Integrity and Courage – two sides of the same coin
By Liesl Truscott, Director Farm Engagement, Textile Exchange
It’s a sad situation when ‘doing the right thing’ places an organization at risk. Yet, we saw just recently how true this can be when the company Victoria’s Secret, and the NGOs Fairtrade International and Helvetas, were accused by Bloomberg Press of not ‘getting it right’ in Burkina Faso.
Further investigations by Fairtrade International and LimitedBrands (owners of Victoria’s Secret) are showing that things are not quite as Bloomberg painted them. But what I want to talk about today is how far we still have to go towards ensuring that trade is a vehicle for improving livelihoods across the globe and how important certified programs are if we want this to happen. The need for systems to guide ethical business, the procedures for building in integrity, and corporate commitment, are still critical to success. Ideally, businesses mature to a place ‘beyond certification’ but we are clearly not there yet.
Without dwelling on the objectives behind Bloomberg journalist Cam Simpson’s story of ‘Clarisse’ it’s probably enough to say it wasn’t very constructive, even if he had got his facts straight. Impressively, the accused parties have responded rationally, sensitively, and immediately to the allegations by traveling to the farms in Burkina Faso and checking the systems in place. It's times like this that reminds us how much we all (including the media) need formal processes in place to keep records, protect an individual’s rights, and look after an organization’s reputation. LimitedBrands would have been thankful their systems were robust enough to get to the bottom of the allegations so quickly and be in a position to publicly declare a different story based on required record keeping and third-party documentation.
Internalizing the costs of production
Sometimes the question is asked about what we are paying for with certified products. Among the many worthy objectives of Fairtrade and Organic initiatives is an attempt to build in the ‘costs’ (both the environmental and social costs) of doing business. These costs are usually externalized; not ‘owned’ by the business operators, and are therefore not accounted for in the price of the product. externalizing these costs of production has sadly always been commonplace, and what’s most upsetting is that it’s always the most vulnerable members of society that are affected by them. Whether it’s localized water pollution, soil infertility, or pesticide exposure leading to illness, disease, even death; vulnerable people and ecosystems are damaged by the negative side-effects of business.
The thing that’s changing over time is the direct impact back onto the business. The once ‘invisible’ consequences of externalizing environmental and social degradation is truly starting to affect business productivity, and inevitably profitability. Fairtrade and organic production is not necessarily getting ‘cheaper’ but conventional farming (including the cost of raw materials) is most certainly getting dearer. We are seeing this with many commodities such as cocoa, coffee and beauty products, which as a result, are further ahead in addressing shared value and building business partnerships, than cotton. This leads us to the importance of systems such as Fairtrade and Organic certification as ‘change agents’ if you will, to improving business practices.
Great thinkers on the subject of shared value, such as Michael Porter and Mark Kramer, will say that building competitive businesses based on product quality and so on are essential for addressing poverty. And while this is true, ‘positive discrimination’ (on the proverbial unequal playing field) based on rewarding operational internalization of environmental and social impacts, is still necessary; not till we move into an age of internalizing these impacts, and until other systems provide the checks-and-balances, can ‘fair-and-ecologically-sound trade’ stand on its own two feet.
Fairtrade and Organic projects are not a ‘handout’. Producers are not paid more for simply being poor and marginalized, they are incentivized through financial rewards for their contribution to sustainable development; something that society as a whole will agree is justifiable. This means the environmental and social costs of production are brought into the equation - internalized, even while the ‘conventional’ market in effect encourages hiving them off to other parts of society to pay for, or clean up after.
Why we still need Certification
It is fair to say things are changing; often in response to the dwindling of the earth’s resources and recognition that more sustainable production is good for the bottom line as well as reputation. Organic and Fairtrade Organic initiatives are also behind the change; acting as the beacons or the ‘gold standards’ in sustainable production, Organic and Fairtrade Organic projects show the rest of the industry what can be achieved through formalized improvement systems based on holistic (people and ecosystem) sustainability criteria.
Standards based on sustainability criteria are developed to help guide producers, companies and consumers; including systems to train, organize farmers, and monitor compliance are put in place to ensure the integrity of the system, and labels are applied as a convenient way for consumers to identify and reward ethical business.
They don’t come cheap but they pay back in terms of risk management, reputation, and quality systems management. Evidence gleaned by Business In the Community shows that companies performing well in CSR are also leaders in successful business, and further find implementing integrity systems more efficient and effective since its fully embedded into the way they do business.
Critical to the whole system working is a commitment to integrity and the courage to go beyond business as usual. I think the phrase coined by green economist E. F. Schumacher -“doing business as if people mattered” – is particularly useful since it sums up how taking care of people is not automatically considered by conventional economics. Relearning family and community values, such as looking after the vulnerable (and that includes children) is everybody’s businesses. This is something that the ‘shared value’ fraternity subscribe to but it does require very close working relationships to ensure complete confidence it is being delivered. It requires going beyond certification.
Going beyond certification is being promoted by the think tank SustainAbility and if you haven’t taken a look at their latest report Signed, Sealed... Delivered? yet it’s worth a go. Essentially, SustainAbility is pushing companies to not stop at certification but to move beyond to ‘collaborative competiveness’ which takes progressive companies to an even higher position of personal accountability and delivery of responsible business.
At Textile Exchange we use our three pillars: Informing, Connecting, Leading, to help support our members on their sustainability journey. Creating that platform – and a safe place - for sharing and learning we believe is a great place for companies to build their integrity measures and dare to be more courageous. We don’t think pointing the finger at those risking business reputation by going beyond business as usual (which is what Victoria’s Secret is doing by investing in Fairtrade Organic production initiatives in one of the poorest countries on Earth) is going to help either improve integrity or encourage courageousness.
We do hope, however, that the recent Bloomberg article will refresh our sensitization to the heart-wrenching reality of illegal child labor taking place in war-torn poverty-entrenched countries, such as Burkina Faso, and renew our vigor in taking action to bring about change. It will require systems that monitor activities and build in integrity. But most of all it will require courageousness to get stuck in, even when the starting position is so far from where we want it to be.
Please share your thoughts and help us encourage constructive debate on this topic!
See our website for information on Industry Integrity and Integrity at the Farmgate