Current Corporate Trends in Fair Trade

For years now, individuals and societies all over the world have been waking up to the need to bring a conscious and considerate eye to how we grow, manufacture, market, and consume the goods we use in everyday life. 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 selling of healthy milk across Japan for decades.

corporate fair trade
This Indonesian coffee farm adheres to fair trade labor and environmental practices. Credit: andreaswegelin, Pixabay

While social movements like this 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. Let’s explore how this movement is impacting and influencing corporations today.

The Essence of Fair Trade

A brief explanation of fair trade is a wise starting point in order to better understand the ways that it is influencing the corporate world. At this point, “fair trade” has become a bit of an umbrella term. In its essence, it consists of an international movement that incorporates principles — especially as related to business — that 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 over 1 million workers in the process. In other words, the socially conscious movement has certainly taken hold of a large audience on a significant level.

While the stereotypical image of a fair-trade laborer is a poor coffee farmer in a country like Columbia, the concept stretches far beyond a respectfully brewed South American cup of joe. It 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 themselves are taken into consideration.

Factors that come into play with 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 be on the commercial side of things.

This set of fair-trade standards typically has the greatest impact in war-torn and developing countries. However, an auxiliary area that tends to bear fruit is within corporations themselves. This is a bit unique when compared to many of the social movements of the modern day, as fair trade encourages for-profit focused businesses themselves to get in on socially, economically, and environmentally conscious efforts.

The Corporate Side 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). This is the concept of for-profit businesses making an effort to effect positive societal and environmental change.

The philanthropic efforts of CSR have been around in one form or another for ages. However, it has been bolstered in recent times by the newer concept of conscious capitalism. This is 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 decision, taking into consideration social responsibility, self-awareness, and purposeful decision-making 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 it has on resources, the environment, etc. This naturally puts pressure on companies to tend to that journey with an eye towards sustainability and humanitarian awareness.

Many 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 their products more ethically. Ben and Jerry’s has steered into the idea of “linked prosperity” meaning 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 around 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 that they interact with is a huge step up from the business practices of the past.

A Glimmer of Light

Fair trade is a breath of fresh air in a world where things like the TransPacific Partnership deal are pushing for open, often destructive free-trade policies that can 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 absolutely worth highlighting in the sea of corporate greed that surrounds it.