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Fair Trade USA Sets Sights on Cotton

Hult Social Entrepreneurship
Hult Social Entrepreneurship | Wednesday May 1st, 2013 | 0 Comments

cottonSan Francisco is a beautiful city with a mild climate year round. Here, there may always be a chill but never a freeze. Yet, for the last five days, the sun has threatened this metropolis with something approaching actual heat. One can imagine the gleeful scramble to absorb these radiant gifts. The polyester and wool layers have been peeled away in favor of something lighter – cotton. It’s the main ingredient in apparel after all. How many of us truly consider what’s gone into that shirt, blouse, scarf, underwear, skirt, or pair of shorts of ours?

A bridge apart – over in Oakland – Fair Trade USA has been addressing fairness in the apparel industry and they have their sights set on “white gold,” otherwise known as cotton. Three years after their pilot program ended, Fair Trade USA certified cotton now accounts for 10 percent of the cotton consumed globally. It’s an achievement, to be sure, but how do we scale that even more?

Of course, criticism and detraction have interwoven themselves tightly into the fabric of Fair Trade USA’s Apparel and Linen initiative. Any claims of social, environmental, and economic equity must attract attention, scrutiny, and differences of opinion.

With all the detractors, few question the organization’s commitment to better working conditions. Recent events in Bangladesh offer a tragic, if not timely, reminder of the conditions that plague garment workers in some parts of the world. Surely, many of us would pay a higher price for our clever logo tee if we could prevent a recurrence of tragedies of this sort. Similarly, many of us would pay a premium if we were sure that a cotton farmer could afford to send his daughter to school. But this all begs the same question. Can Fair Trade USA establish attribution? Can they convince a significant portion of the 76 percent who expressed a willingness to pay more that the higher premium actually makes its way to the cotton farmer? Chain of impact is difficult to establish in the best of social circumstances, to say nothing of doing so in a supply chain as complex as textile cotton.

In our assessment of Fair Trade USA Apparel and Linens, we have identified three main areas of improvement: communication, impact assessment and attribution, and technology.

Communication involves further increasing the transparency of the pilot program. Our first recommendation is a live Fair Trade dashboard. This dashboard would show the key performance indicators Fair Trade uses to assess their impact at different points along the supply chain. Furthermore, the data would be publicly accessible and include each supplier and how they either met or failed to meet the Fair Trade Certification.

Regarding communication of the certification itself, we recommend a tiered certification system. A product that uses 80 percent fair trade ingredients, for example, should not have to accept the same premium as one that uses only 25 percent fair trade ingredients. Conversely, a product that uses only 25 percent fair trade products should not attract the same premium as those that use 80 percent fair trade ingredients or more.

By providing either Fair Trade Gold, Silver, or Standard levels of certification, the incentive to fully integrate the Fair Trade policies into a business increases. It would also increase the transparency of the certification to the consumer.

Impact assessment and attribution is another area that would increase transparency to consumers. Fair Trade Apparel and Linen should enlist an external source to perform a full social impact assessment. This assessment would more clearly describe Fair Trade Apparel and Linen’s impact beyond workers wages to consumers. More importantly, an assessment such as this could measure the amount of change that would not have happened without Fair Trade’s pilot program: for example, is the work being done creating a bigger impact than would have happened naturally?

In order to start moving towards this level of transparency, new types of technology need to be introduced as well. Labor Link, which was used in only one Fair Trade Apparel and Linen pilot, should be used in all certification processes. This technology provides real time data on workers and their conditions.

After all is said and done, we do firmly believe in the mission of Fair Trade USA. We have no reason to doubt the sincerity or validity of their work and we hope that through better communication and transparency, others will join us. But there remains more work to be done and we hope these recommendations offer at least a few discussion points as to how the highly critical and socially conscious can support their mission. We could hope for no more than an organization that can quickly convert better trade into truly fair trade.

By Theresa Hall, Inyoung Hwang, Simona Ioannoni, Juanita Ossa, Niketa Malhotra, Paul Williams. The authors are Master of Social Entrepreneurship candidates at Hult International Business School. 

[image credit: AgriLife Today: Flickr cc]


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