Small But Perfect Toolkit 2: Doing Business Differently

• Section 1: Background information and inspiration

• Section 2: Case studies

• Section 3: Goals and potential shifts

• Section 4: Reflection exercises

• Section 5: Worksheets, tools and templates

• Section 6: Reading list, further resources and references?

Content prepared by Francesca Gnesutta, Zerrin Cengiz and Leida Rijnhout for World Fair Trade Organization

Section 1: Background information and inspiration

What is Fair Trade?

The World Fair Trade Organization (WFTO) is one of the organisations which is part of the broader Fair Trade movement. WFTO aims to:

1. Improve the livelihoods of marginalised producers and workers,

Many environmental and social issues are a result of the profit maximisationdriven economic system in which we are currently embedded. This economic system is not only unable to respond to the urgent needs of our world, but also is actively involved in the consolidation and perpetuation of these very problems.

Fair Trade (FT) provides a viable alternative to the economic system of profit-primacy, and urges everybody, including fashion enterprises, to think about what should be prioritised in their business practices. In short, Fair Trade is based on modes of production, trading and consumption that put people and planet before financial profit.

2. Change unfair structures of (international) trade, mainly by means of Fair Trade practices,

3. Support Micro and Small Enterprises, as well as local and regional markets,

4. Improve and coordinate the cooperation of our member organisations and associates.

5. Advocate for (inter)national policies that facilitate and support Fair Trade SMEs

Fair Trade is not charity, but a partnership for change and wellbeing through trade.

Fair Trade is a political movement connecting producers and consumers and engaging citizens to create change in order to achieve sustainability and justice worldwide.

Fair Trade concerns everybody operating in the current economic system through trade and the ones building up a new economic model.

Businesses which are driven by profit-primacy are part and parcel of the social and environmental problems that we experience today. A system that prioritises shareholder profits inadvertently contributes to a situation in which social and economic inequalities are increasing. When profit-maximisation is the ultimate goal of companies, social and environmental issues do not get sufficient attention, on the contrary. Therefore, other business models that put people and planet first are needed as the norm in order to establish a sustainable economic system.

“We destroyed the planet but for a beautiful moment in time we created a lot of value for shareholders”

— Tom Toro

(quoted in the cartoon published in the New Yorker, 2012)

Alternative businesses are established in a different manner than mainstream businesses by incorporating three areas* of systemic features into their structure and business model.

First, they are committed to upholding human rights for all, and are dedicated to overcoming existing societal and environmental problems with their business practices.

Second, they operate in accordance with trading principles that are informed by a commitment to establishing strong and longterm relationships with partners, which are also essential for creating better working conditions for workers and employees.

Finally, they incorporate their mission into their governing documents to ensure that the business operates according to its social and environmental goals.

1- Mission and Structure: e.g. social and environmental mission written in governing documents, profits used for mission, representation on board

2- Human Rights Conditions: e.g. environmental protection, labour rights, anti-discrimination policy and practices

3- Trading Practices: e.g. payment terms, long-term commitments to suppliers

WFTO envisions and supports a business model that is based on the following key pillars: mission, human rights, recognition of planetary boundaries and fair trade practices.

Section 2: Case Studies

WFTO Brands

Meet and get inspired by some of the mission-led WFTO member brands

Combining Nordic design and Kenyan handicraft, Mifuko brings to life eco-friendly, fair trade and handmade baskets, accessories, and home décor items.

Visit: https://mifuko.com/

With contemporary and versatile designs, and playful, exclusive prints, People Tree creates stylish, innovative, and affordable fashion while respecting people and the planet.

Visit: https://peopletree.eu

Section 3: Goals and potential shifts

Shifting your focus from profit to people and planet

Profit maximisation ≠ growing sales

As a business, you would naturally like to sell your products and increase your sales. However, the economic system and model within which you operate needs to be critically reflected on. Therefore, there is a necessity to think about your business practices as an enterprise.

“The extractive economy of profits at any cost has brought us to an ecological brink and polarised society between the 1% and 99%. Fair trade based on ecological sustainability and social justice have become a survival imperative. Fair trade is based on giving back to the Earth and society.”

