World Fair Trade Day falls on 14 May in 2016. The increasing importance of Fair Trade in business and consumer decision making is part of the wider awareness of the roles that Business Ethics and Corporate Social Responsibility should play in the 21st Century business world.
Business should be more than just achieving a set of quantified objectives. Clearly profitability is important; an unprofitable business will not survive in the long term. But hopefully we would all agree that integrity should come before profit; though equally we should remember that integrity need not come at the expense of profit. There are multiple studies that have shown that in the long term an ethical business can actually be more profitable. (Here is just one, written ten years ago: Building Customer Value and Profitability with Business Ethics). Business ethics and profitability can co-exist very comfortably.
But as I said at the outset, this is not just about the numbers. Employees of a company are more likely to get enthused by a business goal that includes elements of Corporate Social Responsibility (CSR) rather than just a profit goal. Susan Cooney, founder of crowdfunding philanthropy platform Givelocity, said that a company’s CSR strategy is a big factor in where today’s top talent chooses to work. “The next generation of employees is seeking out employers that are focused on the triple bottom line: people, planet and revenue.”
There are three main areas or types of CSR:
- Environmental: A great example here are corporate efforts to reduce their carbon footprints.
- Philanthropic: Businesses also practice social responsibility by donating to charities. It does not necessarily need to be a monetary donation. Companies and their employees can donate their expertise or time. Businesses have a lot of resources that can benefit charities and local community programs. Habitat for Humanity with which we are involved is another good example.
- Ethical labor and supplier practices: The last of the three core areas brings us back to Fair Trade (“Finally” I hear my readers mumbling!) Treating employees and suppliers fairly and ethically, enables companies to demonstrate their Corporate Social Responsibility.
So let’s get back to World Fair Trade Day. The World Fair Trade Organisation (WFTO) defines Fair Trade as:
“…. a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade……[Organisations] backed by consumers, are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.”
The WFTO lists ten principles of Fair Trade. I will only cite four here which particularly resonate:
- Creating Opportunities for Economically Disadvantaged Producers
- Payment of a Fair Price
- Ensuring Good Working Conditions
- Providing Capacity Building
If more companies actively followed the principles of World Fair Trade Day, just imagine what could be achieved!
The really powerful thing here is that we can apply the principles of Fair Trade (and the wider areas of Corporate Social Responsibility) both in our corporate rolls and as individual consumers.
That is something we should all remember on World Fair Trade Day and indeed any other day!