Saturday, July 13, 2024

Does Buying Fair Trade and Organic Products Really Make a Difference?

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Does Buying Fair Trade and Organic Products Really Make a Difference?

A new study evaluates the efficacy of voluntary product certifications such as certified organic and certified fair trade.


A new press report published by the London School of Economics (LSE) suggests that voluntary product certifications, such as certified organic and certified fair trade, aren’t just marketing hype. Instead, they can lead to very real and measurable impacts for the environment, economic well-being, and social development.

These certifications can influence rapid improvements in production practices among suppliers, and they can also bring about additional mechanisms for helping communities adapt to technological and social change.

Not just about the hype

The authors explained that issues such as “greenwashing” or “fair-washing”—which involve businesses seeking recognition for sustainable practices without actually making any commitments to them—are typically not a concern.

The findings suggest that support for certification is not about exploiting the willingness of consumers to pay a bit more for their products; instead, businesses may not receive direct, short-term increases in profits. More often, the decision for businesses to certify their products usually comes from good overall business practices—rather than seeking price premiums.

Direct impacts

  • Environmental: Many environmental sustainability initiatives help improve ecosystem integrity, biodiversity, and the well-being of individual species.
  • Economic: Fair trade certifications put explicit focus on improving economic conditions through minimum prices and social premiums, as well as other social factors such as technical assistance, access to credit, and opportunities to diversify income sources. Several studies have shown that fair trade certification often provides economic benefit in the form of access to market channels and business opportunities.
  • Social: Although less studied, the report found evidence that product certifications have been shown to improve living and working conditions, rights and benefits, and community relationships.

Indirect impacts

The study suggests indirect impacts could be more substantial and possibly greater than the direct impacts from product certifications.

Examples of the potential indirect impacts include improvements in learning and market demand. Also, the individual credible standards have created a new industry of certifiers in which governments and businesses can turn to—rather than relying on their own capacities to evaluate products.

The most significant benefits, however, stem from the rich interactions among certification systems, regulatory bodies, and other forms of governance. Often, the standards, practices, and performance expectations established by a voluntary certification body will eventually become the norm for producers, consumers, and even other institutionalized regulations.

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