Social accounts: Directors' summary

Headline developments

In reviewing the contents of the accounts, there a number of matters we believe are particularly worthy of comment.

• Developing World Purchases: The renewed growth in purchases from our developing world suppliers is especially welcome, and exceeded our targets for the year, despite sales growth having been a little lower than expected. In particular we can see that our product licensing strategies are beginning to generate significant additional volumes of business for our suppliers, and this is in line with the strategic priorities we set for ourselves in our long-term strategic plan.

• Producer Support activity: We welcome the recognition from our social auditors of the improved systems we have established for reviewing our relationships with producers and setting agreed objectives for their future development into more sustainable businesses. We also welcome the quality of comments from producers in these accounts, and see the directness and honesty of some of the challenges posed within those comments as an excellent indication of the depth and quality of our relationships with them.

• Fair Trader survey: The survey of this key stakeholder/supporter group has been most encouraging. It has underlined the fact that 72% of Fair Traders are 60 years old or under (and 12% are 40 or under), indicating that it is not only our long-term Fair Traders who are committed to helping to build up our work. The survey has also re-emphasised the importance of our support from the Christian community, with 94% of Fair Traders being active churchgoers.

• Development programmes: The new strategic focus of Traidcraft Exchange is becoming more evident as our project programmes continue to evolve and are beginning to attract funding on a new scale. Whilst we agree that more impact assessment measures would be highly desirable, we also note how difficult this is to achieve in a cost-effective manner for any charitable organisation. We welcome the first regional stakeholder survey that was undertaken this year in East Africa, and look forward to this approach being replicated in other parts of the world.

• Policy impact: We have been very encouraged by the continuing high regard in which the Traidcraft Policy Unit is held. Indeed, we feel the report on these activities underplays the significance and excitement of what they are achieving. In particular we would wish to make more reference to the frequent requests for advice being made to our team by trade ministers from the developing world, the continuing dialogue we have had with the Competition Commission as they have finalised their recommendations on supermarket practices, and the promising signs that our work on responsible corporate purchasing practices is beginning to influence the thinking of some major commercial players.

• Staff: We welcome the positive trends in evidence in most of the indicators in our staff section, and were particularly pleased by our work to help prisoners to re-integrate with society and employment before release. Although the Staff Survey scores show room for improvement in some areas, we think most employers would be delighted to receive the scores evidenced in the survey, and it is encouraging that on most indicators the staff responding to the survey felt we were generally improving.

• Environment: The environmental indicators in the accounts show that our organisation is responding positively to the challenges of climate change and environmental responsibility, and that whilst this has always been an important aspect of our outlook and approach, it is now becoming much more fully embedded in our culture at all levels.

Future challenges:

As we have reflected on what we can learn from the data in these accounts, there are a number of areas where we recognise opportunities for improvement. Many of these are indicated in the goals and targets set for the 2008/9 year, but some of the most significant areas to which we will pay attention are summarised as follows.

• Developing World Purchases (DWP): Maintaining growth in DWP and providing consistent orders for our producers will be difficult in the worsening economic climate. We already know that in some regions poor harvests will reduce the value of our purchases of some commodities, whilst increases in some world food commodity prices may lead to an increase in reported DWP. In future we will focus on reporting trends in our total DWP – recognising that our emphasis on growing volumes through licensing strategies makes the distinction between direct and indirect purchases less relevant.

• Engaging Churches and younger supporter groups: We will take further initiatives to raise Traidcraft’s profile with the Christian community, encouraging church members to take social action more seriously. We also recognise a need to re-think our youth-oriented strategies in the light of the new Fairtrade Schools initiative, and difficulties we have experienced in developing programmes and resources aimed at 16 to 24 year olds. We will seek to address this during our annual planning cycle.

• Sustaining the growth of Traidcraft Exchange programmes: We must build on the encouraging momentum in our six strategic programmes, and pay particular attention to growing these programmes within our East Africa and South East Asia regions and in Bangladesh – replicating the excellent growth in the scale of our work in India. Continued growth will also require more financial support from individual donors, and we will investigate ways of recruiting more supporters from the plc’s customer base and from churches, and, noting the large number of people who give just once to Traidcraft Exchange, we will explore how we can encourage more donors to give regularly to our charitable activities.

• Increasing impact on beneficiaries: We have allocated additional funding to support the development of improved impact indicators and more analytical evaluation of projects to maximise our learning. We will also seek to raise additional funding for more producer support activity for the plc’s fair trade suppliers, and will follow through the auditors’ comments on the need to gather more data about the impact of fair trade on FLO-registered food producers, especially those with whom we deal indirectly through Cafédirect, Divine and our European partner organisations.

• Corporate engagement: In a number of areas covered in these accounts, we perceive there to be major opportunities to increase the range and depth of our engagement with the corporate sector. These include the extension of licensing activities to new partners, the promotion of social accounting and responsible purchasing practices, and opportunities to carry out consultancy and training work with private sector companies through the Traidcraft Market Access Centre.

• Environment: Much of our attention in recent years has been given to reducing the negative environmental impacts of our directly controlled activities. As we look to the future, we will seek to find ways of helping our plc suppliers and Traidcraft Exchange project beneficiaries to respond to the challenges of climate change.

• Benchmarking: Whilst it is often difficult to find relevant external benchmarks for our pioneering activities, we recognise that we should explore more thoroughly what further data might be available to allow readers of the social accounts to assess our relative performance and impact.

Whilst we cannot expect to complete all the above initiatives in a single year, we hope to be able to show good progress in implementing them over the coming twelve months, making us more effective in our mission of fighting poverty through trade.

Paul Chandler
Chief Executive