The Basics of Fair Trade

How many of you have heard of Fair Trade? I’d imagine many of you have. But how many could actually define it, or discuss it, or even promote it? My guess is not as many.

That was the case for me until recently. Recognizing that I’d heard a lot about Fair Trade but that I couldn’t actually talk about it at length with anyone, I felt the need for some information and education.

Enter my local Net Impact chapter and the event they hosted this week featuring Rodney North, self-proclaimed “Answer Man” from Equal Exchange.

Equal Exchange is a 24 year-old organization started by three guys trying to answer a question: “What if food could be traded in a way that is honest and fair, a way that empowers both farmers and consumers?”

As the founders saw it, there were three key problems they felt needed to be addressed:

1. Chronic, generational poverty amongst the tropical farming population, especially coffee farmers. Interestingly, they noted that while coffee farmers kept getting poorer and poorer, the industrialized nations that drank the coffee kept getting richer and richer.
2. Exploitative and undignified working conditions in the U.S., which they felt warranted the creation of a new democratic and cooperative business model.
3. Uninformed and disempowered consumers that were unaware of the environmental and social problems present in various production supply chains and marketplace systems.

With all of this in mind, Equal Exchange set out to create an organization that would tackle these three crucial issues.

Today, Equal Exchange sources fair trade coffee, tea, chocolate, bananas, nuts and berries from farmer-owned cooperatives in Africa, Asia, Latin America, and the United States. In their own words:

At Equal Exchange, we’ve created a different path to the market – one that brings farmers closer to you, and delivers more of your dollars to their communities. We do this by partnering with small-scale farmer co-ops that are democratically organized, which means they make decisions on their terms. Through this model, we believe food can become a delicious and powerful tool for creating Big Change for small farmers, their families and communities.

According to Rodney and the Equal Exchange website, Fair Trade encompasses a number of practices and ideals meant to provide adequate protection and support to growers, as well as increased assurance and certification for consumers. Some of these include:

• Direct purchasing from the farmer cooperatives themselves – ie: no middlemen
• Agreed-upon floor pricing for commodities so that even in times of financial crisis, farmers earn a living wage
• An extension of credit by Equal Exchange and other importers so that farmers may invest in new resources and technology to grow a higher quality product
• A fee paid by importers and wholesalers to cover the costs associated with Fair Trade certification
• A seal attached to each and every product ensuring certified status to the consumer.

As Rodney put it so cleverly: “We don’t teach a man to fish. We just stop stealing from him.”

And whether it’s through the fair prices they pay farmers, the kind of cooperative organization they’ve created, or the partnerships they’ve built with consumer and faith-based organizations, it’s clear that Equal Exchange is pushing forward with its mission of creating a “more equitable, democratic and sustainable world”.

As the talk wound down, Rodney touched on a couple of points that I thought were worth sharing.

When asked about Equal Exchange’s goals for the future, Rodney said that the organization’s explicit purpose is to be an example for others to follow. As an organization, Equal Exchange can only buy so much coffee itself! So its goal is to create a model that others can emulate. And, he said, the one good thing about our economic system is that organizations copy models that work.

He pointed to McDonald’s, Dunkin Donuts and Ben & Jerry’s as examples of companies that have gotten into using Fair Trade products. While most would argue their intentions are purely based on maintaining or growing market share, Rodney still sees this as a success – because regardless of their intentions, they're still supporting Fair Trade principles and practices.

Finally, and I thought very insightfully, someone brought up the topic of the “Local Food” movement – that is, the idea of eating locally to promote more sustainable agriculture and food production.

“How does Fair Trade,” the attendee asked, “align with or diverge from the goals of eating locally?”

After admitting that the idea of eating locally can be problematic for Fair Trade proponents, Rodney said the best Equal Exchange can do is provide information and education to consumers looking to learn more. He also pointed out that some products – like coffee, for instance – just can’t be sourced locally.

So, while a neighborhood coffee shop might want to serve sustainably-produced beans, their best bet is to stick with fairly-traded, overseas products versus anything artificially produced closer to home.

All in all, a terrific night of learning, conversation, and food for thought (no pun intended). I encourage you, the next time you’re wandering the grocery aisles, to think about where your bananas or nuts or chocolate came from.

By being thoughtful and educating ourselves about the origins of our food and the people who produce it, we can go a long way in supporting the important mission of organizations like Equal Exchange.

Happy grocery shopping!

Meeting Our Future Women Leaders

This weekend I was lucky enough to be featured as a panelist at the third annual Boston University 85 Broads conference. The theme of the event was “Rising to the Top,” and it brought together an incredible group of professional and undergraduate women to learn from each other and network.

