Fairfactia - ethical trade solutions

Fairfactia - ethical trade solutions: Full-Scale Solutions to Textile Retailers from Indian Factories - Ethically.

Munich, GermanyIndia
Year Founded:
2015
Organization type: 
hybrid
Project Stage:
Start-Up
Budget: 
$50,000 - $100,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Fairfactia is a full service partner for European textile retailers. We plan and manage every stage of the sourcing & production process working only with Indian factories that meet our ethical trade standards and creating go-beyond, participatory CSR programs to promote a truly ethical brand.

WHAT IF - Inspiration: Write one sentence that describes a way that your project dares to ask, "WHAT IF?"

What if there was a way to ensure ethical textile factory conditions and still make a profit?
About Project

Problem: What problem is this project trying to address?

Although many brands have set up codes of conduct & audits to ensure compliance with basic labour standards, the ground floor reality has not changed for the better. Despite good intentions, retailers frequently find themselves under-or mis-informed around how to implement & maintain social measures while balancing business targets in culturally contrasting environments. This gap results in ongoing miserable working conditions in factories.

Solution: What is the proposed solution? Please be specific!

Fairfactia bridges ethical with trade. We accompany the retailer through sourcing and business processes & remain a hands-on partner manager as well as exporter throughout the entire production cycle. At the same time, we conduct independent audits, verify certification & create innovative CSR programs based on the wishes of the workers via our partner non-profit, United for Hope. Our in-house team in India of production & CSR managers work with local insight & solutions to ensure quality and deadline agreements are met as well as close audit gaps & execute participatory CSR programs - working together with factory management & factory floor workers to create an authentic partnership & work towards the creation of model factories.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

Our pilot customer is a stock market registered European baby & children's wear retailer. They wanted to start producing their own brand but as resellers were not knowledgeable about how to source & manufacture ethically & profitably. We researched & sourced a factory, conducted all negotiations, checked compliance, did an independent audit & built relationships to management & workers to understand the needs from both sides. Through partnership & onsite presence, we jointly created an ethical brand which will launch Dec. '15. Through production & beyond, we have executed CSR programs based on the wishes of the workers & provided marketing material to the retailer to promote their ethical brand. Ethics plus profit can be done in parallel.

Impact: What is the impact of the work to date? Also describe the projected future impact for the coming years.

To date we've engaged 1 factory with 100 workers and are in negotiation with 2 further factories (200 & 100 workers) for follow up orders as well as negotiating services with a 2nd customer in the Middle East. We've supervised the creation of an ethical brand with healthy profit margins for both sides -as well as ourselves. We have rolled out CSR programs which have transformed the lives of the workers (nutrition, education, women's empowerment & bonus programs as well as the building of a classroom & garden area). We have proved that ethical can still be profitable Our hybrid social enterprise combines sound business sense, cross cultural competency & real knowledge of social programs that work via our non-profit arm. We've shown that onsite, local presence & the intention to form mutually beneficial business partnerships can and do work if managed by a fully involved trading partner.

Spread Strategies: Moving forward, what are the main strategies for scaling impact?

Fairfactia wishes to spread confidence that ethics & profit can coexist. We wish to give retailers the confidence that they can lean on us for a sound business deal AND trustworthy partnership around working conditions, certifications, suppliers & day-to-day operations. We wish to combine global with local for a win-win situation for all. After the pilot launch, we will acquire new customers and offer them the opportunity to work towards a truly ethical brand without fearing their bottom line. We aim to create model factories all over India as well as change the reputation of an industry.
Sustainability

Financial Sustainability Plan: What is this solution’s plan to ensure financial sustainability?

We have been lucky to attract a first major customer with an order that covers moderate expenses & living costs. Further orders are in the pipeline & we are confident of new customers & revenue streams. We believe that increased orders together with awards/grants will fund growth & scalability. Finally, our dream is not to grow personally rich through this social business but to use the money to fund our non-profit, United for Hope.

