Business policies between fair trade and sustainability

Business policies between fair trade and sustainability

March 16, 2018

Business policies between fair trade and sustainability

Researchers at the University of Stanford have analyzed in detail the environmental and social sustainability strategies of hundreds of companies, discovering some limitations which are not always obvious to the consumer's eyes.

Fair trade bananas, chocolate produced in respect of the rights of local farmers or fish caught in a sea-friendly way. But that's not all. There are T-shirts made with only cotton grown using sustainable methods or wooden products made without damaging forests. It is possible to combine business policies with environmental friendliness and the rights of manufacturers and workers, but the extent to which companies follow these good practices still needs to be established. This has been calculated by the authors of a piece of research published on the PNAS magazine, which analyzes the strategies of a large number of companies in depth, bringing to the light certain aspects which consumers know little about.  

Sustainable, but not too much

Some of the data obtained by the US researchers provide food for thought on the real impact of the various business production and distribution plans regarding sustainability. 


Of the 449 companies taken into account, 52% used at least one sustainable strategy, but in almost all cases, the strategies were not implemented through 360 degrees. Indeed, 71% of these practices only referred to one or a few materials in the production and distribution chain and in 60.5% of cases, it was the first link in this chain. So it might be the case for instance that a company follows sustainability practices solely for its packaging and not for all the other components of the supply chain. “In addition, what is frequently the case is that companies follow the road to sustainability only for one or for a handful of products” write the authors of the research, recalling also that in the majority of cases the focus of companies who declare fair trade policies is not really aimed at the environment, but rather at guaranteeing the rights of workers and of small manufacturers and the abidance of local laws. “Other significant aspects tied to the United Nations' Sustainable Development Goals such as health, education, gender, climate change and energy rarely constitute the focus of their evaluations” claims the article. 

One trademark, one guarantee

Who decides whether a product is genuinely fair trade and therefore generated and distributed in pursuit of the utmost environmental and social sustainability? The most popular certification, which is found in more than 50 countries, is the international registered trademark owned by Fairtrade International (FLO), a no-profit association made up of several members who together develop and periodically review the fair trade standards, helping manufacturers wishing to receive and retain the certification and dealing in best exploiting market opportunities. To obtain the Fairtrade trademark (the black outline of a person with their right arm raised, on a blue and green background), a product needs to be checked and certified by the FLO-CERT organization, an independent body linked to Fairtrade international in charge of ensuring the fair trade standards are met. 

(Positive) pressure from the outside

The world production and distribution supply chains play a primary role in the environmental and social challenges identified by the United Nations and described in the 17 Sustainable Development Goals. “The supply chains linked to major multinationals constitute 80% of trade at global level and they involve one in every five workers; consequently their contribution is vital to achieving these goals” state the experts from Stanford who in their research also assessed certain social aspects tied to the sustainability policies implement by the companies involved in the study. The analysis shows that the voice of citizens and non-government organizations counts for a lot. This is true especially for bigger concerns and with a famous brand, which under the pressure of civil society or of specific organizations focused on the environment and on human rights are more likely to implement sustainability strategies in the production and distribution chains of their products. 

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