Ethical Purchasing

Cotton Supply Chain: organic & fair trade sustainability in the global market

2010 was a record-breaking year for cotton prices in global markets. In this post, Reeve Consulting presents an overview of recent market activity, considers the implications for working and environmental conditions in the supply chain and takes a look at how organic and fair-trade cotton sectors are fairing. We finish with a few suggestions for corporate and governmental purchasers looking to reduce brand risk and improve ethical and sustainable purchasing practices when it comes to cotton goods.


Flickr / kimberlykv

Cotton is the largest non-food crop in the world with over 24.3 million tonnes consumed worldwide annually. Did you know it’s also the largest employer? From farm workers to retail employees, an estimated 1 billion people are involved in the growing, processing and selling stages.

Given the ubiquity of cotton, it’s significant that 2010 was an unprecedented year for the commodity in global markets. The price doubled in a year and broke the $1 (U.S.) per pound level for the first time in 15 years.

Globe and Mail / Bloomberg

Rising prices affects the entire supply chain

A number of factors have been attributed to the sudden price increase, a main one being poor weather conditions in top growing regions, including floods in Pakistan, a severe cold snap in China, crop-killing hailstorms in Texas and, more recently, flooding in Australia. Speculation has played a significant role, as well as export restrictions put in place by India (the second-largest cotton producer) to protect domestic supplies and prices.

Consequently, the clothing sector is feeling the squeeze of both increasing input costs and a weak consumer environment. According to media reports, the prices of jeans, t-shirts and other cotton apparel will likely increase 2 – 15% in 2011.

Clean Clothes Campaign

To avoid passing a price hike to consumers, clothing companies may reduce costs by mixing in less expensive, synthetic fibers or by decreasing pack sizes on smaller bulk products like socks. Of greater concern is that companies will move production to lower wage countries with lower duty tariffs and weaker environmental restrictions. As examples, consider how garment workers demanding a fair minimum wage are currently being treated in Cambodia and Bangladesh. Anticipating such tactics, the Ethical Trade Initiative released a statement in late-September urging retail buyers to factor in the cost of a living wage for workers in their price negotiations with garment suppliers.

Organic cotton prices are linked to conventional cotton prices

A recent edition of Engage, an e-newsletter published by the Organic Exchange, takes a close look at the organic cotton industry. The opening article suggests the extraordinary times experienced by conventional cotton have on the one hand created a beneficial seller’s market. At the same time these conditions have had a potentially damaging impact on the sector by leveling the price of organic and conventional cotton. As the Organic Exchange (OE) puts it:

“Farmers are seeing their carefully tended organic harvest end up in conventional supply chains. Organic cotton procurers are struggling to meet their usual premium commitments (which don’t make sense anymore) and on top of this the lag time for organic buyers to respond to the market is adding a further complication.”

The article concludes that if organic cotton is to be secure in a stable, appropriate value chain it needs protection from the dramatically changing commodity price. This could come in the form of working partnerships that deliver benefit to farmers as well as buyers.

This concept is further covered in a recent article in the World of Organic Agriculture – Statistics and Emerging Trends 2010 journal:

“The sector must address the protection of the farm and fiber business model to ensure farmers and those who work with them receive sufficient returns to maintain investment in farmer development and productivity.”

Protection from the commodity market rollercoaster

A number of programs have attempted to protect cotton from market conditions. Perhaps the best known is the fair trade movement.  We’ve written a number of posts on the Reeve Consulting blog about the new garment certification program unveiled in 2010 by Fair Trade USA. For the first time the full supply chain of a product, not just the agricultural inputs, can receive fair trade certification ensuring workers are paid a fair, living wage for their goods and services. While only a handful of brands have completed the certification process, recent reports indicate more companies are working with Fair Trade USA to acquire certification.

Flickr / kimberlykv

Another example can be found in the recent commitment by Anvil Knitwear to double the production of organic cotton in the U.S. Through the Texas Organic Cotton Marketing Cooperative, Anvil will pay a premium for organic cotton as well as purchase any cotton making a transition to organic at a price close to the premium. The hope is that having a guaranteed buyer will encourage conventional cotton farmers to switch to organic production.

Social Alterations, an online education lab for socially responsible fashion design, has also focused on this issue and recently shared a post outlining approaches undertaken by two other global commodities – coffee and cocoa – that have similarly attempted to address the volatility of global commodity prices.