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

Fairwear (Amsterdam) have the mission to improve labour conditions in the garment industry. They do CSR consulting for mid size retailers as well as social audits in factories worldwide inc. India. They outsource the Indian auditing work to an Indian CSR consulting agency specialising in labour practices. Although there is a wide overlap with Fairwear, they are unable to help retailers to source matching factories, negotiate business processes or establish long term relationships with factory employees through programs which are executed by field staff. In my opinion we are in a greenfield.
Team

Founding Story

Tara quit her mid-management level corporate job (Microsoft, Fujitsu, Deutsche Telekom) to set up the non-profit, United for Hope in 2013. UfH works towards creating sustainable, replicable model villages in rural India (currently U.P.). Looking for a revenue stream to support herself & her growing non-profit, she partnered with some friends in retail mid 2015 to develop the idea of ethical trade for an ethical brand. What followed was an intensive immersion in a new industry, utilising her existing corporate skills combined with her in depth knowledge of India's social issues to form a new vision for ethical trade. She is joined on the board by her Indian lawyer husband, Vikas.

Team

Tara runs European operations out of Munich and Vikas runs Indian operations out of Delhi. They are joined by Kuldeep, a textile industry expert and ex-factory owner with more than 20 years experience and a pragmatic, get-it-done attitude. We have two in-factory staff (funded by a customer), Chandan & Seema. Chandan is a senior quality checker who works closely with his factory counterparts to ensure quality and promptness. Seema is our CSR manager, who executes CSR programs, tackles audit gaps and acts as an in-house social worker. We have a contracted accountant on a needs basis. As we grow in the next year, we will require, European Customer Managers and more in-factory staff as well as an admin & marketing assistant.
Value Chain: Where does your work fit into the apparel value chain? [check all that apply]

Raw Materials, Manufacturing, Consumption.

Your Role: What is your relationship to the apparel industry? [check all that apply]

Advocate/Organizer, Auditor, 5Factory Worker, Non-profit Staff, Sourcing Manager / Supply Chain Manager, Supplier - subcontractor, Trading Company Representative.

Target Population: What stakeholder groups do you engage or empower in your work? [check all that apply]

Brands, Factory Workers, Factory Owners, Retailers - Department Store, Retailers - Mass-merchandise Chain, Retailers - Discount Chain, Sourcing Manager / Supply Chain Manager, Supplier - contractor, Women.

● Intervention Focus: What are you trying to achieve / influence? [check all that apply]

Access to Essential Services (i.e. Healthcare and Education), Access to Social Protection Services (i.e. Insurance, Pension, etc.), Accountability, Conscious Consumerism, Environmentally Sustainable Practices, Labor Rights (i.e. Collective Bargaining, etc.), Gender Equality, Anti-forced Labor or Anti-Human Trafficking, Physical Working Conditions, Transparency.

Lever for Change: Select up to 3 ways your work is helping to transform the industry.

Enforcement, Standards.

Is your project targeted at solving any of the following key barriers?

Hidden from View: Conditions in Forests, Farms, and Factories are Only Visible to a Select Few, A Job is Not Enough: Low-Income Workers Cannot Secure Long-Term Well-Being, Sustainability is Not Yet in the DNA: Fast Fashion’s Current Model Disincentivizes Value-Driven Economies.

Does your project utilize any of the innovative design principles below?

Activate Local Know-how for Driving Solutions: Build Opportunities for Workers to Become Leaders, Disrupt Business as Usual: Target Key Players Who Can Influence the Bottom Line.

Innovation Inspiration: When you first conceived of your project, did you think of it as applicable to the apparel industry?

yes

If you answered "no" to the previous question, which industry was your project originally aimed at transforming?

● Replicating in the Apparel Industry: If your project didn't initially target the apparel industry, how are you specifically tailoring it to do so now?
Are you nurturing or inspiring others to be changemakers? If so, how?

From corporate to Indian villages to factory floor. My story has appeal & I often speak publically to inspire courage in others

● Tell us about the partnerships that enhance your approach. How have you collaborated with others in the industry to increase your impact?

Just 6 months old but already connected to SC experts & other social enterprises through Impact Hub Munich where we are based.

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