Fair trade role in developing Corporate Social Responsibility

Abstract

Corporate social responsibility is becoming more and more important for the firms from developed countries. This study suggests that fair trade plays an important role in the development of corporate social responsibility. More specifically, this study seeks to answer the following research question; How does fair trade perform the main role in developing corporate social responsibility (CSR)? In the theoretical part of study; firstly, the idea of fair trade is presented, incorporating the historical developments in fair trade, its conceptualization, and its main motives. Secondly, the idea of CSR is presented, incorporating the historical development in CSR, its conceptualization, and major theories in CSR. Thirdly, the role of fair trade in developing CSR is discussed by identifying the importance of CSR factors.

To empirically examine the role of fair trade in developing CSR, this study employs the comparative multiple cases in Finland and Pakistan. The empirical data is collected through the annual reports of the firms, their publications and, semi-structured interviews. The main conclusions are as following: fair trade firms give equal importance to economic, social, and environmental responsibilities. Further, this study identifies the important factors included in each level of corporate social responsibility (i.e., economic, social, and environmental). Findings also reveal that producers are important stakeholders of the firms.