Purchasing cotton responsibly: ethical and sustainable purchasing considerations

When it comes buying cotton goods, purchasing departments can reduce risk and improve supply chain practices by considering the following:

  • Making a formal commitment to specify and support sustainable forms of cotton in purchasing decisions (e.g. organic, fair trade, ethically sourced)
  • Considering the origins of cotton goods including. More specifically, the working and environmental conditions under which they were made
  • Investing in long-term relationships with suppliers and focusing on continued improvement

To learn more about how our clients and organizations are benefitting from these and other sustainable supply chain practices contact us.

Reeve Consulting published in Canadian Property Management Magazine

Reeve Consulting recently published an article in Canadian Property Management Magazine titled “Spending Sustainably: Municipalities Leverage Purchasing Power for Broader Goals”. The article provides a brief introduction to ethical and sustainable purchasing and takes a closer look at the Municipal Collaboration for Sustainable Purchasing (MCSP) facilitated by Reeve Consulting. The impressive achievements of Shannon Clohosey, Sustainability Projects Manager, and her team at the City of Whitehorse are a focus throughout the piece. Read the full article HERE.

Fair Trade Certified Apparel Now Available

Flickr / Shared Interest

In early-May Reeve Consulting reported that Fair Trade Certified jeans and t-shirts would be available in the United States this fall. After more than 3-years in the works, Trans Fair USA’s apparel pilot program has certified it’s first cotton garments.

Previously only the agricultural inputs of products, such as cotton, could be Fair Trade Certified in the United States. This new certification for Apparel and Linens is the first social, economic and environmental standard that directly benefits workers at both ends of the supply chain – the farmers who grow the cotton and the workers who sew the garments.

The new standard has two parts:

Obligations of Factories, which includes Fair Trade management systems, core labor standards from ILO Conventions and multi-stakeholder initiatives; and,

Obligations of Buyers, which explains the requirements for US companies interested in using the Fair Trade Certified label on cotton products.

Fair Trade garments for uniforms & corporate team apparel

Flickr / Wonder Mike

While there are many companies still undergoing the certification process, a number of early adopters, Maggie’s Organics, Hae Now and Tompkins Point Apparel, are currently selling Fair Trade Certified apparel (mainly shirts) through their online stores. All companies offer styles that would be suitable additions to uniforms and corporate team apparel, ship to Canada, and offer wholesale discounts for larger orders. We at Reeve Consulting look forward to seeing a broader style selection of Fair Trade apparel emerging over the coming months.

Reeve Consulting Invited to Work with Sochi 2014 Organizing Committee

On the heels of the 2010 Vancouver Winter Olympic’s BuySmart Program’s success, Reeve Consulting has been approached by the Organizing Committee for the 2014 Winter Games in Sochi to help design and build an environmental procurement and sustainable sourcing program.

Flickr / roland

A sustainable purchasing program will enable organizers of the 2014 Winter Games to leverage procurement to meet sustainability objectives including zero waste, carbon neutrality and sustainable economic development of the surrounding Krasnodar district. These targets have been outlined in both an environmental strategy adopted by the advisory committee in 2009 and subsequent environmental procurement policy drafted by Reeve Consulting and adopted by the Sochi 2014 Organizing Committee in June of 2010.

Flickr / maiak.info

Reeve Consulting will be working with executives and senior managers from the Environmental Support and Sustainability departments of the Organizing Committee to build tools, develop procedures and identify high profile purchasing opportunities to support implementation of their sourcing policies.

Tim Reeve will be traveling to Moscow to meet with members of the Organizing Committee in late-November and again in February of 2011. Check back for updates from the field! You can also follow Tim’s trip on Twitter @ReeveConsulting.

Cadbury Dairy Milk Goes Fair Trade in Canada

Flickr /xelcise

If you pick-up a Cadbury Dairy Milk bar in Canada these days you may notice some changes to the packaging. Since this summer, Cadbury’s Dairy Milk line has been fair trade certified. The wrappers now include an internationally recognized symbol that assures the sugar and cocoa have been purchased from producers paid a fair wage for their crop. Cadbury’s first fair trade bars were released in the UK and Ireland in 2009 and more recently in Canada, Australia and New Zealand in 2010. According to the Cadbury website, going fair trade will quadruple the sales of fair trade cocoa from Ghana and affect over 40,000 cocoa farmers.

