Scaling a sustainable supply chain : a comparative case study of Tony's Chocolonely, Moyee and Fairphone

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Scaling a sustainable supply chain

A comparative case study of Tony’s Chocolonely, Moyee and Fairphone

By Erna Goudt

University of Amsterdam, Graduate School of Social Sciences MSc Political Science; International Relations

Under the supervision of: Dr. Luc Fransen Date: 30 June 2017

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1. Introduction

Production of goods is dispersed over the globe (Seuring & Müller, 2008). To produce a simple product like a pencil, multiple components are needed. Wood, lead and rubber to just name a few. To cut down a three a saw is needed. But to produce a saw a whole range of other components are necessary, in short: nobody is able to produce a pencil on his own. Milton Friedman uses the example of a pencil to demonstrate how the free market can promote harmony. Friedman views Corporate Social Responsibility (CSR) as the responsibility of businesses to increase their profits (Wirl, 2012). This view is dominant in the developing world and in emerging markets. However, in the Western world business are pressured into incorporating CSR in the form of all three pillars of sustainability (society, environment and economy) in their core business activities.

Next to conventional businesses incorporating CSR practices a new type of enterprise has emerged, the social enterprise. The social enterprise aims to include sustainability in its day to day practices. They distinguish themselves from conventional businesses by following a social mission first, instead of focussing on maximizing profits. Similar to non-profit organizations like NGOs, the raison d’être for social enterprises is tackling a societal problem. However, in contrary to non-profits, social enterprises believe in having a revenue model. Where NGOs rely on charitable donations, grants and public funding, a social enterprise aims to be financially sustainable just like any other, more conventional, business. A steady stream of income is necessary to reach the social targets of the social enterprise. Although public and academic interest in social enterprises is growing internationally, a shared definition is still lacking. McKinsey & Company (2011) define the social enterprise as: ‘’a company with the primary goal to deliver social value in a financially sustainable and independent way.’’ (McKinsey & Company, 2011, p. 3).

In 2012 the Dutch platform Social Enterprise NL was set up by Willemijn Verloop and Mark Hillen. This platform represents the Dutch social enterprise sector. The goal of the platform is strengthening the sector and by doing so increasing the social value of these companies. According to the Social Enterprise Monitor 2016, a study carried out by Social Enterprise NL, employment in the sector increased with 24 per cent between January 2014 and January 2016. This growth corresponds with previous years during which the sector also grew strongly. The social enterprise sector in the Netherlands, shows an above average growth in both employment and sales, compared to (conventional) small and medium sized enterprise (Social Enterprise Monitor, 2016).

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6 Although the amount of social enterprises is estimated to be between 5,000 and 6,000, the number of mature enterprises is quite low. Enterprises that have been set up after January 2014 are considered to be start-ups, enterprises that have been in business for over two years and have an annual turnover of less than one million are considered to be scale-ups and enterprises with an annual turnover of over one million are considered to be mature business (Social Enterprise Monitor, 2016). Following these definitions, 20 per cent of the Dutch social enterprises are start-ups, 65 per cent are scale-ups and just 15 per cent of the enterprises can be considered mature businesses.

With only 15 per cent of the social enterprises being mature businesses, we should ask ourselves why this is the case. What prevents social enterprises from becoming mature businesses? And more so what are the threats that come with becoming a mature and thus larger business. Are social enterprises able to maintain their social standard in their development from start-up to mature business? Or will they have to compromise on their standards to reach scale? In short, is there a trade-off between reaching scale and sustainability goals?

In this research, I will focus on Dutch social enterprises and specifically on product creating enterprises, with an international supply chain. Traditional companies are more and more being held responsible for the environmental and social impact along their supply chain. Given the fact that social enterprises are mission-driven enterprises, the supply chain of these type of product creating companies have sustainability in their DNA. Unlike their traditional counterparts, the challenge is not in creating a sustainable supply chain, but in scaling a sustainable supply chain. Therefore, the main research question that will be answered in this thesis is: ‘’Can social enterprises create a scalable supply chain

while maintaining sustainable businesses?’’

