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Greed does not have to drive business: the role of Fair Trade Enterprises as proof of concept
Abstract
Maximising and extracting profits has become the central design feature of mainstream business. Fortunately, alternatives to this idea are on the rise, among them the Fair Trade Enterprises spread across over seventy countries. Distinct from commodity-focused models, Fair Trade's enterprise verification system (WFTO system) is focused on the mission, priorities and structures of an entire enterprise. Recent analysis of this Fair Trade Enterprise model has uncovered distinct structural features that shape their priorities and decision-making processes. Such structural features determine where profits go, which stakeholders are given power and, ultimately, whom the business is set up to benefit. By remaining mission-led, Fair Trade Enterprises demonstrate that business can be viable without endlessly pursuing profit maximisation. This is an idea that can transcend social and environmental objectives, particularly in tackling rising inequality. Fair Trade's community of verified mission-led enterprises can be a proof of concept for the enterprises of the new economy.
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Footnotes
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WFTO members are predominantly Fair Trade Enterprises (also known as Fair Trade Organisations), who must earn the majority of their income from trading. There are also other categories of WFTO membership: Fair Trade Networks (network organisations with their own members) and Fair Trade Support Organisations (these predominantly support Fair Trade but do not earn the majority of their income through trade). The WFTO Guarantee System applies to all these categories of membership and all are audited independently. Most members have successfully completed the monitoring requirements to become Guaranteed members. Others are classified as provisional members until they have completed these requirements. They have a specific period in which to complete this.
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Based on a review of member profiles of the 323 trading members of the WFTO in June 2018.
It is difficult to report figures at this stage without analysing the legal requirements for different business legal forms within the seventy-two countries but there was significant reporting of boards with such characteristics.
By ‘new Economy’, I refer to the ideas of organisations such as New Economy Coalition, Wellbeing Economy Alliance and others involved in gatherings such as NESI (New Economy and Social Innovation Forum).
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