If you aren’t familiar with 85 Broads, a quick check of their website tells an interesting story:

85 Broads is a global network of 20,000 trailblazing women who are inspired, empowered, and connected.

The "founding members" of 85 Broads were women who worked for Goldman Sachs at 85 Broad Street, the investment banking firm's NYC headquarters. Over the past decade, 85 Broads expanded its membership to include women who are alumnae and students of the world's leading colleges, universities, and graduate schools worldwide. Our members are located in 82 countries around the world and work for thousands of for-profit companies and not-for-profit organizations.

As a graduate of an all-girls high school and a big proponent of creating leadership opportunities for women in business, I’ve always been curious about 85 Broads – which is why it was so exciting to be invited to present at the BU chapter’s annual conference.

The panel I participated in was for undergraduate women interested in pursuing nonprofit careers, and I was joined by two other panelists doing some incredible work:

• Amma Sefa-Dedeh, executive director of One Hen (a very cool microfinance nonprofit here in Boston) and a recent Babson MBA graduate
• Jenny Jordon, associate consultant at The Bridgespan Group (an off-shoot of Bain & Company that works specifically with nonprofit clients).

Amma, Jenny and I were there to talk about our experiences working in nonprofit leadership roles, discuss the various advantages and challenges of working in the nonprofit sector, and to answer questions from the young women in attendance.

For my part, I got the chance to talk about my work in fundraising, my interest in corporate social responsibility, and my decision to pursue an MBA. Many attendees were also interested to hear how I was using The Changebase to not only share ideas and create conversation, but also as a personal branding tool during my job search.

One particular question seemed to strike a chord not just for the women in the audience but for me as well.

An attendee asked about switching from the nonprofit sector to the corporate world, and vice versa: “Is it hard to make the switch” she wondered, “or do I need to pick one sector and stick with it?”

Given that I am a sector-switcher myself, this is something I tackle regularly in my cover letters and job applications. My feeling is that there’s nothing wrong with “switching sides” but you do need to be prepared to do a little extra hand-holding with potential employers. The experience and background that resonates with recruiters in one sector might not be what resonates with recruiters in another, so job seekers need to be prepared for this.

As Amma so insightfully put it: “Career switchers need to put in 200% extra effort” – whether you’re moving from one sector to another, or simply switching functions like going from engineering to finance, you need to be ready to work that much harder to get people to take a chance on you and your skills.

Certainly valuable advice for everyone in the room – even me!

In all I was incredibly impressed by the roughly 25-30 young women in attendance (dressed in suits on a Saturday no less!). Between the thoughtfulness of their questions and their passion for learning about and doing this important work, it was clear to me that these women are motivated to not only make social change, but to forge ahead in their own professional careers.

In my opinion, if the women in attendance are any indication of the quality of our future women leaders, I think we’re in good hands!

Engaging Your Employees in CSR

In the grand scheme of things, Corporate Social Responsibility is still an emerging field, which means that everything – from general strategy to best practices – is still being solidified.

One of the questions that is still debated quite often in the CSR community concerns the “business case” for this kind of work.

In a world where business decisions need to be justified through sound reasoning and quantitative measurements, it can be tough to explain why “doing good” is important.

I’ve tried to tackle this question in past posts, and the fact that I’m bringing it up again I think is proof that the jury’s still out on this one. Nonetheless, I did just hear one perspective on the topic that I thought was worth sharing with you.

Bob Willard is a sustainability author whose “claim to fame” (as he put it) is the quantification of the bottom-line benefits that companies can enjoy through CSR. He recently presented his ideas on the value of CSR as part of a Net Impact Issues-in-Depth call that I was lucky enough to listen to.

Bob started by laying out his general framework for the case for CSR, otherwise known as The 3 R’s:

1. Risks
2. Responsibilities
3. Rewards

The first category, Risks, is pretty obvious and serves as the most direct justification for engaging in CSR. From managing regulatory changes to preparing for the potential depletion of certain natural resources, corporations must consider what risks they face and how CSR might help mitigate exposure to those risks.

The next category, Responsibilities, really speaks to the new wave of expectations surrounding corporate involvement in the community and the environment. Whether from consumers, the media, NGO’s or even employees, there is clearly pressure being put on companies to be active and engaged in society – with reputation, loyalty and credibility at stake.

Yet it was the third ‘R’ – Rewards – on which Bob focused. As Bob put it, “There are surprisingly big rewards for taking up responsibility expectations and mitigating risk”.

In fact, according to Bob’s calculations (which he called conservative), these rewards can be sizeable for both large corporations and small-to-medium businesses, who can expect to earn at least 38% and 66% more profit, respectively, through CSR programs.

Not surprisingly, the biggest area of CSR reward comes from the eco-efficiencies created in sustainability programs (ie: saving water, reducing waste, etc).