The first chapter of this research will provide a theoretical framework, which will be necessary to answer the main research question. The concepts of the social enterprise, the sustainable supply chain and sustainability will all be discussed. Relevant theories will be discussed as well as the theoretical findings of this research. The second chapter will provide an overview of the methodology that has been used in this research. The case selection, the method of analysis and the data collection will be discussed in this chapter, as well as the theoretical and societal relevance of this research. The third chapter will demonstrate the empirical findings. Finally, the conclusion will provide the answer to the main research question and give recommendations for future research.

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2. Theoretical framework

In this chapter I will explore several bodies of theory, that are necessary to be able to answer the main research question: Can social enterprises create a scalable supply chain while maintaining

sustainable businesses? As this chapter will show there are several gaps within existing literature

which the main question in this research will try to fill. The approach taken in this research is inductive, which allows for a going back and forth between existing literature and empirical findings.

The following sub-questions have been formulated to structure this research: 1. What is the role of the social enterprise in society?

2. What is the role of partners in scaling the supply chain?

3. Does the traceability model influence the scaling chances of the supply chain? 4. Is there a trade-off between scale and sustainability?

The theoretical framework will be divided into four sections: the social enterprise, the sustainable supply chain, traceability of resources and trade-offs between the dimensions of sustainability. Each section will provide the theoretical groundwork to answer one of the sub-questions.

2.1 The social enterprise

Although the existence of organizations that address social problems and aim to create social value is not a new phenomenon, the term social entrepreneurship is (Dacin, 2011). Especially in the Netherlands the social enterprise sector is still in its infancy. The Dutch social enterprise sector is a lot smaller compared to the sectors in the United States and the United Kingdom, where the trend of social entrepreneurship started earlier and developed a lot stronger. As mentioned in the introduction the social enterprise sector in the Netherlands consists of approximately 5,000 to 6,000 enterprises. However, there is an unfulfilled potential to double the amount of Dutch social enterprises to a total of 10,000 over a period of just ten years. Moreover, the average size of Dutch social enterprises is relatively small. The ten biggest social enterprises in the United Kingdom are combined 5.5 times larger than the ten biggest Dutch social enterprises. The Dutch top ten includes enterprises like Greenchoice, provider of renewable energy and Greenwheels, a car sharing company. In short, there is still a lot of untapped potential when it comes to the Dutch social enterprise sector, both in terms of the amount of enterprises that exist as well as in the size of the enterprises that currently do exist (McKinsey & Company, 2011).

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8 Measuring the success of the social enterprise

Bagnoli & Megali (2011) discuss the importance of management control systems to measure the performance of an organization. Measuring instruments in management control systems are predominantly quantitative in nature and more specifically, monetary in nature. However, in the case of measuring the performance of a social enterprise, multiple profiles should be taken in to account. Since the social enterprises is a mission-based organization, the social performance of the enterprise is at least as important as the financial performance. Using the management control system of Bagnoli & Megali (2011) the success of a social enterprise should be measured from three different points of view. These are, the economic and financial performance, the social effectiveness and the institutional legitimacy of the enterprise.

Even though social enterprises are mission-driven organizations and do not focus on maximization of profits, being able to measure economic and financial performance remains very important (Bagnoli & Megali, 2011). The indicators used by Bagnoli & Megali to measure financial performance are profitability and efficiency of the enterprise. Without a sound financial model, there is no enterprise and thus no possibility of achieving the social mission. The creation of social value is related to economic outcomes, since economic outcomes result in financial resources which the social enterprise can use to achieve the social mission (Dacin, 2011). Too many social enterprises fail because they solely focus on the social dimension of the enterprise and lack the entrepreneurial skills of running a business with sound financials (D’Heur, 2015).

