Thought leadership

What is fair trade manufacturing and why is it important for global sustainability?

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The fair trade manufacturing movement champions rigorous standards that promote sustainable livelihoods. It advocates for safe working conditions, protection of the environment, and stronger, more transparent supply chains.

This movement is especially important for workers in developing nations who may have been victims of exploitative practices such as sweatshop labour. Other incidents, such as the Rana Plaza collapse in Bangladesh in 2013, also shine a spotlight on the unsafe working conditions that workers in many nations are subjected to.

Besides the human cost, environmental protection is also deeply ingrained in fair trade manufacturing. In times of worsening climate conditions, manufacturers need to institute fair trade manufacturing and play our part in pushing for global sustainability.

Benefits of choosing fair trade products for consumers, businesses and communities

One of the key tenets of fair trade practices is the development of partnerships with communities based on mutual respect. These partnerships provide numerous advantages to workers and communities as it gives more agency to the workers and affords them better protection from exploitation.

Apart from providing better working conditions to them, manufacturers that employ fair trade practices will be able to differentiate their products, build long-term relationships with suppliers and workers, and mitigate reputational risks.

Additionally, fair trade manufacturing offers an opportunity to promote social justice, sustainability and economic development while doing well in the marketplace. By participating in this movement, manufacturers can earn the trust and loyalty of socially conscious consumers while enhancing their brand reputation.

How the EU is managing fair trade manufacturing

The European Union (EU) bloc is the largest economy in the world – it is also the largest trading bloc. Therefore, the EU holds much influence over manufacturers that wish to trade or operate in it, and this also extends to the fair trade practices that the EU has put in place.

One example is the Fair Trade Towns movement, which encourages local communities to support fair trade products and advocate for fair trade policies at the local level. This movement began in the UK in 2000 and has since spread to other European countries.

In addition, several of these nations have established national fair trade organisations that promote fair trade principles and provide certification for fair trade products. These organisations ensure that products meet fair trade standards and provide a fair price to producers.

Many European manufacturers have also partnered with fair trade organisations such as the Fairtrade Foundation or Fairtrade Nederland. By sourcing goods from certified suppliers, manufacturers can guarantee that they are adhering to ethical and sustainable practices in their supply chain.

Some examples of manufacturers that have robust fair trade practices in place, and have flourished as a result, include People Tree (a UK fashion manufacturer), Kone Cranes (a Finnish crane manufacturer), and Liebherr (a German-Swiss equipment manufacturer).

How fair trade manufacturing helps drive sustainability

With fair trade principles and processes, manufacturers can promote more ethical and sustainable production practices.

Fair trade manufacturing also promotes greater transparency even within the manufacturer’s supply chain, making manufacturers more accountable while providing consumers with more confidence and trust that the goods produced are sustainably and ethically sourced and produced.

To truly distinguish your manufacturing practices, an internationally recognised benchmark that is able to accurately gauge your commitment to sustainability is needed.

Find out how you can increase the transparency and visibility of your ESG reporting with the Consumer Sustainability Industry Readiness Index (COSIRI). You can also read more about the most significant emerging trends impacting manufacturers today by subscribing to our monthly newsletter for the latest news and updates in the industry.

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