People, planet and commercial resiliency

Supporting people, protecting the planet, all while keeping the business alive. We all want to do good, but how can we achieve that? Reflect on your current practices, the entirety of your business model, and identify areas of improvement.

Exercise – People, planet and commercial resiliency:

• Are these aspects a priority for your business?

• What are your challenges and strengths in these areas?

• How are these three aspects related to one another?

For more information check out the “Creating the new economy” report.

Vandana Shiva (Environmental activist, food sovereignty advocate, founder and director of Navdanya International)

Section 4: Reflection exercises

Understand your social and environmental impact

How does your company relate to the alternative business models triangulation?

Please write a short reflection about your current business practices by responding to the questions below

Mission:

What is your mission as a company?

Are social and/or environmental goals part of your mission?

Are these goals incorporated into your company’s legal documents?

Do you have a requirement to reinvest part of your profits into your company’s goals?

Is the way you reinvest your profits in contradiction to your goals?

Human rights: Fair trading practices:

What constitutes human rights?

What are the current trading practices of your business?

Do you actively integrate human rights in your business operations?

What do you think are the practices that ensure fairness in business?

Do you believe you create a positive impact with your business?

Do you implement trade practices that are fair for everybody involved? If so, how?

Section 5: Worksheets, tools and templates

Understanding your supply chain

Partners’ overview

List all your essential trading partners, describe what their role is, and explain if they are compatible with your business (share the same objectives).

If your customer asks you about your products, how far can you trace them back? If you work in sustainable fashion, customers will likely want to know more about what they buy, and have the tendency to ask questions about the garments they purchase. As a business you want to be answerable, but it may be difficult because you are not working alone: do you know what is going on along your supply chain?

Name Role Shared Goals

Supply chain overview

Using a scale 1 to 10 (with 10 being the highest), score the following questions.

Section 6: Reading list, further resources and references

Further reading and resources

How much do you know about your partners’ business practices? Rate from 1 to 10

How far can you trace your product back? Rate from 1 to 10 (from not at all to complete transparency)

Do you actively work on the betterment of your supply chain? Rate from 1 to 10

Results:

0-10: You’re not answerable to your customers about where your products come from. Identify the most problematic areas in your own supply chain and think of possible solutions

0-20: Good, but you have room for improvement. Work on increasing communication with your partners

20-30: You are doing good! But strive for continuous improvement. For instance, you say that you have complete transparency. Do you have data, photos, reports that you customers can see?

For more information on how WFTO monitors supply chains check out the WFTO Fair Trade Standard.

• CREATING THE NEW ECONOMY: Business models that put people and planet first https://wfto.com/sites/default/files/ Business_Models_Report.pdf

• WFTO Fair Trade Standard

https://wfto.com/sites/default/files/ WFTO_Standard_November%202020_ digital.pdf

• Fair Payment https://wfto.com/our-fair-paymentsystem

• WFTO x #LetsDoItFair

https://wfto.com/LetsDoItFair/

• The New Yorker https://www.newyorker.com/cartoon/ a16995

• Democratising Trade through Social Enterprises: The Contribution of Fair Trade to Building Sustainable Development | World Fair Trade Organization

https://wfto.com/article/democratisingtrade-through-social-enterprises

• Provocateurs Not Philanthropists | World Fair Trade Organization https://wfto.com/podcast/provocateursnot-philanthropists

• Small But Perfect Impact Business Models Webinar Series

https://www.commonobjective.co/article/ small-but-perfect-impact-businessmodels-webinar-series

• Small But Perfect: Impact Business Model Resource Suite

https://www.commonobjective.co/article/ small-but-perfect-impact-businessmodel-resource-suite

• How Your Fashion Brand Can Successfully Partner With Fair Trade suppliers

https://www.commonobjective.co/ article/how-your-fashion-brand-cansuccessfully-partner-with-fair-tradesuppliers

• An Introduction to Impact Business Models

https://www.commonobjective.co/article/ an-introduction-to-impact-businessmodels

• What Doughnut Economics means for business: creating enterprises that are regenerative and distributive by design https://research.hva.nl/en/publications/ what-doughnut-economics-means-forbusiness-creating-enterprises-t