A new Fairtrade Foundation initiative devised to help food supply chains collaborate in the interests of sustainability is “unlikely to raise competition concerns”, according to UK business regulator the Competition & Markets Authority (CMA).
Fairtrade Foundation’s ‘Shared Impact’ programme aims to help businesses drive real and lasting change within their supply chains and meet their sustainability goals, by bringing retailers together to pool their new Fairtrade sourcing commitments to a targeted group of farming cooperatives.
The foundation submitted the new scheme for assessment to the CMA under its ‘Green Agreements Guidance’ open-door policy, which aims to help organisations understand how they can collaborate on environmental goals without falling foul of competition law.
Alexander Carnwath, head of public affairs at the Fairtrade Foundation, commented: “Shared Impact is the first of its kind to go through the new open-door policy, demonstrating that Fairtrade is leading the way when it comes to improving sustainability in food supply chains at a time when the climate crisis demands credible and collaborative solutions.
“Farming remains one of the main drivers of deforestation globally, as well as a significant contributor to an increase in global greenhouse gas emissions and biodiversity loss. Farmers and workers cannot drive forward sustainability initiatives without supply chain collaboration.”
Carnwath described Shared Impact as “a joint pledge between farmers, retailers and Fairtrade”, adding: “Expanding on the existing way we work with our retail partners, the new model allows them to target salient risks in their supply chain, drive forward a more resilient food sector, work together to advance shared goals, and fund real, lasting change in partnership with farmers and workers.”
According to the foundation, Shared Impact will enable UK grocery retailers operating at the same level in supply chains to take collective action on enhancing sustainability and resilience in supply chains – in partnership with Fairtrade farmers at the sharp end of the climate crisis and a challenging global economic context.
Farmers in low-income countries are subject to frequent changes to sourcing agreements for small proportions of their products, but as part of an initial one-year Shared Impact pilot participating UK retailers sourced additional Fairtrade banana, coffee and cocoa volumes from certified producer groups on top of their existing Fairtrade sourcing commitments.
Fairtrade Foundation said those signing up to the initiative will be given the means to report on key impact outcomes, measure progress on sustainability commitments, and share the responsibility of supply chain risk management. For farmers and workers, it will mean longer-term sourcing commitments, closer relationships with retailers, and greater opportunities to sell more of their produce on Fairtrade terms.
In its informal guidance, the CMA explains how competition law applies to UK grocery retailers who participate in Shared Impact. The regulator considers the initiative to be an ‘environmental sustainability agreement’, which is defined as an agreement between competing businesses that involve co-operation to achieve green outcomes, such as tackling climate change.
Fairtrade Foundation’s submission to the CMA was made possible with support of global law firm Freshfields Bruckhaus Deringer, which offered its expertise to the Fairtrade Foundation on a pro-bono basis.
[Image credit: Green Retail World]