The social effectiveness of the social enterprise can be measured in sustainable procurement of resources, the reach of the enterprise and the effect on the wellbeing of beneficiaries. The measuring instrument of social effectiveness should include inputs, outputs, outcomes and impact. Inputs refer to the resources that are needed to undertake the core activities of the social enterprise. In the case of product creating companies, the inputs are resources such as cocoa beans to produce chocolate or minerals to produce cell phones. Outputs refer to activities that have been realized to achieve the mission of the social enterprise. In the case of a chocolate producing company, the outputs are producing the chocolate bar with sustainably sourced cocoa beans. The outcomes refer to the impact that is being created for the intended beneficiaries, meaning the cocoa farmers get a higher income as a result of the activities of the chocolate producing company. The impact refers to the long-term effect on the community as a whole and not just on the intended beneficiaries (Bagnoli & Megali, 2011).

Finally, measuring the institutional legitimacy of a social enterprise is measured by verifying that the enterprise has met the self-imposed standards. For example, a social enterprise that aims to end child

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9 labour in its supply chain, measures its institutional legitimacy by verifying that child labour is not part of its supply chain. Legitimacy is a generalized perception or assumption that the actions of an entity are desirable, proper, or appropriate within some socially constructed system of norms, values, beliefs and definitions. Strategic legitimacy sees legitimacy as an operational resource. This school of thought assumes a high level of control from the managerial side when it comes to legitimacy. Institutional legitimacy on the other hand is depicted as a set of constitutive beliefs (Suchman, 1988). Cultural believes are at the foundation of the legitimacy of an organization. Other measuring instruments to determine the institutional legitimacy of a social enterprise involve compliance with the laws that are applicable to the enterprise and the extent to which beneficiaries and stakeholders are satisfied with the product that has been created. Social Enterprise NL includes one other important indicator in measuring institutional legitimacy, being the amount of awareness the social enterprise has created regarding the social phenomenon it wants to tackle.

Scaling social impact

To reach their social mission, social enterprises strive to maximize social impact (Sherman, 2006). However, maximizing or scaling social impact is a though challenge (Bloom & Smith, 2010). To increase their impact social enterprises can take two strategies, whereby one does not exclude the other. First, they can show the industry they are active in that business can be done differently and in a sustainable manner. By taking on an exemplary role they aim to change the system from within. In this case the impact created is immense. This strategy is closely linked to the institutional legitimacy aspect that has just been discussed. Increasing institutional legitimacy in terms of creating awareness of the social problem has the potential to influence the rest of the industry. Increased awareness among consumers will eventually result in increased pressure on conventional companies to change the way they conduct business.

A second strategy social enterprises can take to increase impact, is to increase their own business activities and by doing so increase their social effectiveness. Most social enterprises aim to maximize impact by scaling their business model (Dees et al., 2004). After all, with economies of scale comes large-scale impact. Moreover, having economies of scale makes it more likely to influence the industry as well and thus realizing the first strategy. CEO of Fairphone (a Dutch social enterprise) Bas van Abel’s biggest dilemma relates to the desired scale of his enterprise. Van Abel: ‘’It has never been our ambition to maximize our profits by selling as much phones as possible, like an ordinary telecom provider. That would be contrary to our protest against the whole consumption and waste culture. However, we do have to grow as a business to have any effect on the market.’’ (Vrij Nederland, 2014)

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10 According to Mulgan (2006) social enterprises fail not due to flaws in their business model, but due to lack of mechanisms that help to promote, adapt and scale social business models. (Mulgan, 2006, p. 156). This means the ability to scale the business model is at the core of the growth of the social enterprise. Scalability, in terms of impact, is defined by Dees (2008) as ‘’increasing the impact a social-purpose organization produces to better match the magnitude of the social need or problem it seeks to address.’’ (Dees, 2008, p. 18). This definition can be used in the context of both impact scaling strategies, since it does not clarify whether the impact needs to be created as a result of the business activities of the social enterprise itself.

