Reading Notes Zamfirescu Marian

Greed does not have to drive business: the role of Fair Trade
Enterprises as proof of concept

Author(s): Erinch Sahan

Source: Journal of Fair Trade, Vol. 1, No. 2 (October 2019), pp. 14-23

Published by: Pluto Journals

Stable URL: https://www.scienceopen.com/hosted-document?doi=10.13169/jfairtrade.1.2.0014

The pages explores the concept of Fair Trade Enterprises and mission-led
businesses as catalysts for transforming the business ecosystem. The readings
highlight the growing interest in redefining the purpose of business beyond profit
maximization and emphasize the need for businesses to prioritize social and
environmental impact. The text discuss the emergence of BCorps as businesses that
challenge the prominence of shareholder value creation and provide examples of
Fair Trade Enterprises that align with the mission-led approach. The article also
shed light on the limitations of current initiatives in shifting corporate priorities
and propose the creation of a new business ecosystem to foster mission-led
enterprises. Additionally, it explores the challenges and potential economic impacts
of transitioning to mission-led models. The text stress the importance of
understanding and promoting the features and conditions that foster the
proliferation of mission-led enterprises, drawing inspiration from the resilience and
success of Fair Trade Enterprises.
Things to Take Away:
1. The emergence of BCorps: BCorps have gained traction globally, with over
2,000 companies in more than fifty countries adopting this business
structure. BCorps challenge the traditional emphasis on shareholder value
creation by prioritizing social goals alongside profit extraction. This
highlights the changing narrative around business purpose and the desire to
move beyond the sole pursuit of financial gains.
2. Fair Trade Enterprises as mission-led businesses: Fair Trade Enterprises
exemplify mission-led businesses that prioritize a social mission while
maintaining commercial viability. These enterprises place people and the
 planet ahead of profits and demonstrate that businesses can exist
independently of relentless profit and growth.
3. The limitations of current initiatives: Although there is a growing interest in
exploring the mission or purpose of business, many current initiatives fall
short in driving significant change. This is often due to unchanged power
structures within companies and the continued pressure to deliver maximum
profits. Merely redefining business purpose without addressing these
underlying issues may not lead to substantial transformations.
4. The need for a new business ecosystem: To support the proliferation of
mission-led enterprises, a new business ecosystem must be created. This
involves transforming financial systems, tax codes, business school
curriculums, and business regulations. By designing an ecosystem that
fosters mission-led businesses, policymakers can empower these enterprises
to prioritize their social missions.
5. Challenges of transitioning to mission-led models: Shifting towards mission-
led models poses challenges in the current economic landscape. Mainstream
businesses often have a cost advantage as they prioritize profit maximization
and avoid investments in social and environmental impact where the
business case is weak. Economies undergoing this transition may experience
short-term pain, but it is essential for long-term sustainability and equity.
6. Lessons from Fair Trade Enterprises: Fair Trade Enterprises serve as proof
of concept for identifying enterprise models that distribute power and value
more equitably. These enterprises challenge the notion that business is solely
driven by greed and emphasize the possibility of prioritizing a social mission
while remaining commercially viable. Policymakers can draw inspiration
from the persistence and success of Fair Trade Enterprises to guide the
transformation of the broader business community.
7. The importance of a transformed economic model: There is a growing
consensus that saving societies, economies, and the planet requires
transitioning away from the pursuit of maximum profit and growth. Mission-
led enterprises can play a crucial role in this transformed economic model,
where social and environmental impact are prioritized alongside financial
gains. It is imperative to reevaluate existing business structures and embrace
a new approach that supports mission-led businesses.
In conclusion, the readings highlight the need for businesses to go beyond profit
maximization and prioritize social and environmental impact. The emergence of
BCorps and the resilience of Fair Trade Enterprises demonstrate that mission-led
models are viable and necessary for transforming the business ecosystem. To drive
significant change, policymakers, academics, and campaigners must collaborate to
reshape financial systems, regulations, and business education. By fostering a new
business ecosystem that supports mission-led enterprises, it becomes possible to
create a more equitable and sustainable future.