IDH – The Sustainable Trade Initiative and Fairtrade sign global partnership for fair economic conditions

Based on the belief that people should be at the heart of trade, it is clear our economic models need to be reconstructed to achieve decent livelihoods for those workers and farmers. However, when it comes to achieving transformation in our trade systems, it is often easier to find failings than to recognize solutions.

In recent years both IDH and Fairtrade have been advocating on the need for a living income and a living wage. Both organizations have taken actions to close living wage and income gaps, supporting research, quantifying base wages and living income reference prices, developing measurement tools, developing roadmaps and setting agendas. Experience has shown both organizations that there is no simple answer, nor a single silver bullet solution to achieve living wages and a living income in a sustainable way in global supply chains. What’s more, we firmly believe that cooperation is key to driving change at scale.

By joining forces strategically, IDH and Fairtrade intend to leverage each other's knowledge and networks, exchange experiences and co-create solutions, working with both producers and buyers on the necessary messaging, tools, data, methods, and examples needed for closing living wage and income gaps in an inclusive and sustainable way.

“Fairtrade is an important partner in ensuring the steps we take with businesses to close the living wage or income gap is done hand in hand with producers, as well as providing producers and supply chain actors robust data validation”, says Daan Wensing, CEO at IDH. “The organization has in recent years affirmed its position with its model for fair economic terms of trade to forge progress towards a living income and living wage in particular. Together with Fairtrade, we hope to further create global leverage and take a next step towards accelerating business practices that will contribute to achieving living wages and income in agri-food supply chains.”

A concrete step in IDH and Fairtrade’s journey of closer collaboration is Fairtrade’s recent decision to start working with the Salary Matrix introduced by IDH as a tool to measure wages. The practical tool is part of the IDH Roadmap on Living Wage which strengthens international alignment and builds tangible solutions regarding living wages. Fairtrade and IDH have agreed to focus on developing unique Fairtrade add-ons to the Salary Matrix, including but not limited to data governance and ensuring that the partnership drives more benefits to farmers and workers. Fairtrade and IDH will be working through the details of what this means for Fairtrade stakeholders and supply chain actors in the coming months.

"IDH has a strong track record in convening business stakeholders to support projects with producers, harness the learnings and monitor sector-wide progress towards living incomes and wages,” explains Melissa Duncan, Executive Director of Fairtrade International.

“Through the IDH Salary Matrix tool, Fairtrade aims to create more uniformity in measuring wages. It will enable us to demonstrate some of Fairtrade’s unique features in an online tool being used by many of our retail clients. It also ensures that producers will not face the administrative burden of filling in different tools with similar goals,” she adds.

Within the global partnership, Fairtrade and IDH will together identify additional priority actions towards fair economic conditions in five key areas: co-creation, learning, advocacy, communication, and fundraising. Stay tuned for further updates on each of these areas in the coming months.