Texas-Based Home Decor Business Builds An Entirely Fair Trade Supply Chain

The Citizenry announced this month that they are the largest US home decor retailer to have its complete product line made under standards guaranteed by the World Fair Trade Organization.

The Citizenry team, consisting of Rachel Bentley, Co-Founder, Carly Nance, Co-Founder, and Whitney Gantt, VP, Supply Chain, breaks down what this means and how they went through the process.

Chhabra: Which fair trade certification did you choose to use?

Bentley: In this case, we are talking about the World Fair Trade Organization. This group’s membership and audit process is a little different from Fair Trade International and Fair Trade USA. The World Fair Trade Organization was established in 1989 (before Fair Trade International) and played a leading role in defining overall Fair Trade standards for the organizations that followed.

Nance: From day one, we’ve had the desire to have the vetting and production processes we use for our entire product line audited and guaranteed by a third party. After researching all the certification possibilities, the World Fair Trade Organization made the most sense for our model. Their approach allows the process we use for our entire line, across all countries and categories, to be vetted, instead of only having a few products or categories fit within their auditing systems and guidelines.

Chhabra: Can you break down the differences with this certification?

Gantt: There are few notable differentiators to the World Fair Trade audit process vs. other certifications. The WFTO’s vetting system is designed for buyers/retailers who work with artisan partners vs. certifications for direct producers only. WFTO’s criteria and approach to audits encompassed all countries, categories, and origins. This was important for us to ensure all our products were made under a set of standards that had been vetted and approved by a third party. Most importantly for our model, WFTO’s audit criteria can accommodate the specific nuances of artisanal goods, which includes home work and piece wages vs. factory or agriculture expertise.

Chhabra: Citizenry has been in business for about a decade now. Why was now the right time to do this or was this something you wanted to do for longer?

Bentley: We founded The Citizenry explicitly to make a positive global impact at a meaningful scale. Prior to founding The Citizenry, I spent time in Asia working with an international strategy firm where I saw firsthand the negative impacts global supply chains have on human rights and the environment.

The ongoing, accelerating global crises today (global warming, pandemics, resource scarcity) are deeply connected to the impacts of these supply chains. Essentially, if a government begins to regulate labor practices or take steps to protect the environment, costs can increase, and global companies quickly move manufacturing to countries with less regulation. Ultimately, this system is creating tremendous inequality and environmental damage.

We knew we had to take a different approach. The data shows that handmade rarely equals fairly paid (less than 1% of textiles globally are made in fair trade conditions), and a new approach was necessary to turn the industry around,

From the very beginning, we have fully embraced Fair Trade principles. It just took time to build our team, product line, and earn the trust with our partners to take on the two plus years’ worth of work required to receive the WFTO guarantee but we’re proud to have the foremost experts on Fair Trade audit and verify the quality of our supply chain!

Chhabra: Has this claim been vetted that you are indeed the first (and the largest) home retailer to have 100% of products certified?

Nance: This claim has been vetted through an in-depth review of the World Fair Trade Organization database and verification from the World Fair Trade Organization’s team.

To be clear, the claim is specific to companies that are guaranteed members of the World Fair Trade Organization. And the important distinction here is “home retailer.” Many smaller, lifestyle retailers have achieved these standards over the past years and some of them do sell home products, like Ten Thousand Villages and Serrv International.

Chhabra: How do workers benefit from this certification?

Bentley: Artisans who work under the Fair Trade principles and process guaranteed by The World Fair Trade organization receive many benefits. From our perspective, a few of the most important:

  • Fair wages and payment. This must be mutually negotiated and agreed upon, including fair pay and wages that at minimum equal to a local living wage. The Citizenry goes one step further: on average, our partners are paid 2x the fair trade wage requirements. (Note: This differs by country, as living wages and standards differ by country, but is an average that is tracked and calculated in a database within the organization.)
  • Safe and healthy working conditions. This means a safe space, regular working hours, legally-required social benefits, and conditions that comply with established national and local laws.
  • No child labor and no forced labor. Policies must adhering to the UN Convention on the Rights of the Child and national/ local law on the employment of children. No forced labor and human trafficking.
  • Commitment to capacity building and future growth. We enter into long-term relationships with our artisan partners and work directly with them to develop skills and capabilities through improving production and business skills, gender equity and leadership, and minimizing impact to the environment

Chhabra: Were the facilities that you worked with already doing fair trade or did you have to help some of them get certified? What was that process like?