The fair trade marketing campaign:

To accompany the release of its fair trade line, Cadbury has unveiled a marketing campaign that invites people to “see the big fair trade picture”. The campaign features print, billboard and online advertising as well as a redesigned website dedicated to the brand (dairymilk.ca). At the centre of the campaign is a series of murals in Toronto and Montreal designed by a Ghanian artist, each of which focuses on a particular benefit of fair trade. The murals fit together like puzzle pieces to present the “big picture”.  Themes of the murals include “Improving Local Infrastructure”, “Providing Access to Clean Water”, “Improving Local Health Care” and more. Out-of-home advertising also featured a summer street campaign that invited passersby to sign a petition supporting fair trade in Canada.

Is big business good for fair trade?

This move has brought plenty of attention to Cadbury and has some questioning if big business’ increasing interest in fair trade is good for the sector. On the one hand, more corporations moving some of their buying to fair trade could have a large positive impact worldwide. Further, the greater availability of fair trade certified products could raise awareness among consumers. There’s also the hope that other corporations will note their competitors shift and joins suit, for example Hershey’s or Nestle.

But is it enough for Cadbury to convert one of its lines to fair trade designation? If they’re committed to the tenets of the movement, shouldn’t they be buying fair trade inputs for all their products? It’s a good question. A skeptical view of Cadbury’s fair trade Dairy Milk may lead one to conclude its primarily a marketing stunt; an attempt to improve Cadbury’s public image without a full commitment to sustainability.

It’s a start:

At Reeve Consulting we’re not quick to jump to this conclusion. We support incremental change and from experience realize that broader change takes time.  Companies face many challenges in converting their supply chains and in most cases need to start small. An important element for us is that companies acknowledge there are problems beyond those they’re starting with, and that moving forward there’s a plan for these issues to be addressed.

We’re hoping to discuss this further with Cadbury’s Ethical Sourcing Manager this week when we attend the Sustainable Supply Chain Solutions conference in San Francisco. Watch this space for a follow-up post on what we find out. We’ll also be tweeting from the conference at @ReeveConsulting.

City of Vancouver Commits to Fair Trade Java; the Greenest City just got a little bit Greener

Flickr / 96dpi

The City of Vancouver is keeping pace with several other Canadian municipalities by applying to become a “Fair Trade Town.” This commits the City to purchasing Fair Trade coffee, tea and sugar, as well as other Fair Trade products for meetings, offices and cafeterias. Eight Canadian towns have already received certification and at least eleven other Canadian municipalities are working towards becoming “Fair Trade Towns,” including Montreal, St. John’s, and Quebec City.

Transfair Canada – Canada’s third-party certifier of Fair Trade products – provides the official “Fair Trade Town” status, which is slated to happen for Vancouver this week, just in time for World Fair Trade Day (Saturday, May 8th). Vancouver will be Canada’s largest municipality to have achieved this designation.

Fair Trade guarantees that business supply chains function according to standards of fairness, transparency and accountability – setting the proverbial ‘level playing field’ – especially for those at the producing end of the supply chain. Vancouver’s commitment to Fair Trade means the City will use its spending power to advance several social and environmental objectives, such as the ‘green economy’, ‘fair labour practices’ and ‘toxic free’ food production.

In a report presented to Vancouver City Council, ethical and sustainable purchasing has been identified as a key priority by Mayor Robertson’s Greenest City Action Team, and is seen as a strategic and cross-cutting lever for making Vancouver a leading edge sustainability organization.

We at Reeve Consulting believe these kinds of commitments are a very important piece in creating a green and fair economy; an economy from which everyone can derive benefit. We think more municipalities should commit to these policies. We also know that public declarations are just one step in a process of positive change. They are an important declaration. But as many will attest, maximum strategic impacts come when innovative policy meets with outstanding implementation.

Fair Trade Certified jeans and t-shirts coming to stores in the U.S. in 2010!

Flickr / geishaboy500

When buying clothes in North America, it is quite difficult to know whether or not they were produced in a sweatshop. But now, two leading independent groups have teamed up to try and make it easier for consumers to select ethically produced clothes, simply by looking at the label.

Transfair USA and Social Accountability Accreditation Services Social Accountability Accreditation Services (SAAS) – the agency that oversees the SA8000 certification for ethical factories (i.e. “non-sweatshops”) – teamed up this year to integrate auditing processes in a pilot project that will result in the first Fair Trade Certified jeans and t-shirts in the USA market! A groundbreaking effort on three fronts.

