1. Ecolabel Index, http://www.ecolabelindex.com.
2. Different initiatives use different versions of the term “fair trade.” Throughout this book, we use the generic, lowercase version (“fair trade”) when referring to the concept or model in general. When referring specifically to certification by Fair Trade USA (previously known as TransFair USA), we follow that initiative (and many researchers in North America) in capitalizing the term (“Fair Trade”). When referring to certification by Fairtrade International (previously known as the Fairtrade Labeling Organization), we follow that initiative (and many researchers in Europe) in combining the terms (“Fairtrade”).
3. Whether a “best in class” or “continuous improvement” model is more central depends in large part on whether the founding constituency of firms seeks to gain a competitive advantage over other companies (in which case the first model is preferable) or seeks to spread the costs of improving industry practice broadly across firms (in which case the second is more attractive) (see Auld [2014] for an analysis of this sort).
4. Furthermore, even within a single initiative there may be a wide range of standards covering environmental issues, labor rights, community rights, and more. As we discuss in the conclusion, it seems that not all standards are implemented equally.
1. This is the most recent and highest-quality data available. More information can be found at the European Social Survey website (http://www.europeansocialsurvey.org) and at the Inter-University Consortium for Political and Social Research (http://doi.org/10.3886/ICPSR04607.v1). Our operationalization of the data as well as the statistical models are described in the appendix.
2. See figure 1.3 for the list of countries.
3. These questions are widely used in survey research, having become the backbone of much writing on “political consumerism.” Some support for the validity of the measure, at the aggregate level at least, is provided by the following: at the country level there is a strong correlation (Pearson’s r = 0.804) between the rate of buycotting and per capita spending on organic food (Koos 2012).
4. Researchers have proposed a variety of explanations for conscientious consumption choices. These mostly focus on motivations and beliefs, and we see our emphasis on opportunities as an important corrective to the voluntarism of much of the research literature.
5. We used hierarchical logistic regression models that allow us to account for the nested structure of the data (individuals within countries).
6. Denmark is the leading country with more than $200 per capita spent on organic food in 2010 (Willer and Kilcher 2012). Sweden ($116), Germany ($99), the United States ($82), and France ($74) are following. People in the UK are second to last in Europe, with $43 spent on organic food in 2010, followed by Spain ($27). Belgium and the Netherlands assume a middle ground, with a bit more than $50 per person spent on organic food.
7. This is just a small sampling of the criticism of the fair trade system. Critics have raised numerous questions about who is able to get into the system at all, whether premiums actually reach farmers, and whether the system undermines self-sufficiency or distorts market forces. In chapter 4 we provide a closer look at fair trade certification in agriculture. Our research there suggests that the fair trade model can be effective, but whether it actually is depends crucially on local circumstances.
8. These results reflect average predicted probabilities based on our analyses of ESS data.
9. Overall, researchers have tended to find rather mixed results regarding trust in institutions (e.g., Goul Andersen and Tobiasen 2004; Stolle et al. 2005; Strømsnes (2005).
10. Scholars of political engagement have distinguished between external political efficacy, which has to do with the perceived responsiveness of the political system, and internal political efficacy, which refers to individuals’ sense of personal competence (Craig et al. 1990).
11. See Smith (2014) for a new approach to comparisons of this sort.
12. Our results in this section come only from the European sample. All models control for the individual factors discussed above. The result tables can be found in the appendix.
13. One might also consider states’ roles in governing conscientious consumption itself. In some countries the state has played a vital role in initiating eco-labels in cooperation with NGOs—for instance, the US state label for organic food (USDA organic)—and state involvement in labeling is believed to positively affect conscientious consumption (Crespi and Marette 2005). The reason for this is that states often have a higher claim to legitimacy as regulatory agents and also have more resources than private NGOs to promote and control the label and sanction “greenwashing.” The empirical results for state involvement are rather mixed. While Sebastian Koos (2011) does not find any support for the impact of state labeling across a large set of European countries, Carsten Daugbjerg and Kim Mannemar Sønderskov (2012) show in a comparison of the United States, UK, Sweden, and Denmark, that state labeling seems to have a positive impact on market development.