What comes next? Interestingly enough, the second biggest reward opportunity comes through employee engagement in CSR programs. Whether through reduced recruiting and attrition costs or increased employee productivity, the HR benefit of CSR is not to be overlooked.

Now, we all know anecdotally that CSR improves morale, reduces turnover, and generally leads to more satisfied employees. What’s cool about what Bob has done is that he’s actually put numbers behind these assertions and provided the calculations that prove these rewards.

Admittedly, I’ve never been great at statistics – but when Bob presented a regression analysis showing a correlation (R² = .57) between employee engagement and CSR activities, I just about swooned!

While I’m not going to repeat everything Bob presented, you can check out his website to see presentations and spreadsheets that show the numbers behind his ideas. In general, Bob's overall point was that employee engagement drives business results (after all, happy employees beget productive employees) – and that CSR is one big way to dramatically improve the recruitment, retention and satisfaction of employees.

Thus, in essence, CSR leads to engaged employees which leads to increased returns for business. And voila - the business case for CSR in a nutshell!

As a job-seeker and future engaged employee, this assertion rings true for me. Nonetheless, if you’re still doubtful, I’ll leave you with some of Bob’s statistics as food for thought:

Recruiting

• 40% of MBA grads rated CSR as a an “extremely” or “very” important company reputation measure (Hill & Knowlton Jan 08)
• MBA grads will sacrifice an average of $13,700 in annual salary to work for a socially responsible company (2003 Stanford University study)

Retention

• 83% of employees in G7 countries say their company’s positive CSR reputation increases their loyalty (GlobeScan 2006)
• 57% of employees say their company’s CSR reputation is a factor in retaining them (Towers Perrin-ISR global survey 2007)

Productivity

• Fully engaged employees are 2.5 times more likely to exceed performance expectations than their “disengaged” colleagues (Hay Group website, May 2009).
• At Best Buy, a 2% increase in employee engagement at one of its electronics stores corresponds, on average, to a $100,000 annual rise in its sales (Business Week, “The Case for Optimism,” August 13, 2009).

So what do you think? Is employee engagement a compelling motivation for CSR at your company? Is this an argument that wins over senior company leaders? I'm curious to hear your thoughts.

A Daily Dose of Inspired Philanthropy

Betty Londergan is a woman on a mission.

Since the start of 2010, Betty has embarked on a journey of what I can only describe as “Inspired Philanthropy”.

But before I dive into Betty’s story – let me ask you this:

How many times a day do you stop and think about the people around you and their personal stories?

The woman sitting next to you on the bus, the man in the cubicle down the hall, or the little kids playing on the basketball court - How many times do you stop to think: “Who are they?” or “Where did they come from?” And, perhaps most importantly, “Do they need my help?”

As we get caught up in the day-to-day drudgery of life (errands, work, family, etc), it’s easy to stay focused on ourselves and what we need or want.

I’m just as “guilty” of this as anyone; between school, my job search, and being a wife, daughter and friend, my plate is pretty full these days. Not to mention the fact that my wallet is pretty tight too.

Given both these financial and time constraints, when it comes to my own personal charitable giving, I often fall back on old habits. I have my list of go-to organizations and, when I find myself in a giving mood, I just direct my donations to them.

Maybe it’s just me, but I don’t often consider which new or innovative ideas and organizations are deserving of my donations – in large part, I think, because I’m just too darned busy to search!

Enter Betty Londergan, whose 2010 resolution is “365 days of putting my money where my mouth is”.

Betty’s blog, What Gives 365, is a daily record of her journey in philanthropy. For 365 days Betty has pledged to give $100 a day to people and organizations doing great work.

How does Betty choose where to give? In her own words:

In super general terms, I’m going to give to places that I have a personal connection with [and] I’ll tell you the story behind my gift in the hopes that you might be moved to support the cause, too. I will try to choose organizations that will use the money effectively and wisely (I’m checking organizations out with Charity Navigator and the American Institute of Philanthropy).

Beyond that, my yardstick is to give money to alleviate things that make me want to cry; things that make me feel ferociously protective; things that make me want to say Amen; and things that just make me feel good.

In essence, Betty has decided to pay attention to the everyday people and stories that move her.

I recently signed up for her RSS feed (and I encourage you to do the same) – which means that every day I get a short, sweet, and inevitably inspiring story of amazing people doing incredible work.

Work that I would have never known about had Betty not stopped to take some time, connect with others, and hear their stories.

In the end I think philanthropy is about connecting with the people, animals, environments and organizations around us – and supporting what moves us.

Unlike Betty, we might not all be able to give $100 a day. But what if we gave $50 a day, or $10, or even $1? Our smaller gifts might not have the impact that Betty’s do, but we’d still be reconnecting with our community and supporting causes that are meaningful to us.

