Business for a Social Purpose: Traidcraft and shared interest
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Dialogue
Business for a Social Purpose: Traidcraft and shared interest
MARY MELLOR AND GEOFF MOORE
ABSTRACT Mary Mellor and Geoff Moore present case studies of two organizations that have Corporate Social Responsibility in the form of social purpose at the heart of their theory and practice. Traidcraft, a Fair Trading organization and Shared Interest a financial cooperative that supports Fair Trade, both seek to promote Fair Trade as a solution to poverty and marginalization in developing countries. This aim is explored together with an assessment of the radicalism of their approach. KEYWORDS fair trade; corporate social responsibility; lending cooperative
Introduction In recent years, there has been a growing movement of trading organizations that put the social purpose of the business first, but also seek to operate profitably within the market place. This has been particularly exemplified in the Fair Trade movement which FINE1 has defined as: a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers ^ especially in the South. Fair trade organizations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade (FINE, 2001, http://www.eftafairtrade.org/definition.asp, accessed 8 September 2003).
Fair Trade aims to provide a working model of international trade that makes a difference to both producers and consumers. Key principles are fair pricing and the development of consumer consciousness together with a more radical aim to challenge orthodoxy in business practice not simply by campaigning but by being a‘tool for modifying the dominant economic model’ (Renard, 2003: 91; Moore, 2004). Four phases have been identified in Fair Trade development: from goodwill selling (mid-1950s to early 1970s); to solidarity trade (1970s to late 1980s); to mutually beneficial trade (1990s); and finally to trading partnerships (1990s and the emerging trend) Development (2005) 48(1), 84–91. doi:10.1057/palgrave.development.1100118
Mellor and Moore: Traidcraft (Tallontire, 2000:167^9). In its increasing emphasis on partnership (see also the FINE definition above), Fair Trade sees itself as a model for development in which international trade can benefit producers in developing countries without creating dependencies or exporting the dominant model of capitalism. Indeed, it is possible to make a parallel between the effect of ethical consumers in the North, willing to pay higher prices such that the benefits flow to the southern producers in higher wages and social premiums for the local community, and that of trade unions and minimum wage legislation.2 This is not to say that Fair Trade is without its challengers and its own difficulties. Space here precludes a discussion of these, but Moore (2004) in genera
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