14. To be sure, supply and demand co-evolve, and it is difficult to disentangle them. But keep in mind that our measure of supply is focused on particular types of products, while our measure of conscientious consumption is broad-based.
15. Although one might argue that this is due to the high correlation between post-materialism and affluence, both measures used here are not strongly correlated.
16. A similar pattern can also be observed for boycott behavior. Note that we do not have evidence for this kind of interaction between post-materialism and income at the individual level.
1. Based on information from RESOLVE (2012) and www.ecolabelindex.com.
2. The countries are Belgium, Denmark, France, Germany, Netherlands, Spain, Sweden, and the United Kingdom.
3. Larger percentages said they had done these things at least once in the past year, but the gaps remain, with around 25 percent more students saying they had bought an organic item than saying they had bought something for political, environmental, or ethical reasons.
4. This research focuses on the United States (Dickson 2001; Lourerio and Lotade 2005), Europe (De Pelsmacker, Driesen, and Rayp 2005), and Australia and Hong Kong (Auger et al. 2003, 2008). The type of premium analyzed varies by study, which makes comparisons difficult. In fact, several studies do not estimate the size of premium that consumers would be willing to pay. Instead they use the analysis of the relative value that respondents place on product attributes in their survey/experiment to extrapolate the likelihood of future purchasing decisions. For instance, Pat Auger and his colleagues (2003) claim that “the average consumer in our sample is quite willing to pay a significant percentage of the value of the product for specific ethical features” (299). However, they analyze “purchase intentions,” not actual purchases of products in real market settings.
5. See Arnot et al. (2006) on willingness to pay (WTP) for Fair Trade–labeled coffee in a university coffee store, Hiscox and Smyth (2006) for WTP for luxury home goods with an ethical production label, and Hiscox et al. (2011) for WTP premiums on Fair Trade coffee beans on eBay.
6. The label specifically said “A Fair Price to Support Fair Trade.”
7. The label for the control condition read “Support Fair Trade.”
8. Those who had boycotted in the past year scored about a half a point lower than others on a five-point scale of agreement with that statement, controlling for political views and a number of other factors.
1. This estimate is based on our analysis of FAOStat data, available at http://faostat.fao.org.
2. See Dauvergne and Lister (2011) for much more on these companies.
3. IKEA’s enormous scale has led it to invest in its own factories to produce particleboard and some of them to manufacture furniture. IKEA has also led the way in pushing some of the costs of production onto consumers themselves (the “prosumer” model), who must assemble the furniture sold in flat packs.
4. Some companies (e.g., International Paper and Weyerhaeuser) have been selling off their timber holdings in recent years, while others (e.g., Stora Enso) continue to expand their own timber plantations (Stringer 2006).
5. Interview with NGO representative, United States, March 8, 2004.
6. Interview with NGO representative, United States, March 17, 2004.
7. Interview with FSC founder, United States, July 22, 2002.
8. Interview with retail executive, United States, March 24, 2004.
9. Interview with auditor, Beijing, July 14, 2011; interview with auditor, Beijing, March 14, 2014; analysis of public summaries of audit reports.
10. The EU Timber Regulation requires companies that introduce timber products into the European market to exercise “due diligence” in ensuring legality in their supply chains. The Lacey Act uses a somewhat similar standard of “due care” and puts sellers of wood products at risk of having products seized if they can be traced to illegal logging operations. See Bartley 2014b for more information.
11. Interview with auditor, Jakarta, September 20, 2010.
12. They found, for instance, that “though the details [of a corrective action related to Reduced Impact Logging (RIL), a more sustainable harvesting method] have been addressed there were issues beyond the scope of the specific focus of this verification audit that need to be noted,” and they went on to describe further weaknesses in the RIL system (SmartWood 2008c, 3–4).
13. Interview with forestry researcher, Bogor, June 30, 2008; interview with NGO representative, Jakarta, September 21, 2010.
1. We do also discuss the evidence regarding fair trade and organic certification of coffee, referencing a growing body of work that interested readers can consult. There is also some research on fair trade flowers, found, for instance, in Lyon and Moberg (2010) and Dolan (2007).
