Product Policy, and work with your account manager to complete your Product Profile Application.
- Register your packaging. Upon completing your registration, you will need to review the Label Usage Guide to determine which label to use. You can request design files or product stickers so that you can create a mock-up of your design. You're then required to submit PDF drafts of your packaging to your account manager in order to gain approval before you print anything.
You will also be subject to some fees, which can vary from business to business. Learn what those are by contacting Fair Trade USA directly. Fair Trade USA’s Certification Manual also gives a general overview of prices and helps with the entire certification process.
While it might seem like too much work or hassle to become certified, once you are, you and your employees can feel good about the positive work you are doing. That is a huge morale and productivity booster in and of itself. But by marketing and increasing your sales to socially aware customers, practicing fair trade can bring a major boost for your business.