Fair Trade: Benefits, Ethics, and Corporate Responsibility

Understanding Fair Trade and its Impact

Have you ever come across a food product at the supermarket with a label saying "Fair Trade"? You may have wondered what exactly that means. Fair trade is an arrangement designed to help producers in growing countries achieve sustainable and equitable trade relationships.

The Objectives of Fair Trade

Fair trade has two main objectives: the development of peoples and the fight against poverty. These objectives are based on several pillars:

• Producers must have a minimum wage.
• Workers should not be children.
• Products shall be environmentally friendly.

Consumers pay more attention to the origin of the products they consume. They take into account, for example, how it has been obtained, and they are willing to pay more if the product is sustainable.

The Pandemic's Influence on Fair Trade

The pandemic we have lived through has benefited fair trade. Citizens are concerned about the impact of their actions. An example of this is the consolidation of the European Green Projects.

In conclusion, nowadays society is the one that sets the course for companies. Because of this, companies should incorporate fair trade so that they take benefit of fiscal advantages. Furthermore, firms improve their corporate image.

The Role of Ethics in Modern Business

Companies naturally have profits as a priority. This principle was used by companies during the 20th century. In the present context, there are some other values as well, such as the company’s impact, its relation with the employees, or its relation with the customer or client. As a consequence, companies have incorporated ethics.

Defining Ethics in Business

When we talk about ethics, we mean the study of appropriate business policies and practices regarding potentially controversial subjects including corporate governance, insider trading, bribery, discrimination, corporate social responsibility, and fiduciary responsibilities.

Examples of Ethical Practices

• The company’s production should respect the environment, in other words: be sustainable.
• Companies should focus on the consumer’s real needs and benefit (for example, avoiding health-threatening substances in food).

Although this will reduce the profit margin, on the long run, incorporation of ethics will improve corporate image, which, in turn, will increase their sales and market share.

Conclusion: Integrating Ethics for Competitive Advantage

In conclusion, firms should integrate ethics due to the corporate context. Otherwise, they will not be able to compete because customers are concerned with the way products are made.