Bentley: To be clear, what is guaranteed by the World Fair Trade Organization is our internal process used to vet, onboard, and continuously work with our partners around the world. This process is then used for 100% of our products.

Many of our partners have already achieved impressive standards for certifications. Collectively, they are a part of 16 different certification programs and hold 37 individuals across these programs, which range in focus from fair labor certification practices (eg GoodWeave) to the safety and quality of materials (OekoTex) to the sustainability of materials (eg Global Recycled Standard and GOTS)

However, many of our partners were not part of any program. We worked with them to meet the standards by first identifying where there were issues of non-compliance and defining action plans to address as well as providing standardized tools they could leverage to meet requirements such as contract templates, anti-discrimination policy language, and examples of best practices in establishing quality control or rejection processes.

Gantt: We have a set of six tools that we utilize to build assessment reports for each artisan partner to ensure compliance as well as to identify opportunities for improvement. The data collected via these tools is used to generate “self-assessment reports” (WFTO terminology), which we use to monitor and track compliance. When issues are identified, we then build corrective action plans with partners.

It’s also important to note that not all artisan partners meet the full set of standards on day one, but we both agree to commit to the principles, process, and a timeline of one year to get to full compliance. We then work with them on plans to get there within a year. These growth steps are never around the most important standards like pay and clear contracts, but are typically focused on capacity building initiatives and training required to meet the full list of standards.

Chabra: For other businesses, looking to follow a similar path, what would you advise?

Nance: Ensure your model is set up with solid business fundamentals. Every business has trade-offs. With a focus on fair wages, our margins are much tighter – and that means we must be willing to make sacrifices as a team (number of resources, opex spending, etc) and be laser-focused on the impact of everything else we do to work within those margin constraints. It’s critical to architect a model that can still grow and thrive within those constraints.

Chhabra: Direct trade has been a popular term used widely in everything from artisan goods to coffee. The assumption is that growers/makers are being paid more by companies as supply chains are shrunk. Could Citizenry not just provide better remuneration to its makers through this approach — what is the added bonus of being fair trade?

Bentley: The Citizenry works directly with artisans, passing along the benefits of shorter supply chains to both our partners and customers. With the World Fair Trade Guarantee, we are adhering to a rigorous, third party audited standard that ensures the best wages and environments possible for our partners. Having the WFTO guarantee takes the burden off customers to hold companies accountable because companies like The Citizenry are holding themselves and their partners accountable.

Bringing direct trade and fair trade business practices together can be a powerful force for good.

As an example, let’s compare buying coffee from your favorite roaster and a blanket from The Citizenry.

Your favorite roaster uses a direct trade model where they source coffee from a farmer, roast it, and then resell it to you. Without adhering to fair trade practices as well, there’s no guarantee of that the farmer was paid above market rates or that the farm workers were paid fairly, without discrimination, and receive appropriate benefits.

The Citizenry works directly with an artisan producer to design and develop a handwoven blanket and then we sell it to you, all under Fair Trade principles in a verified process. That’s the ideal.

Both scenarios have the same number of parties (just 2!) in the supply chain prior to the customer. The fair trade guarantee raises the bar for transparency and equality.

Chhabra: What was the toughest challenge on this journey?

Gantt: Getting all the detailed information back from partners on each of the 62 standards to build out Self Assessment Reports for ~70 across 24 countries, as well as many partners as many external audits, during COVID was the biggest challenge.

During the audits, we had multiple setbacks due to auditors or artisan partners getting COVID (India, Ireland, Mexico) and government lockdowns (Uganda, India).

Nance:It was a long process, completed through a global pandemic, but a worthwhile step to set a new standard for accountability and transparency in the retail industry today.

.

Leave a Comment