Now that’s what I'd call Inspired Philanthropy.

Want a CSR Job? Read This First.

With just over two months left until I graduate from business school, I’ve started to reflect on what I’ve accomplished over the last two years. Without a doubt, the most fulfilling experiences of my MBA program have been the chances I’ve had to engage in real-world consulting projects for corporate and nonprofit clients.

In the last four semesters, I’ve worked on some pretty terrific marketing and corporate social responsibility projects - including brand audits, marketing research plans, stakeholder communications strategies, and social media tactics.

But perhaps my most satisfying consulting project was a sustainability reporting and stakeholder engagement plan for Praxair, a $9B Fortune 300 industrial gas manufacturer in Danbury, CT. I’ve talked about this project in past posts, and I was thrilled to see that Boston University recently issued a press release about this engagement (including a quote from yours truly!).

These consulting projects have been the most rewarding part of my MBA, but they’ve also been the most challenging and time-consuming. In the end, though, I’ve signed up for all of them without hesitation – in large part because I (and many of my fellow MBA classmates) believed they’d serve as proof of our experience to potential employers come recruiting season.

Interestingly, last week The Wall Street Journal published an article about companies partnering with business schools to create these sorts of CSR projects for students. The article starts out positively, saying urgent “social concerns” are leading more and more companies to partner with business schools to provide real-world education and training to students (aka: potential employees).

Unfortunately the story takes on a different tone just a few sentences later:

The effort [to create real-world CSR consulting projects] is being met with both gratitude and skepticism from business schools, which say that despite the emphasis on integrating these hot-button topics into the curriculum, it's business as usual at recruiting time. Few hiring managers, they say, ask students about corporate-responsibility training or indicate it's a priority.

That’s right – according to the article, these CSR projects may be happening more frequently on business school campuses, but that doesn’t mean they’re turning into more CSR jobs for MBA graduates after school.

The article drills home the point even further, saying that engaging students in these kinds of projects “doesn't translate into hiring socially responsible M.B.As, an issue that “points to a disconnect on part of the companies: There's enthusiasm in the classroom for imparting corporate responsibility and sustainability concepts, but hiring managers attending campus recruiting sessions say it's rarely something they quiz candidates about.”

In the end it seems that MBA grads looking for CSR jobs can easily find themselves between that proverbial rock and a hard place – on the one hand, they’re receiving extraordinary real-world training for future sustainability positions; yet on the other, there’s often no opportunity to continue this work once they finish business school.

Another related and interesting study that just came out also reinforced this point:

Ellen Weinreb from WeinrebGroup analyzed six years of CSR job postings and drew conclusions about the availability of jobs and overall trends in CSR recruiting. Her findings point to an interesting conclusion for recent MBA grads wanting to get into CSR (which, by the way, is the same conclusion drawn by the Wall Street Journal article):

If you want to work in CSR, get functional experience first.

Ellen’s study shows an increase over time in VP and Director-level CSR jobs – which is great news for people already working in CSR but not so great for MBA grads just trying to jump in.

Since those high-level CSR jobs are most likely out of reach for newly-minted MBAs, Ellen suggests job seekers embed themselves in a corporate function (marketing, finance, strategy etc), learn the business, and then transition internally to a CSR role.

When you think about it, this advice makes sense; after all, to be effective in sustainability, you’ve got to first understand the business you’re in.

For my part, it turns out that I’ve actually heard this advice many, many times – and given the frequency with which it’s said, I’ve taken it seriously to heart.

Still, this puts me – and many other soon-to-be MBA grads – in a bit of an awkward position going forward.

My goal is to work in a CSR role within a big consumer brand, so I’ve stacked my resume with CSR-related projects and classes to show future employers that I know what I’m talking about.

But if in the end it turns out that these kinds of activities don’t necessarily translate into a job-seeker’s “competitive advantage,” did I waste my time on these projects when I should have been doing something else? Obviously that’s being overly dramatic, but the issue certainly gives me pause.

In the end, the best advice I can give to CSR job-seekers is sort of a hybrid model:

Learn the business through functional experience, but bring sustainability to work every day.

Yes, getting that marketing, or finance, or supply chain experience under your belt will be crucially important – not only to build credibility and a reputation for yourself, but also as a way to help you think about sustainability and CSR opportunities from within.

But just because you’re working in a non-CSR function doesn’t mean that you should chuck your CSR know-how and skills out the window. On the contrary, your understanding and flexibility in CSR can only help you do your functional job better.

We can still hope that one day CSR will be such a corporate priority that all companies will recruit for these positions. In the meantime, my advice is to earn your stripes at a company you respect and admire, make your interest and intentions in sustainability clear, and with time transition into the CSR job you want.

As the old saying goes, “Your patience will be rewarded”.