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Is B Corps Or Fair Trade Certification Right For Your Company?

The president of an Africa-based footwear company on why he shelled out for top certifications, and whether you should, too.

Tal Dehtiar is in the business of social good.

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He founded and runs the world’s first and only fair trade-certified footwear factory, Oliberté, which is also a certified B Corporation and a member of 1% For The Planet.

Since he started the company in 2009, Oliberté has gone from about 20 employees to 120, and from 225 pairs made annually to nearly 45,000 in 2015. The company built its own factory in 2012 in Akaky Kaliti–an industrial suburb in Addis Ababa, Ethiopia–and has raised $5 million to date. Dehtiar says he’s likely double the number of employees in the coming year, as the company has grown about 70% year over year in revenue. And while its biggest sales driver is its direct-to-consumer business, Oliberté sells in 100 retailers like REI and The Tannery and will begin sales in Australian Patagonia stores next year.

The company also recently launched a campaign on Kickstarter–which recently became a public benefit corp–to raise money for a new kids’ line, Olibaby.

Oliberté founder and president Tal Dehtiar

But that growth wasn’t easy. Oliberté operates in the competitive footwear market in a challenging part of the globe: Ethiopia’s gross national income per person is about $550, compared with $55,200 in the U.S. Plus, benefit corporation status comes with fees, as does Fair Trade USA’s stamp of approval: Dehtiar had to fork over audit and yearly fees since Oliberté’s factory became fair-trade certified in the fall of 2013.

Here’s how he decided to take the plunge and make worker welfare his number one priority:

Why Build A Social Good Business?

“Sometimes I wish we didn’t, frankly,” Dehtiar tells Fast Company. He’s mostly kidding, but committing to social good is, well, work. In addition to the fees Oliberté pays to remain B-Corp and fair-trade certified, the company must set aside 6% of the cost of every shoe that goes into a protected, employee-controlled fund on top of worker salaries. And each pair of shoes is made carefully (read: slowly).

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“The way we make our shoes takes time. Maybe in Italy (shoemakers) have been making shoes for generations–but some of our workers have only been working for three months,” he says. “Because we take our time, we’re able to be really considerate for the products and the people that make it.”

For Dehtiar, “social good” doesn’t mean a tacked-on initiative at the end of a process. It’s important to how the brand was conceived: to create jobs in Africa, deliver a quality product, and be transparent with consumers. As such, Oliberté doesn’t do anything that would fall under “social good” just for the sake of doing it. Unlike TOMS, known for its One-for-One program where it gives away a pair of shoes to a needy child for each one purchased, Oliberté doesn’t “donate” at all.

“There’s nothing wrong with it. It’s just not our mandate,” Dehtiar says.

Oliberté built its own factory in 2012 in Akaky Kaliti, an industrial suburb in Addis Ababa, Ethiopia. The company has raised $5 million to date.

Instead, Oliberté focuses on things that make sense for the company. In a recent partnership with the African Wildlife Foundation, for example, the company allowed rangers to customize boots sturdy enough for traversing rough terrain. Previously, the rangers were limited in forest protection because of poor footwear.

“Sometimes that’s what becomes challenging for a business, because they want to do so much good, and sometimes it’s really easy to put a Band-Aid on something,” Dehtiar says about choosing causes. “At the end of the day, we’re not a charity. We’re a profit business that has to say we think about those things regularly, and when the time allows us, we act on them.”

How To Know If Fair Trade Is Right For You

Dehtiar has a checklist for business owners looking to go for the gold in the social good category.

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First, does it make sense for your stakeholders? Audit fees, annual fees, plus the fair trade-mandated percentage that goes back to workers add up. If your company can’t brook those expenses, you may be doing more harm than good by taking the leap prematurely. Because social good is so central to Oliberté, Dehtiar says his investors are patient and motivated in the company’s fair-trade efforts.

Next, ask if you can engage your entire company in making fair trade a priority. Fledgling businesses have an advantage here, as it’s easier to make social good of any kind part of an organization’s DNA early on.

Six years ago, Oliberté had about 15 factory employees. Now it has 120.

Third: If a B Corp or fair trade audit requires you to make major changes in our organization, would you be willing and able to make them? Dehtiar says the answer for many is no. Companies must be prepared for some level of flux when deciding to pursue social good certifications, and hesitation to comply completely could be a sign it’s not the right fit.

And finally, Dehtiar suggests having a clear end goal. What value would a certification add to your business? There must be a value add, he says, even if it’s just marketing cachet.

“There’s no doubt it’s fantastic marketing, because consumers demand this from more and more brands. But more importantly, it’s the right way to do business,” Dehtiar says. “It’s making the best products that you can, continuing to improve, and at the same time, taking care of the people at all levels that are part of your company, from supply chain to the factories to the farmers to our investors, and of course, ultimately our customers.”

When It’s Worth It

Oliberté uses Fair Trade USA as its certification organization, but Dehtiar recognizes its stringent standards–including onsite audits and 250 policies and procedure checks–are not for everyone. He says finding the right partner and level of certification is important. But no matter what level of social good commitment you pursue, he says the payoffs can be great if you’re in it for the right reasons.

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“For us, if you really believe this matters to you, and you want to be true to your customers, and your workers, and your product, then go all the way, whatever that reasoning is,” Dehtiar says. “When we wanted to establish who we were as a company, we knew from the beginning we weren’t maximizing profits, but we were about being responsible to our world. But we had to say there’s certain elements that we’re not going to be good at.”

Its first year in business, Oliberté produced about 225 pairs of shoes. This year, it produced nearly 45,000.

Because the country is landlocked (and pirates are problematic off many of Africa’s coasts), Oliberté flies all of its product out of Ethiopia to its customers, most of whom are in the U.S. But while exporting out of Ethiopia is duty free, all that shipping is a tax on the environment. Dehtiar says the company made a choice early on: Fair wages and employee welfare would be the company’s first priority, even if at the expense of the environment.

“In order to stay in business so that the bigger we grow we can have amazing impact across Africa environmentally as well as North America, then there’s certain sacrifices I have to make,” Dehtiar says. “The bigger we get, the better we’ll get in terms of quality and other things we want to improve.”

The silver lining, Dehtiar says, is that the check-ins that come with being B Corp and fair-trade certified mean that his team gets a regular rundown of what they’re doing right and where they can improve.

“I do hope there will be more shoe factories one day that will be fair-trade certified, but I know it has to do with the fact that the way they make their money and the margins is in labor,” he says. “If we can make it in Ethiopia, under all these challenges, and if we can make shoes in a culture that hasn’t really made shoes of the highest quality, there’s no reason anybody can’t do anything.”