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Help Me Choose

Fair trade - Vs - Sustainability - (and the rest)

The biggest challenge of being an ethical consumer is understanding what is ethical consumerism\u2026Consumers have traditionally looked to Consumer Organisations to provide them with independent comparative and verifiable information on products and services related to safety, performance, quality and value for money, so that they can make choices and purchase with confidence. With globalisation and increased awareness of the impact of trade on both environment and economy, consumers have also become increasingly interested in being informed on the environmental, ethical and social impacts of these products and services, and the businesses that provide them. Consumers International’s studies on, green food claims, the sustainable coffee sector, unethical drug promotion and most recently, ‘What Assures Consumers’ (in collaboration with AccountAbility), all highlight the challenge that consumers meet when trying to decide, not only between so called ethical and unethical products, but the confusion that is caused by the large numbers of logo’s and claims, when distinguishing between sustainable products.A lack of transparency, misleading claims and tokenistic involvement by big players will ultimately turn consumers away from building fair trade from niche market to mainstream, which ultimately consumers want to support. The buying public needs to have the tools available to raise awareness, provide credible information, and to act as watchdog, to support responsible sustainable consumerism.

As ‘choice’ became an issue for consumers in developed countries, independent consumer organisations who tested the products and services that were available, such as Consumers UK, Consumers Union USA, Que Choisir, France and Choice, Australia, became the trusted choice of consumers to find verifiable information on safety, performance, convenience and value for money. With globalisation and increased awareness of the impact of trade on both environment and economy, consumers have also become increasingly interested in being informed on the environmental, ethical and social impacts of these products and services, and the businesses that provide them.

However consumer organisations continue to struggle to find the equivalent tools for comparing ethical behaviour that enabled them to confidently recommend one product over another for performance.

With the sale of ethical trade products growing exponentially each year, the Fairtrade label alone retailing sales of over 2 billion Euro globally and an anticipated growth of 33% annually, it is clear that consumers want to support and build towards mainstreaming ethical trade. However, in order to do this consumers need to have clarity and confidence in the increasing number of claims related to ‘fair trade‘ schemes and labels that are appearing on foods and products in the market place.

On one website ‘ethical superstore.com’ over 150 product manufacturers with between 1 to 50 product lines each, from wine glasses to tables to trainers, all come under the banner of ‘ecofriendly and fair trade products’. For even the socially aware consumer, the challenge of comparing or deciding to support the ethical benefits of purchasing Traidcraft glasses, versus Fairtrade wine from Fairtrade media or a Revolve recycled note book as a gift for your socially aware friend can be a daunting one. Consumers need to be confident that the tee-shirt made with 100% fair-trade cotton wasn’t produced using unfair labour, and that the only thing fair-trade about chocolate covered mangoes, isn’t the 10% chocolate coating.

UK consumers are the largest purchasers of fair trade (ethical) products spending £25 billion on ethical goods and service in 2005. This grew steadily each year until 2010 when for the first time in five years a ‘dip’ in spend occurred as the recession bit into the pocket and disposable income of the British consumer. This consumer interest has been reflected by large companies such as Coop, Marks and Spencer that have transferred all of some of their own brand products, such as tea and coffee to the Fairtrade™ brand, effectively mainstreaming these goods into UK society, an action welcomed by Consumers groups everywhere. However, there’s a long way to go.

There is a danger that consumers are being misled into believing that an entire company has been given a sustainability seal of approval. In the vast majority of cases, the ethically sourced and certified products on offer barely make up a percentage point of the brand’s product range. In Nestle’s case, the Fairtrade certified Partner’s Blend makes up less than 1% of the coffee they buy (some estimates put it as low as 0.02%) and accounts for just one coffee product out of a range of 8,500. The marketing of the launch of Partner’s Blend was widespread, but it is still near impossible to find it on the supermarket shelf. There may eventually come a tipping point where a critical mass of consumers will ask of these leading brands ‘if 10 percent of your products can be ethically sourced, why not 20 percent? Why not 50 percent? Why not your entire range?’

For developing countries there is a longer journey to travel. In developing countries such as Brazil the issue of fair-trade is not yet a reality and there is no market for fair-trade products.

The Consumers International research project ‘From bean to cup’ highlighted the confusion for consumers when trying to distinguish between sustainable coffee products. There are presently five certification schemes operating, each measuring different aspects of sustainability, Fairtrade, Organic, Rainforest Alliance, Utz Kapeh and Bird friendly. It is unclear whether this will expand the market or lead to competition between schemes. What is clear is that whilst research showed that these schemes really did make a difference to coffee farmers, it is vitally important that the benefits of these sustainable initiatives are effectively communicated to the consumer and that’s why we at UKV are campaigning to raise awareness about certification schemes.

