For years, individuals and societies around the world have been waking up to the need to bring a conscious and considerate eye to the way we grow, manufacture, market and consume everyday goods. It’s one of the driving motivations behind movements like radical municipalism, as splendidly demonstrated through the Japanese cooperative Seikatsu, which has been organizing the purchase and sale of healthy milk across Japan for decades.
While social movements like this one are rising across the globe, organizations typically focus on their own local areas. Another commercially conscious global movement that has exploded in both attention and popularity in recent years is fair trade, and it's worth exploring how the movement is impacting and influencing corporations today.
The essence of fair trade
Giving a brief explanation of fair trade is a good starting point to better understand the ways this movement is influencing the corporate world. At this point, “fair trade” has become a bit of an umbrella term. In essence, it consists of an international movement that incorporates principles – especially related to business – which take into account the conditions of disadvantaged individuals participating in the production of goods.
As a point of reference, the fair trade market generates a robust $6.4 billion globally on an annual basis, affecting the lives of more than 1 million workers. In other words, the socially conscious movement has taken hold of a significant audience on a global level.
The stereotypical image of a fair trade laborer is a poor coffee farmer in a country like Columbia. But the concept stretches far beyond a respectfully brewed South American cup of joe, and includes the production of food, textiles and goods the world over. That means both the farms and the supply chain that manufactures and delivers the goods – not just the goods themselves – are taken into consideration.
Factors that apply to typical fair-trade standards include the health, independence, economic stability and general human rights of the underprivileged workers at the bottom of the food chain. Sustainable, environmental concerns can also often play a part, although the emphasis tends to stay on the commercial side.
This set of fair trade standards typically has the greatest impact in war-torn and developing countries. However, there's an auxiliary area that tends to bear fruit as well: within the corporations themselves. Fair trade encourages for-profit focused businesses to work toward socially, economically and environmentally conscious efforts.
The corporate story of fair trade
Corporations that invest in fair trade practices tend to exhibit a couple of different business models that are growing in popularity. The first is corporate social responsibility (CSR), where for-profit businesses make an effort to affect positive societal and environmental change.
Philanthropic efforts of CSR have been around, in one form or another, for ages. However, it has been bolstered in recent years by the newer concept of "conscious capitalism," rooted in the process of conducting business itself rather than the proceeds that come from it. A company adhering to a conscious capitalism business model will go out of its way to remain aware of the effects of its business decisions, taking social responsibility, self-awareness, and purposeful decision-making into consideration in its operations.
One expression of conscious capitalism is the practice of corporations striving for sustainable practices within their own supply chain. The concept of a socially conscious, sustainable supply chain is steadily becoming a prerequisite for success. Political and social forces continue to draw an increased amount of attention to the journey a product takes from farm to table, along with the impact that process has on resources, emissions and the rest. This puts pressure on companies to tend to that journey with an eye towards sustainability and humanitarian awareness.
Companies have responded to this pressure in various ways. Walmart has committed to purchasing $250 billion in U.S.-manufactured goods through 2023 in order to source its products more ethically. Ben and Jerry’s has steered into the idea of “linked prosperity”, meaning that those who have found success should help to improve the world around them.
All of these examples of conscious capitalism emphasize the primary purpose of fair trade in the corporate world. It’s not just about one part of the business process: it’s about the process from start to finish. As explained by the World Fair Trade Organization, fair trade encourages companies to develop their business model with the idea of “building an entire business around a social mission.”
In other words, the concept isn’t designed to provide another set of hoops for businesses to jump through. The truth is, businesses will always care about profits. It’s part of why they exist. However, encouraging them to develop a model of behavior and practices that prioritize the economic, social and environmental conditions of those they interact with is a huge step up from the business practices of the past.
A glimmer of hope
Fair trade is a breath of fresh air in a world where deals like the TransPacific Partnership, and NAFTA before it, pushed for open, often destructive free-trade policies that could sidestep laws and local regulations. The higher-minded, global concept of fair trade encourages corporations to take a conscious, thoughtful approach to their business practices.
The world consists of an increasing number of aware consumers who are willing to reward this socially conscious behavior by patronizing the companies that are willing to adhere to fair trade standards. While this minor revolution in corporate motivation may only be a glimmer of hope, that glimmer is worth highlighting in the sea of corporate greed that surrounds it.
