Fair Trade Mechanism
About the data
This metric covers one of the requirements under PF indicator 1.11 of the Poverty Footprint Tool* concerned with livelihoods, which refers to the ability of people living in poverty to meet essential needs for themselves and their family, i.e., adequate food, housing, clothing, and healthcare, in the context of supporting and protecting their rights. Beyond earnings, it refers to the opportunity for individuals to pursue options for personal development, upward mobility, career development, and security.
It also highlights how a company’s value chain and its procurement, manufacturing, and distribution policies and/or practices influence the ability of people living in poverty to access good-quality employment, earn a living wage or sustain a business, and participate in the market.The indicator demonstrates how the Corporate Areas of the “5 by 5 Framework” may contribute to or impact poverty. In general, these indicators also suggest to companies areas or opportunities for improvement.
*It is important to note that this guide is for reference purposes only. It suggests indicators that project partners may consider, but it is not a complete or exhaustive list. As highlighted in the Poverty Footprint Guide, the project partners will determine the specific indicators to be used in a Poverty Footprint study, tailored to the company’s business model, industry standards, country/regional context, among other criteria (Please see the “Implementation Section” of the Poverty Footprint Guide for more information on how to identify indicators).
Methodology
For project partners who have set out to research this indicator, the Poverty Footprint guideline suggests the following methodology:
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consider using secondary research to identify topics such as:
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legal minimum wages and benefits entitlement to workers in the country of study
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wage benchmarks (poverty thresholds, industry average, national average income, etc.)
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commodity prices (as per market prices)
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average household sizes (important to consider in living wage calculations)
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existing living wage calculations
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However, Wikirate researchers may review one of the following company statements using search terms like "fairtrade", "fair trade", "fair prices", and "local procurement" to determine whether the company in question publicly discloses if it has a fairtrade policy/mechanism in place:
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Poverty Footprint
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Corporate Social Responsibility Report
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Annual Report
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Other reports or surveys
Please provide the following contextual information in a comment to the metric value:
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any additional disclosure regarding supply chain disclosures, local vs. international procurement, etc.
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the page number of the report where this information can be found