Members of CI such as Which? and Consumentenbond (CB) have also led with reports explaining how fair-trade and social reporting work, why there are price differentials at the till but also recognising the concerns of consumers created by a proliferation of claims and critical media reports.

Percentages to perk you up

Consumers are further faced with corporations informing them of their individual approaches to behaving ethically, such as the one recently launched by Marks and Spencers - ‘We’re calling it Plan A because we believe it’s now the only way to do business. There is no Plan B.’ This was advertised over two green pages in the UK press and it gave a strong message - however, it takes more time on a website to find what Plan A actually means in practice. How can consumers compare this to other corporate ‘Plans’, such as those from giants Nestle, Kraft or Sara Lee, which have met with mixed reactions from the ethical movement? For consumers, ethical website to find what Plan A actually means in practice. How can consumers compare this to other corporate ‘Plans’, such as those from giants Nestle or Kraft which have met with mixed reactions from the ethical movement? For consumers, ethical trading is most crucially about transparency and accountability. Communications should not be about forcing consumers to choose between or prioritise the plethora of sustainability issues that will arise in a company’s supply chain. It is about making the responsibility choice the easy choice.

Consumers International recent survey with AccountAbility, surveyed the attitudes of UK and US consumers towards climate change, and showed that consumers want tougher government action to phase out products that contribute to climate change, more information about the environmental impact of the products they buy, and independent verification of the climate change claims made by businesses about their products.

  • Two thirds of consumers agree everyone needs to take more responsibility for their personal contribution to global warming.
  • Two thirds of consumers believe corporations need to take global warming more seriously.
  • Sixty per cent of consumers want companies to provide more information at the point of sale about the effects of their products on climate change.
  • Over half of consumers believe governments should be forcing businesses to phase out products that contribute to global warming
  • Seventy per cent of consumers want climate change claims made by businesses to be proven by independent third parties

Whilst referring here to climate change, it is not a huge leap to see that consumers’ confidence would be assured with similar actions when purchasing in the ethical/sustainability market and that point of sale information is vital. For governments as well it is becoming increasingly important to have a common definition of ethical trade - and how such concepts as fair, responsible, sustainable and alternative trades fit within this definition.

It is clear that consumers want to support and build towards mainstreaming ethical trade. In order to do this, consumers need to have clarity about the increasing number of claims related to ‘fair trade’ schemes and labels that are appearing on foods and products in the marketplace. Consumers need to be confident that when purchasing these products that the claims are credible, and the businesses that produce them have a genuine commitment to long-term sustainability initiatives. Primarily consumers want to support ‘good’ fair trade schemes and traders and be confident that the information at the point of sale enables them to do just that. With ethical trade becoming big business the potential for ‘ethical washing’ by insincere business becomes greater, just as ‘green washing’ became synonymous with the demand for environmentally friendly products by consumers.

Consumers International, recognising the confusion among consumers due to the proliferation of ethical trading initiatives and the growth rate of these products, asked COPOLCO to consider whether an ISO deliverable may be able to provide some solutions. The survey that was carried out showed that there is not a clear understanding of the definition of ethical or fair trade. Different labels focusing on different aspects such as fair wages, organic, labour practices, sustainable production and community support leave consumers confused - and the danger is that consumers will then revert to buying what they know.

Whilst asking COPOLCO to explore further a guidance standard covering the definition, principles and minimum requirements of ethical trade, Consumers

International and AFNOR, recognising the strong reservations of the fair trade movement also expressed the need for a standards development process in line with and going beyond that being used to develop ISO 26000 which gives guidance on social responsibility. It was equally recognised that an ISO deliverable should not deal with the substance of fair or ethical trade, as this has been dealt with in standards specifically developed for the fair trade movement, by FLO and IFAT.

Ethical consumerism is here and it is growing fast: the 8 million people who have bought Make Poverty History white bands and the current ethical marketing bonanza both demonstrate this clearly. UKV believes that an internationally harmonised standard, agreed in a balanced multi-stakeholder process, could be a vital tool towards making real gains in mainstreaming ethical consumerism.

(Martin Button is the Managing Director of UKV Solutions Ltd incorporating UK Vending (Britain’s longest serving vending business), UKV Finance (underwriting sales aid leasing across a vast range of product groups in the UK and Ireland), UKV Corporate Solutions (software development and distribution), UKV Solar (providing Green Energy solutions to businesses through unique financing packages) and UKV Office Perfect (nationally providing reprographics technology including printing, photocopying, MFPs and SFPs and integrated server based and in-cloud software).

Martin Button - Managing Director
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