2. Three factors account for the stagnation of food demand in affluent countries. First, as household incomes rise, demand for food does not rise proportionally, meaning that, over time, continued economic growth drives smaller and smaller increases in total food demand. Second, affluent countries exhibit low and declining rates of population growth. Third, the rate of economic growth in affluent countries has also gradually declined, limiting demand growth in general.
3. Between 1989 and 2007 the total personal consumption expenditures of the top 5 percent of income earners in the United States grew at a rate of 5.2 percent versus 2.8 percent for the rest of the US population. Since the 2007 recession the consumption behavior of the wealthy has strongly diverged from the rest of households. While consumption collapsed among the bottom 95 percent of earners, it held steady and then rebounded with the renewed income growth in the top 5 percent. See Cynamon and Fazzari 2014.
4. This dynamic has been central to the international economy since its very birth. Sidney Mintz (1985) describes how sugar’s transformation from a luxury of European royalty to a staple food of the industrial proletariat depended on the establishment of sugar-producing colonies in the Caribbean that were at once a source of cheap sugar and a market for cheap industrial goods.
5. According to the European Commission, Turkey, the United States, South Africa, and Chile accounted for approximately 40 percent of imports to the EU-27 in 2011. http://ec.europa.eu/agriculture/statistics/trade/2011.
6. According to the UN Food and Agriculture Organization’s statistical database (FAOSTAT), 98 percent of China’s raw soy imports come from these three countries. http://faostat3.fao.org/faostat-gateway/go/to/download/T/TM/E.
7. Reuters, “Walmart Plans More Stores and E-Commerce in China,” New York Times online, October 24, 2013 (http://www.nytimes.com/2013/10/25/business/international/wal-marts-china-plan-to-focus-on-e-commerce.html)”; “Walmart Global eCommerce Completes Increased Investment In Yihaodian,” Walmart.com, October 26, 2012 (http://news.walmart.com/news-archive/2012/10/26/walmart-global-ecommerce-completes-increased-investment-in-yihaodian.)
8. Observers of the US food system assert that firms exert market power and distort supply markets even when their market shares are as low as 20 percent (James, Hendrickson, and Howard 2013).
9. The US Forum for Sustainable and Responsible Investment (US SIF), CERES, and other socially responsible investment funds and portfolio management organizations play a similar role.
10. Currently Fairtrade International maintains commodity-specific certification standards for cocoa, coffee, tea, sugar, vegetables, fresh fruit, preserved fruits and vegetables, cereals, herbs and spices, oilseeds, nuts, honey, cotton, and flowers and plants, as well as sports balls, gold, and timber.
11. The U.S. market had previously been dominated by TransFair USA’S black-and-white containers label.
12. The FSC also inspired the Marine Stewardship Council, which in some respects was copied quite directly from the FSC, except that its architects wanted to avoid the “psychotic democracy” that had slowed the FSC’s growth (see Auld 2014).
13. “Transforming Markets,” WWF Global, http://wwf.panda.org/what_we_do/how_we_work/businesses/transforming_markets.
14. Basic information on the members is available through the RTRS website, www.responsiblesoy.org.
15. GM Freeze, http://www.gmfreeze.org/publications/briefings/131.
16. Corporate Europe Observatory, http://corporateeurope.org/agribusiness/2008/06/round-table-ir-responsible-soy; GM Freeze, http://www.gmfreeze.org/news-releases/32.
17. For example, Control Union Certification is accredited to certify for the RTRS, RSPO, and FSC. Various branches of the global firm SGS are accredited to certify for the RTRS, FSC, and SAI.
18. Fairtrade International Annual Report, FAOSTAT.
19. Three countries—Argentina, Brazil, and Paraguay—account for 93 percent of the certified area and 95 percent of certified soy volumes. Calculated using production data from FAOSTAT (http://faostat3.fao.org/faostat-gateway/go/to/download/Q/QC/E) and the RTRS (http://www.responsiblesoy.org/index.php?option=com_content&view=article&id=297&Itemid=181&lang=es).
20. Nearly half of the RTRS’ members are drawn from European countries. Dutch agro-industries have committed to making all soy used in the Netherlands RTRS-certified in the future, and similar pledges have been made in Belgium and the UK.