A literature review by Weber, Kröger and Lambrich (2012) provides a comprehensive framework and helps us to understand the causalities and interdependencies that come with the scalability of social impact. In their work Weber et al. (202) find 241 drivers and 144 scaling strategies. The drivers can be divided into seven key drivers, which determine the scaling of social impact. These key drivers are: commitment of the individuals driving the scaling process (1), management competence (2), entire or partial replicability of the operational model (3), ability to meet social demands (4), ability to obtain necessary resources (5), potential effectiveness of scaling social impact with others (6) and adaptability (7). While this framework provides us with a better understanding of the drivers that determine the (successful) scaling of social impact, the framework does not discuss the threats that come with the scaling the business model of a social enterprise to its core purpose. The topic of sustainability, for example, is not mentioned in the framework. For social enterprises one of the biggest challenges is to increase their production (i.e. economic development) while maintaining their self-imposed social and environmental sustainability standards throughout their supply chain.

2.2 Governing a sustainable supply chain

Basic concepts

Before diving into the literature, some basic concepts need to be explained. First of all, the difference between a supply chain and a value chain. The supply chain deals with all parties that are involved in fulfilling the request of the customer. Core elements of supply chain management are planning and design of a product, sourcing the right materials, manufacturing the product and finally delivering the final product to the buyer. The value chain is a set of activities a company conducts to create a competitive advantage. Compared to the supply chain, the value chain is a much more strategic process. Core activities include innovation, research, product testing, marketing and trend analysis. Although adequate value chain management is key to creating a successful business, for the purpose

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11 of this research the focus will be on the supply chain and more specific on how social enterprises can create a large-scale supply chain that is in line with their social mission.

Secondly, the concepts of upstream, midstream and downstream need to be explained. These concepts refer to the location of a supplier or company in a supply chain. Downstream refers to, mostly brand-owning, companies that are closest to the end user. The social enterprise can be characterized as a downstream company. Midstream companies are responsible for trading, processing and refining of raw materials. The extraction of raw materials is the responsibility of upstream companies or suppliers.

Sustainable supply chain management

Corporate as well as academic interest in sustainable supply chain management has increased considerably over the last years (Seuring & Müller, 2008). Triggers for sustainable supply chain management often arise from external factors, such as incentives from governments, stakeholders and customers. Focal companies, companies that either govern the supply chain, design the product or provide the link with the customer, are more and more being held responsible for what goes on in their supply chain. Well-known brand-owning companies like Nike, Addidas and Bennetton, have been blamed for problems that occur during the production of their products and are being held accountable by their stakeholders to take responsibility over their supply chain. Social enterprises on the other hand place sustainability at the core of their business, meaning they will not have to be pressured into setting up a sustainable supply chain, but start out with one. The difference between companies implementing CSR policies in their supply chain later and social enterprises that use a sustainable supply chain from the get-go is the difference between an ‘internalist’ view of CSR and CSR as a product of external forces (Tsutsui & Lim, 2015).

Handfield and Nichols (1999) define the supply chain as follows: The supply chain encompasses all activities associated with the flow and transformation of goods from raw materials stage (extraction), through to the end user, as well as the associated information flows. Supply chain management aims to integrate all the activities in the supply chain to create a competitive advantage. The United Nations (1987) defines sustainable development as: development that meets the needs of the present without compromising the ability of future generations to meet their own needs. The three pillars of sustainable development are economic, social and environmental. Combining the concepts of supply chain management and sustainability leads to the following definition of sustainable supply chain management: the management of material, information and capital flows as well as cooperation among companies along the supply chain while taking goals from all three dimensions of sustainable

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12 development, i.e., economic, environmental and social, into account which are derived from customer and stakeholder requirements (Seuring & Müller, 2008, p. 1700).

