Ethical trade and fairtrade

Ethical trade and fairtrade

A shared aim — with two approaches

Given the variety of labels that make different social, ethical or environmental claims about products, there is often confusion about what exactly ethical trade is, and how it differs from products that are described as 'fairly traded', and/or carry the FAIRTRADE mark.

Ethical trade and Fairtrade have distinct origins, but their approaches are complementary: both focus on helping make international trade work better for poor and otherwise disadvantaged people.

The ethical trade movement originated in the 1990s when campaigns and media exposés brought attention to the harsh conditions of workers producing clothes, shoes, toys, food and other consumables for multinational companies. Ethical trade involves retailers and brands taking a series of recognised steps to improve the conditions of the workers throughout their supply chains, wherever they are in the world.

The fairtrade movement originated in the 1980s to protect poor developing country farmers from low international market prices of commodities such as coffee, cocoa and tea. Products carrying the FAIRTRADE Mark help address the injustice of low prices by guaranteeing that producers receive fair terms of trade and fair prices - whatever the conventional market is. Producer organisations also receive a small premium for business or social development projects.

Ethical trade and Fairtrade: key differences

Ethical trade

The FAIRTRADE Mark

Focuses on protecting workers' rights throughout the supply chain

Focuses on helping disadvantaged producers and workers in the developing world - eg, cotton, banana, cocoa and coffee farmers - take more control over their lives

Is about the behaviour of buying companies - retailers, brands and their suppliers - and the steps they take to ensure supplier companies respect workers' rights

Applies specifically to products, not companies

Does not depend on consumer awareness - that's why there is no recognised ‘ethically traded' label

Has widespread consumer recognition and a recognised label, the Fairtrade Mark

FAQs

What are companies' responsibilities towards workers making garments using FAIRTRADE cotton?

The FAIRTRADE Mark for cotton was launched in 2006 and since then, the size of the market has grown rapidly, with retailers launching a growing variety of products bearing the mark. The FAIRTRADE mark applies very specifically to cotton growing, rather than other stages in the production process - for example garment manufacturing. It is up to all companies selling products made with Fairtrade cotton to take responsibility for improving conditions and promoting respect for the rights of all the workers involved throughout their supply chain.

We encourage consumers buying Fairtrade cotton products to also ask retailers how they are putting this responsibility into practice.

What about products that have a 'fairly traded' or 'ethical' label but that don't carry the FAIRTRADE mark?

An increasing number of companies are seeking to provide an ethical alternative for consumers, and who may describe their products (often clothes) as 'ethical' or 'fairly traded'. The standards and criteria for defining what is meant by ‘ethical' or 'fair' vary among all these companies. Some initiatives apply criteria that are similar - sometimes even more stringent - than those required for fairtrade certification, while others may not be so rigorous. Whatever the case, it would be unwise to accept any company's 'ethical' claims at face value.