21. FAOSTAT Country Rankings by Commodity, http://faostat3.fao.org/faostat-gateway/go/to/browse/rankings/countries_by_commodity/E.
22. FAOSTAT Food Security Statistics, http://faostat3.fao.org/faostat-gateway/go/to/download/D/FS/E.
23. As the government began promoting ethanol as a fuel, this provided a second outlet to support smallholder sugarcane production.
24. These are estimates given by the sugar industry association and the Paraguayan Fairtrade Producers’ Federation.
25. Interview with purchasing company representative, July 10, 2009.
26. Interview with company representative, July 13, 2009.
27. Interview with purchasing company representative, July 10, 2009.
28. After recent land sales, DAP manages 11,350 hectares in five properties in the department of San Pedro and an additional 7,000 hectares of rented land elsewhere in Paraguay.
29. NF Developers, http://www.nfdevelopers.com/NFD_Agro_eng.htm.
30. Gustavo Setrini and Lucas Arce, “Paraguay’s Impeached Democracy,” Project Syndicate, July 9, 2012, http://www.project-syndicate.org/commentary/paraguay-s-impeached-democracy.
31. Interview with company manager, February 15, 2013.
1. Based on our calculations from WTO trade data, www.wto.org/english/res_e/statis_e/statis_e.htm.
2. Based on WTO data.
3. Based on our calculations from WTO data.
4. The footwear industry has also been mobile, but at a slower pace, due to the larger capital investments necessary. In 1994 Reebok’s annual report disclosed that its footwear was made primarily in China (29 percent), Indonesia (28 percent), Thailand (14 percent), and South Korea (9 percent). By the time the 2000 report was released, South Korea had fallen off of the list, and China’s share had risen to 48 percent, with Indonesia and Thailand holding roughly steady.
5. Phone interview with union representative, July 8, 2002.
6. The association was previously known as the American Apparel Manufacturers’ Association, and WRAP initially stood for Worldwide Responsible Apparel Production.
7. Interview with auditor and consultant, New York, July 17, 2002.
8. “Monitoring: Assessing the Level of Compliance,” Business Social Compliance Initiative, http://www.bsci-intl.org/our-work/monitoring.
9. Interview with brand representative, Shenzhen, October 15, 2010.
10. Visit to factory in Dongguan, China, November 4, 2010.
11. The value of wages increased in China, Haiti, Vietnam, Indonesia, India, and Peru, but they declined in Bangladesh, Cambodia, the Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, the Philippines, and Thailand.
12. Some of these were slated to become part of the WRC’s “Designated Supplier Program,” which was derailed not only by opposition from the FLA but also by the dearth of qualified factories.
13. “Statement on the Rana Plaza Building Collapse,” Business Social Compliance Initiative, April 30, 2013, https://bsci-intl.org/news-events/statement-rana-plaza-building-collapse-bangladesh.
14. Interview with auditor, Ho Chi Minh City, May 28, 2007.
15. Interview with retail compliance official, Hong Kong, May 22, 2007.
16. Interview with brand representative, Shenzhen, October 15, 2010.
17. WTO data.
18. Interview with certification practitioner, Shenzhen, November 12, 2010.
19. Interview with committee representatives, Dongguan, November 4, 2010.
20. Interview with compliance official, Dongguan, November 4. 2010.
21. Interview with auditor, Guangzhou, October 26, 2010.
22. Interview with certification practitioner, Shenzhen, December 11, 2010.
23. Interview with compliance official, Shanghai, July 13, 2011.
24. Interview with certification practitioner, Shenzhen, November 12, 2010.
25. Interview with certification practitioner, Beijing, December 8, 2010.
26. These findings are based on a small number of interviews conducted by two Chinese research assistants outside two SA8000-certified factories in the Guangzhou area in the fall of 2010.
27. Interview with certification practitioner, Shenzhen, December 11, 2010.
28. Similar fates would befall some of the other unionized factories to be included in the WRC’s Designated Suppliers Program, creating further challenges for the organization’s attempt to promote an alternative model.
