This article is sponsored by Fair Trade USA.
Each of us in our own way is finally emerging from the pandemic. As we all reclaim our daily lives, we are reminded of the environmental challenges we still face. With that reawakening, conscientious consumers’ appetite for sustainable products is growing once more.
No surprise to any informed citizens of the West, our habits deeply affect the world around us. Yet, education around the causal link between consumer behavior and climate change, global fishery failures, deforestation, land degradation and other environmental concerns for decades neglected or omitted entirely the human producers of our consumer goods.
Every consumer purchase has the power to protect local production environments, and the humans living and working there. Each of those purchases could bring a brand that much closer toward fulfilling one or more of its commitments to the United Nations Sustainable Development Goals (SDGs).
However, until recently, corporate social responsibility didn’t always overlap with environmental regulations. That environmental and social disconnect created inefficiencies, leading to a breakdown in holistic sustainability.
But, there is hope: for brands, consumers, producers and the planet.
Governments, corporations and consumers are beginning to connect the dots between environmental and social sustainability.
Enhancing impact through ESG
The successor to corporate social responsibility merges environmental, social and governance (ESG) to create powerful results.
As Karin Kreider, executive director of ISEAL, said in a recent conversation, "Economic, social and environmental sustainability should go hand in hand. If linking the topics through ESG helps focus attention on these as a combined concept, then it’s a good thing."
Since the term was coined in 2005, its growth has been tremendous. BusinessGreen previously reported on $30 trillion of ESG investments under management by 2019.
While Fair Trade USA believes its work may benefit many SDGs, the six SDGs most directly affected by its work are an equal mix of social and environmental issues:
- SDG 1: No poverty
- SDG 5: Gender equality
- SDG 6: Clean water and sanitation
- SDG 8: Decent work and economic growth
- SDG 12: Responsible consumption and production
- SDG 14: Life below water
The focus on shared environmental, social and governance impacts has delivered benefits not just to investors but also producers and their local environments.
Leilani Latimer, chief commercial and marketing officer at Fair Trade USA, believes what’s most important is how an organization manages and measures ESG and then uses it strategically. Latimer explained further, "by linking investment to impact, and impact to outcomes, organizations can take a longer-term view and see the clear connections between economic, environmental and social sustainability."
Numerous collaborative efforts have emerged as a result of the shift in focus.
As just one example, the interdependency between environmental and social sustainability long evaded seafood consumers and their favorite brands. In 2020, however, an Indonesian fishery became the first in the world to accomplish both Fair Trade Certified and Marine Stewardship Council (MSC) certification.
Fruits of their labor
The results of this shift in focus from corporate social responsibility to ESG aren’t just certifications and feel-good labels.
Underscoring the impact of rigorously applied evaluation criteria and certification KPIs, ISEAL’s Kreider stated emphatically, "A strong integration between company efforts to improve supply chain sustainability and third-party initiatives, such as standards systems or other similar tools, has been proven to be highly effective and connects economic and environmental sustainability."
Through its Impact Management System (IMS), Fair Trade USA’s rigorous evaluation criteria both satisfies consumer demands and delivers benefits to local communities. In order for farmers and fishery producers to maintain Fair Trade Certified status, both the individual producers and sites are regularly audited.
Sarah O’Brien, CEO of Sustainable Purchasing Leadership Council, speaks to Fair Trade USA’s unique and impactful model. "I think one of the best models I have seen for connecting environmental, economic and social impacts is Fair Trade USA’s new impact assessment framework. By leveraging multiple factors that can increase community residents’ well-being to assess the initiative’s success, the system creates drivers for action to create positive benefit on both the environmental and social side of the equation."
Kate Williams, director of impact monitoring and evaluation at Fair Trade USA, leads the team evaluating producers against an extensive list of criteria, which includes items such as "the percent of farmers who are aware of protected areas, as well as the percent of fishers who are aware of how to reduce bycatch." Williams’ team also evaluates each site against an equally lengthy list ranging from "water discharge from operations is discharged in a manner that protects human ecosystem’s health" to "tracking deforestation or degradation of natural forest."
The resulting certification isn’t just a taxing process for local producers.
The prices consumers pay for Fair Trade Certified products include a premium that is then passed on to local producer communities through community development funds (CDFs). These funds are managed by local, elected committees, which disburse the funds to community projects related to education, health and wellness, and environmental conservation.
Solving the struggle to communicate ESG progress
One major pain point for brands today is communicating their progress toward ESG goals. For consumers, that makes it difficult to buy into potentially empty promises.
Fair trade certification is backed by stringent IMS evaluation criteria, and requires consistent contributions to robust CDFs. Both the rigors of certification and the benefits provided to local communities and environments are achievements brands can showcase to consumers.
Being able to demonstrate both social and environmental impact is critical. Williams related a maxim in today’s sustainability sector, that "The ‘Golden Rule’ is you can’t have either/or; you have to have them both. You have to talk about human rights and the environment together."
Certifications that require not just social but also environmental impact empower consumers to confidently pay the premium prices that facilitate brands’ progress toward fulfilling SDGs. Together, brands and consumers can drive change toward a more sustainable future for industry, producers, consumers and the planet.
Click here to learn more about how Fair Trade Certified benefits the planet and people.