First, Fair Trade certifying bodies have been grappling to extend Fair Trade Certification beyond basic agricultural commodities (e.g. coffee, tea, fruit and cotton) to the production of garments and other factory made items. This recent move by Transfair USA to extend the Fair Trade label to clothing is the first of its kind. Consumers will soon be able to look at the label on their jeans and trust that they were not produced in a sweatshop.

Second, it is rare to see two third-party certifying bodies double check each other’s work, so to speak. Often, our trust, as consumers, must be put into a single certification system. Now, however, when consumers buy Fair Trade Certified apparel in the USA (on shelves in Fall 2010) they can be assured that SAAS was also closely involved in ensuring that the garments were not stitched together in a sweatshop. This brings a new level of strength and legitimacy to third-party product certifications.

Third, Transfair USA and SAAS’s partnership is also groundbreaking in that they are working together to make it easier for factories to demonstrate compliance with ethical standards. Ethical compliance auditing processes can be cumbersome and many manufacturing facilities are reporting “audit fatigue” as a result of having to complete multiple audits per year for different agencies. Transfair USA and SAAS’s efforts to integrate their auditing process will help alleviate some of this pressure.

This type of partnership between Transfair USA and SAAS will hopefully generate a ripple effect in the third-party product certification space. Will we see more certifying bodies joining forces to harmonize standards and auditing processes? Or will consumers continue to have to wade through multiple certifications and try to decipher which ones are better? Reeve looks forward to seeing how this will influence other agencies and maybe one day Transfair Canada will partner with someone like SAAS and bring Fair Trade Certified clothing to our stores.

Click here for more information on this partnership.

Environmental Purchasing “Torch” passes to Sochi 2014

Flickr / thelastminute

The Organizing Committee for the Sochi 2014 Winter Olympic Games seems poised to continue the strong legacy of ethical and environmental purchasing within the Olympic community. Organizers for the Sochi Games are currently working with a team of strategic advisors to design an environmental procurement program that will result in a 2014 Winter Games with less waste and lower GHG emissions. Sochi has been particularly interested in the Vancouver 2010 Buy Smart program, an ethical and sustainable purchasing program that Reeve helped design and implement, which was recognized as setting a new bar for Olympic purchasing programs.

Reeve has partnered with Shaneco, a Russian environmental consulting firm, to create an Environmental Procurement Policy (EPP) for Sochi 2014. The draft EPP has been designed to foster procurement practice that is in harmony with nature, is climate neutral, minimizes waste, and enlightens the suppliers of the Sochi region as well as the broader community. Dmitriy Kolosov, head of Environmental Programming for the Sochi 2014 Organizing Committee, stressed that it is imperative to use the high profile of the Winter Games to “enlighten” the Russian supplier community in order to have a lasting, positive impact on the natural environment of the Sochi region.

So far it has really been the Organizing Committee’s, such as Vancouver 2010 and London 2012, who have really led the way within the Olympic community at increasing the uptake of ethical and environmental procurement. It is interesting to note a comment made by Derek Wyatt, Chair of the All Party Parliamentary London 2012 Olympic and Paralympic Group. At the Sports, Legacy and Sustainability Dialogue, held during the Paralympic Winter Games in Vancouver, Wyatt talked candidly about the need for the International Olympic Committee (IOC) to offer greater commitment to ensuring an environmental sustainability legacy in Host Cities. In his opinion, OCOGs and Host Cities carry the environmental sustainability agenda with little support from the IOC.

The new Candidature Procedures, the procedures for bidding to host the 2016 Games, now ask bid cities to demonstrate the steps they will take, in regards to sourcing licensed products, to ensure that social and environmental factors are taken into account in making selection decisions. This is the first time this question has been asked of bid cities, but this direction is limited to licensed merchandise (products that carry the Olympic logo) and does not extend to sourcing sustainable items for operational purposes. Reeve hopes that as Organizing Committees continue to push this agenda forward that the IOC will consider ways in which it can offer more specific direction to sourcing sustainable products and services for all functions of the Olympic Games.

Please share your stories about other organizations that are also pushing the ethical and/or environmental purchasing movement ahead in the comment section of our blog.

