Fairtrade Money

Money, Money, Money - I’ve found a way that we can even make our money Fair Trade!

The Dutch weave fairtrade cotton into their 10 Euro notes for strength and quality.

Luckily, there are ways to make our money in the UK Fair Trade without having to pay with everything with Dutch Euros! We can invest our money in bank accounts, share accounts, shares and ISAs which benefit Fair Trade companies and organisations.

Bank Accounts

Triodos run a Fairtrade Saver Account. The money invested in these accounts is invested in Fair Trade businesses like Cafedirect, Gossypium, Equal Exchange, World of Difference and Zaytoun. Also, Triodos will donate 0.25% of the average balance to the Fairtrade Foundation and you can also choose to top-up that donation with a proportion of the interest that you earn on the account as well.

In 2006, the Fairtrade Foundation received £27,000 from these accounts and Triodos had £2.4million available to invest in Fair Trade companies.

Share Accounts

Another option is to put money into a Share Account with the Shared Interest Society (a member of IFAT) which makes the money available to lend to Fair Trade businesses all over the world. These loans allow buyers to pay producers in advance and for producers to be able to gain credit without having to resort to loan sharks.

This account does pay interest and allows withdrawals to be made, but is very different to a bank account. Interest is paid on the account yearly, at a rate that is always below the market rate and maybe zero (depending on the UK base rate, the number of bad debts and the performance of the Society overall). According the Society, on 4th April 2008, the interest rate was 1.25%. The Society is not a bank, but a co-operative lending society and so your money is at risk as the value of the investment in the account can go down.

Fair Trade Shares

Some Fair Trade companies have made share issues - Traidcraft and Cafedirect shares are available. These shares are not listed on an exchange, but instead are bought and sold through matched exchange systems in which buyers and sellers are put into contact.

Investing in these shares is not about short-term profit-making; the prices of these shares are likely to remain stable. As James Bland, Chief Executive of the Social Enterprise Coalition explains ’While investors can make money from investing in social enterprise, it is not the same as buying shares in a company listed on the stock market. For a start, the share price will often be determined by the company, rather than the stock market - as is the case for Cafedirect… That is perhaps inevitable given the lack of an active market for the shares, but it does mean that share prices tend to go nowhere.’ Also, dividends are not always paid each year - as the focus is on ensuring that the producers and growers benefit - rather than shareholders.

Instead, the aim of investing in these shares is to be a partner with the company by providing funds to allow them to grow and extend their business and also to participate in the decision-making and direction-setting of the company at their Annual General Meetings.

ISAs

Cash ISAs

Fair Trade Cash ISAs don’t exist as such. However, the Co-operative Bank strictly avoids investing in companies with poor human rights records and is part of the Co-operative Group whose supermarket chain have more Fairtrade products than anyone else. The Co-operative Bank’s has a cash ISA, and also Smile, their Internet bank arm, has a cash ISA. The Co-operative Bank and Smile ethical policy is to only invest in companies that have a responsible approach to fair trade and labour rights.

Triodos have an ethical cash ISA and they only invest their customers’ money in ethical companies (including Fair Trade, as listed above).

Stocks and Shares ISAs

Also, Fair Trade Stocks and Shares ISAs don’t exist - but the Co-operative Bank have the CIS Sustainable Leaders Trust which ethically screens the companies it invests in.

Please note: the value of shares and other financials investments may go down as well as up! I’m not a Financial Adviser and am unable to provide any guidance as to the current or future performance of any of the financial products that I have mentioned here.

(Acknowledgements - Thanks to Harriet Lamb’s book and a recent Metro article for pointing me in the right direction. Also, thanks to austinevan for the photo.)