The Role of Fair Trade in Corporate Social Responsibility

Abstract

Fair trade is coming out of its niche as the fair trade market is becoming more mature. At the same time companies are more eagerly integrating responsible activities into their corporate agendas and globalization plays a key role in both. The aim of this study was to discuss fair trade as a part of corporate social responsibility, particularly at the business level. The purpose was in identifying the roles and functions of fair trade within corporate social responsibility and how it is viewed by companies. Most research on corporate social responsibility has so far concentrated on corporate responsibility policies, programs and initiatives but not in particular activities or business performance. The contribution of this study is a further investigation in the relationship between fair trade and corporate social responsibility at a more detailed level.

The theoretical background for this study creates understanding about the role formation of fair trade within corporate social responsibility. It reflects on the elements of global and local pressures, which are manifested namely in corporate social responsibility and ethical consumerism. Furthermore the essence and system of fair trade was researched. The chosen research method was multiple case studies of a small number of companies and they were conducted by semi structured interviews. The results were analyzed particularly in relation to corporate social responsibility theories.

The main findings of the study are that fair trade has multiple roles in CSR and that they are used according to the needs of the companies in relation to their competitive advantage. In the light of the results of this study fair trade was first and foremost considered as normal business, but with additional values. The roles of fair trade were mostly related to supply chain management, realizing and communicating the responsible values of the company to stakeholders, and responding to the needs of different customer segments.