Bridging the Gap Between Local Action and Global Impact

Engineers Without Borders / Bridging the Gap

Mohandas Ghandi once said: “Be the change that you want to see in the world.” This was the inspiration behind this year’s Engineers Without Borders’ (EWB) Bridging the Gap Conference held at UBC on March 27th.

Compelling keynote presentations delivered by Shauna Sylvester and Dr. Hans Rosling and several breakout sessions cut across four main themes: EWB’s Values and Capacity Building, Advocacy, Serving Global Society, and Connecting to the Developing World. According to Rogayeh Tabrizi, event organizer extraordinaire, “we came together to create a space for dialogue, for understanding, for sharing the passion, for helping each other see the world around us better.”

The Fair Trade breakout session encouraged critical discussion by walking participants through what it means to “trade fairly.” Workshop facilitators Stacey Toews, of Level Ground Trading, and Randy Hooper, of Discovery Organics, talked candidly about how true fair trade has to go beyond just putting a Fair Trade Certified logo on a package. From their perspective, building direct relationships with producers that are based in transparency, dialogue and respect is really what fair trade is about.

This contention resonates across the field of ethical and sustainable purchasing. Countless examples of successful ethical and sustainable purchasing (ESP) programs demonstrate that focusing on supplier or producer relationships is imperative. In interviewing leaders and pioneers in this field, Reeve has heard procurement professionals say time and time again that without building strong relationships with suppliers their ESP initiatives would have been less successful.

When you buy products or services do you just look for a third-party ecolabel to ease your conscious or do you go beyond to learn more about the supplier or producer who is behind the product? You may not have time to build longterm relationships with all your suppliers, but even just asking a few simple questions about their business practices or their relationships with their contractors will facilitate understanding and greater success in achieving your sustainability goals. To paraphrase Toews and Hooper, go beyond product labelling and dig deeper…get to know the people behind your products and enter into dialogue with them.

Who Sets the Standards for Ecolabels?

It is common practice to rely on third-party ecolabels to define environmental criteria for particular purchasing categories.  Ecolabels provide third-party verification of the environmental and social standards related to a particular product or service category and can be used to reduce the onus of creating environmental criteria.  By understanding how to identify a mature and credible ecolabel purchasers can rely on these pre-determined criteria and simply specify that the product or service in question carry this ecolabel, removing the burden of developing criteria.

There are over 350 ecolabels in the global marketplace so it important to understand how to identify mature and credible ecolabel standards, as all are not created equally.  There are three main international expert sources that provide definitions of different types of ecolabels and set out parameters for developing high quality ecolabels that consumers can trust.  The following provides an introduction to these organizations and briefly describes their efforts to set international parameters for ecolabelling.

International Parameters for Ecolabels: Key Organizations and Definitions

The following organizations have set international definitions and parameters for ecolabels:

  1. Global Ecolabelling Network (GEN)
  2. International Organization for Standardization (ISO)
  3. ISEAL Alliance

Global Ecolabelling Network

GEN is a non-profit association of third-party environmental performance recognition, certification and labeling organizations founded in 1994 to improve, promote and develop the ecolabelling of products and services.  GEN defines different types of ecolabels, categorizes existing ecolabels, and sets generic environmental criteria for specific product and service categories.  As a membership based organization, GEN provides assurance that member organizations are meeting their parameters for ecolabelling.

For more detail visit: http://www.globalecolabelling.net/whatis.html

International Organization for Standardization

ISO is the world’s largest developer and publisher of international standards.  It brings together a network of national standards institutes from 159 countries to build consensus of global standard setting.  In particular, they have created the ISO 14020 series of standards that define parameters for developing environmental labels and declarations.  This series includes ISO 14024, 14021 and 14025, which define the parameters for Type I, II, and III ecolabels, respectively.

For more detail visit: http://www.iso.org/iso/catalogue_detail.htm?csnumber=34425

ISEAL Alliance

ISEAL is a global association for social and environmental standards.  It works with established and emerging voluntary standard systems to develop guidance and strengthen the effectiveness of these standards.  They also work with companies, non-profits and governments to support their referencing and use of voluntary standards.  They have developed Codes of Good Practice that are applied to leading standards systems and are an ISEAL membership requirement.  As a membership based organization, ISEAL provides assurance that member organizations are meeting their parameters for ecolabelling.

For more detail visit: http://www.isealalliance.org/content/codes-good-practice

Bookmark and Share