Governing the supply chain

Since a supply chain consists of multiple components, the governance of the chain is an important aspect. Governance refers to the processes of interaction and decision-making among actors involved in a collective problem. Supply chain governance in this sense refers to the interaction between the individual chains, from upstream, through midstream, all the way to downstream companies. Governance occurs on different levels, from the corporate level, to the industrial level to the global level. Corporate governance refers to rules according which a firm is controlled internally. If a supply chain would be fully integrated vertically, corporate governance would be enough to describe the governance of a supply chain. However, since the production of goods is dispersed across the globe and encompasses different firms, coordination between these different firms is necessary. Industrial governance refers to this type of coordination between firms working along the same global supply chain (Bair & Palpacuer, 2015). Meanwhile firms along a supply chain are subject to so global governance of state and non-state actors that aim to impose a set of norms on the global production of goods (Bair & Palpacuer, 2015).

From the perspective of the social enterprise trying to scale its supply chain, the industrial governance is the most interesting type of governance to discuss further. Industrial governance refers first to how exchanges between actors in the supply chain occur. Secondly, it refers to who in the chain is able to control the process of coordination. Finally, industrial governance refers to what the consequences are of the coordinating activities for the participants in the supply chain (Bair & Palpacuer, 2015, p. 3). For a social enterprise having a certain amount of control over the supply chain is of great importance to be able to pursue a social agenda. Without any control, the consequences of the coordinating activities are more likely to have a negative impact on the social mission of the enterprise. The question of who has control over the supply chain largely depends on the type of supply chain that is referred to.

A study by Gereffi (1994) on global commodity chains, the academic predecessor of the supply chain, distinguishes between a producer-driven chain and a buyer-driven chain. Producer-driven chains are typically found in technology-intensive industries, in which corporations own the technologies that are being used, often through vertical integration of the production process. Buyer-driven chains on the other hand, are more often found in brand-owning companies, that structure the production process without owning any of the production sites (Reed, 2009). In a producer-driven supply chain control depends on ownership and authority relations between the different departments in the firm. In a

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13 buyer-driven supply chain control is based on bargaining power between separate entities in the chain. A social enterprise utilizing a producer-driven chain has the sole control over its production process and can thus quite easily pursue its social agenda. However, a social enterprise that utilizes a buyer-driven chain, will need to find the partners with similar social ambitions, to include in their supply chain.

Buyer-driven chains are commonly found in the production of apparel, toys, and food. Innovation in these industries lies in product design and marketing instead of in the manufacturing of the product. This makes it relatively easy for firms to outsource their production. Producer-driven chains are commonly found in more technology-intensive industries such as cars and consumer electronics. However, outsourcing part of the production has become more common in these latter industries as well. Gereffi (1994) made the distinction between producer-driven and buyer-driven supply chains in the early nineties and since then the organization of supply chains has undergone significant changes. Outsourcing has become common practice in all type of industries and technology-intensive industries are no exception. As a result, technology-intensive industries have become much less vertically integrated and are becoming more network-oriented.

The literature on global commodity chains is still a very relevant body of literature especially when it comes to the power large focal-companies have over their supply- chain, without actually owning any of the production sites. However, this body of literature does not go deeper into the role networks play in the organization of producer-driven or buyer-driven supply chains. For this we must revert to the literature on Global Value Chains (GVC)1_{. In his more recent work Gereffi (2005) presents a} framework that distinguishes between five patterns of governance in Global Value Chains. He bases this distinction on three key variables: the complexity of transactions (1), the codifiability of transactions (2) and the competence of suppliers (3).

By giving a higher or lower value to each of the three variables, Gereffi (2005) identifies five general governance models of global value chains: market, modular, relational, captive and hierarchy. The simplest form of governing a global value chain is done through the market. Markets include firms and that buy and sell goods without any other interaction besides providing money for goods. The linkages between actors in this type of governance are minimal. The modular, relational and captive governance modes are all examples of network-style governance. They differ on the extent to which

1_{To honour the work of Gereffi (2005), this part of the theoretical framework will refer to value chains instead of supply chains. However,}

the way Gereffi talks about value chains he could easily be referring to supply chains, since he does not discuss core aspects of the value chain but instead focusses on the relationship between supplier and lead firm.