29. See “Accord on Fire and Building Safety in Bangladesh,” May 13, 2013, http://www.bangladeshaccord.org/wp-content/uploads/2013/10/the_accord.pdf.
1. The newspaper was awarded the 2013 Pulitzer prize for explanatory reporting for this series, titled “The iEconomy,” which ran throughout 2012. See “The iEconomy,” Business Day, International New York Times, http://www.nytimes.com/interactive/business/ieconomy.html?_r=0.
2. We use the term “electronics industry” to describe the population of firms that actively produce or manage the production of computers, computer peripherals, communications equipment, and similar electronic products. While these hardware firms may engage in other diversified technology services, a core aspect of their business focuses on the production of physical computer hardware. Lead firms in this industry almost always classify themselves within North American Industry Classification System (NAICS) codes for “Electronic Computer Manufacturing” (334111) and “Other Computer Peripheral Manufacturing” (334119).
3. These figures are based on our calculations derived from industry reports produced by IBISWorld, March 2010, http://www.ibisworld.com.
4. In addition, the tendency to equate conflict-free with DRC-free has frustrated legitimate mine owners there. As the DRC’s ambassador to the United States stated, “The private sector has been obliged to lay off people because they are not allowed to export. We really need to find a quick solution, otherwise this God-given potential that God put in the DRC might truly turn into some sort of curse” (qtd. in Banco 2011).
5. Asset manager Boston Common has posted a history of social investors’ discussions with Apple, which outlines the long duration of their involvement: “Boston Common Engages Apple Inc.,” Boston Common Asset Management, http://www.bostoncommonasset.com/news/press/apple-engagement.php.
6. The EICC code has been revised several times. The current version is available at “Code of Conduct,” Electronic Industry Citizenship Coalition, http://www.eicc.info/documents/CodeofConduct30vs40FINAL.pdf.
7. This study has yielded a number of articles and working papers (e.g., Locke, Distelhorst, Pal, and Samel 2012; Locke, Rissing, and Pal 2013; Locke and Samel 2012). We have integrated insights from several of these studies into our own framework. In this section we draw especially from Locke et al. (2012).
8. Telephone interview with HP senior manager, March 2009.
9. Hewlett-Packard Social and Environmental Reporting Audit Process Manual, 5th ed., May 11, 2007, provided to research team.
10. See Locke et al. (2012) for a full analysis of HP’s audit results.
11. Audit #447, Mainland China, 2005.
12. Audit #504, Taiwan, 2008.
13. Assertions about improvement rates are based on the 135 facilities audited more than once. Improvement is measured by comparing the percentage of compliant facilities at their initial audits with the percentage compliant in their final audits.
14. Audit #149, Mainland China, 2005.
15. Audit #150, Mainland China, 2007.
16. Interview with HR manager, China, 2009.
17. Audit #38, Mainland China, 2007.
18. There is variation, however. During MIT researchers’ observation of one audit in Mainland China, auditors demonstrated awareness of this and attempted to use other techniques to reduce discriminatory hiring. They discussed the current gender ratio with management, praising them for making progress toward gender balance since the last audit and encouraging them to continue working on it.
19. The capability program participants also had, on average, more time between their initial and final audits to address violations. The average time between first and final audits was two years eight months in the capability-building group and two years two months for the control group. See Locke et al. (2012) for a fuller analysis of capability-building programs.
20. This section draws on another paper resulting from the MIT study (Locke and Samel 2012). HP’s characteristics are reported as of 2009, the time of the study.
21. While this section draws on research conducted in HP’s suppliers’ Southeast Asian plants, the MIT study did find similar behavior in Chinese plants as well.
22. Interviews with HR managers, Johor Bahru, Malaysia, June 2009 and Penang, Malaysia, August 2011. Overtime is calculated on a weekly rather than a daily basis, which thus requires working weekends to earn premium pay.
23. Fairphone, fairphone.com, accessed January 17, 2014.
24. “Criticism in a Blog—What Do You Think about This?” Fairphone.com, https://fairphone.zendesk.com/hc/communities/public/questions/200680086-Criticism-in-a-blog-what-do-you-think-about-this-.
1. Carrol and Swaminathan (2000) develop this idea of resource partitioning through a study of the microbrewing movement.