Assurance statement

Scope and objectives

Traidcraft^[1] commissioned justassurance^[2] to undertake independent assurance of its 2008/09 Social Accounts. justassurance was paid £16,800 for this work. justassurance has no other relationships with Traidcraft that might compromise its independence.

The assurance process was conducted in accordance with AA1000AS (2008). We were engaged to provide Type 2 moderate^[3] assurance, covering:

• evaluation of adherence to the AA1000APS (2008) principles of inclusivity, materiality and responsiveness (the Principles)
• the reliability of key performance claims.

We were engaged to provide high level assurance on Developing World Purchases performance information.

We used the Global Reporting Initiative (GRI) Quality of Information Principles as Criteria for evaluating performance information and relied on audited financial information.

Responsibilities of the directors of Traidcraft and of the assurance providers

The directors of Traidcraft have sole responsibility for the preparation of the Report. Our statement represents our independent opinion and is intended to inform all of Traidcraft stakeholders including management. We adopt a balanced approach towards all Traidcraft stakeholders.

We were not involved in the preparation of any part of the Report. We have no other contract with Traidcraft and this is the fourth year that we have provided assurance.

Our team comprised Mark Line, Adrian Henriques and Sini Forssell. Further information, including individual competencies relating to the team can be found at: www.justassurance.org

Basis of our opinion

Our work was designed to gather evidence with the objective of providing assurance as defined in AA1000AS (2008).

To prepare this statement, we reviewed the scope of the Social Accounts, assessed areas of risk, interviewed managers, scrutinised the Social Accounts, the underlying data and documents and considered the efficacy of the management systems. We provided some feedback to Traidcraft on aspects of drafts of the Social Accounts and where necessary, changes were made.

We are satisfied that we have been allowed unhindered access to the financial accounts, documentation and reports covering its activities and stakeholder engagements and to managers and staff.

Findings

On the basis of the work undertaken, nothing came to our attention to suggest that the Report does not properly describe Traidcraft’s adherence to the Principles or its performance. The description of Developing World Purchases performance is fairly stated.

Overall, Traidcraft’s Social Accounts provide an exemplary level of transparency and disclosure.

Observations

Without affecting our assurance opinion we also provide the following observations.

Inclusivity concerns the participation of stakeholders in developing and achieving an accountable and strategic response to sustainability.

Traidcraft’s activities are directed by its Foundation Principles; these ensure a fundamental stakeholder orientation. Traidcraft has been developing additional means to assess and work with its suppliers. It is leading the Fair Trade movement in this respect. However for financial reasons, this year there has been less engagement with producer groups than planned. Nevertheless formal engagement exercises with staff and with customers have taken place.

Material issues are those which are necessary for stakeholders to make informed judgments concerning Traidcraft and its impacts.

The Foundation Principles also encourage a focus on material issues for Traidcraft’s stakeholders. However the social accounts could better articulate why the specific issues reported on are considered material.

The social accounts could say proportionately more about its wholesale food trading activities, large producers and purchases for licensed products, since these represent a large and growing dimension of Traidcraft plc’s activities. Future reports should also cover the Regional Offices throughout the world.

Reporting on the environment has not advanced in the past year. This may also be partly due to financial constraints. However there were opportunities to report projects in which producer-related environmental impacts had been considered. It may be appropriate to review the overall management of environmental issues within Traidcraft as a whole.

One central area which could be explored further in future reports is the complexity of issues with which Traidcraft deals in determining what is appropriate for a particular producer. This can encompass labour conditions, health and safety and the level of wages actually paid.

This year has seen more extensive reporting on Traidcraft Exchange’s policy and project work and on the involvement of Traidcraft in the Fair Trade movement in general. This is a welcome development as it gives a more balanced account of Traidcraft’s impact.

Responsiveness concerns the extent to which an organisation responds to stakeholder issues

Traidcraft not only assesses its suppliers’ labour practices but almost uniquely also asks its suppliers to feedback systematically on its performance in relation to them. It has also responded to the principal issues raised by them.

Traidcraft’s social accounts are particularly extensive. While there is in this respect a high degree of transparency, it would be helpful to stakeholders to be able to locate the information relevant to them more easily and to have an overview of the organisation’s impacts.

Performance Information

In terms of data accuracy, nothing came to our attention to suggest that the performance information had not been properly collated from information reported at operational level, nor that the assumptions utilised were inappropriate. We are not aware of any errors that would materially affect the Group data.

In a number of areas we recommended that protocols be developed to ensure that performance information can be calculated reliably and systematically, which would help to reduce errors. This is particularly important for Developing World Purchases as this indicator captures the scale of the impact of Traidcraft plc’s own trading activity. However it does not capture the full extent of Traidcraft’s impact and influence. Further work should be done to develop appropriate indicators; this could encompass making clear that one of Traidcraft’s impacts is to have created markets for new product areas.

The reporting of Traidcraft Exchange’s development projects presents particular challenges as their impacts, including environmental ones, cannot easily be quantified, may be partly attributed to other sources and can take years to materialise. We believe Traidcraft has been honest in reflecting the actual range of outcomes.

Just Assurance Network Ltd London, July 7th 2009