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14 suppliers and lead firm dependent on each other. In a modular governed chain, costs that are associated with switching from supplier are a lot lower than in the case of a relational or captive governance mode. In relational value chains, there is mutual dependence between supplier and lead firm. In captive value chains, however, the supplier depends on the lead firm and is thus considered captive. The fifth governance mode, hierarchy, is characterized by classic vertical integration of production, all transactions take place in one firm (Gereffi, 2005).

Table 1: key variables in determining the governance of the Global Value Chain

Governance type Complexity of transactions

Ability to codify transactions

Competence of suppliers

Market Low High High

Modular High High High

Relational High Low High

Captive High High Low

Hierarchy High Low Low

Source: Gereffi (2005)

We can generally assume that buyer-driven supply chains are commonly coordinated through a market, modular or relational governance mode and producer-driven supply chains trough a captive or hierarchy governance mode (Gereffi, 2005). However, since producer-driven supply chains are becoming less vertically integrated and are moving towards a more network-style mode of governance, we can safely assume that modular or relational governance modes are bound to gain ground in producer-driven supply chains as well.

Like-minded partners along the supply chain

Because of diminished vertical integration within companies, the role of the supplier in the supply chain has changed drastically. Suppliers are no longer viewed upon as transaction partners that supply goods, without adding any value and thus being interchangeable. Instead, suppliers are more treated as partners. The selection of the right partners to integrate in a supply chain will contribute to value creation and is ultimately key to the success of company. Responsible sourcing of raw materials includes capacity building at the level of the upstream supplier, be it the cocoa farmer or the miner. Transparency from the upstream supplier all the way to the focal company (or the social enterprise) is key to setting up a network of suppliers and partners (D’Heur, 2015). Focal companies in these networks are characterized by taking a proactive approach and helping suppliers to develop new skills to boost production. In the end, increased production is beneficial both for the upstream supplier and

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15 for the focal company. This often results in a long-term relationship between the supplier and the focal company.

2.3 Traceability of resources

Consumers, NGO’s and other actors, including focal companies themselves, increasingly demand to know more about the origins of the materials that go in their products and the conditions under which they have been produced. Knowing if you use responsibly sourced materials is only possible when resources can be traced back to their source. Traceability is defined by the United Nation as: ‘’The ability to identify and trace the history, distribution, location and application of products, parts and materials, to ensure the reliability of sustainability claims, in the areas of human rights, labour (including health and safety), the environment and anti-corruption’’ (United Nations, 2014).

Since the introduction of the first certified fair trade products in the Netherlands in 1988, the sales of these products have grown tremendously. Among many other scholars, Reed (2009) argues that the rapid increase of sales of these type of goods is the result of involvement of corporations. Participation of corporations increases the potential to create a bigger market for fair trade goods. The introduction of certification programmes for consumer products was a significant development in the fair trade movement. The first labelling organization was the Max Havelaar Foundation in the Netherlands. Fairtrade certified coffee in the Netherlands was an immediate success and resulted in the expansion of the fair trade programmes of Max Havelaar to neighbouring countries. Since establishing the first certification scheme, a lot of other competing schemes focussing on different aspects of sustainability have been set up.

Traceability models

Traceability models are a valuable tool to determine whether a supply chain is sustainable. There are three different traceability models, that all have a different approach when it comes to tracking goods throughout the supply chain: product segregation, mass balance, and book and claim. A differentiation between these three models is based upon the extent to which non-certified materials and certified materials can be mixed and as a result to what extent claims of sustainability can be made concerning the end product. Depending on the ambition of the company and the type of commodity that is being traced, the decision for one of the three models is made.

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16 In the product segregation model, certified materials are physically separated from materials that have not been certified. This will result in an end product whereby consumers know that 100 per cent of the product consists of materials that have been certified. A product segregation model can come in the form of bulk commodity and identity preservation. A bulk commodity model allows certified materials from different producers to be mixed. Mixing cocoa beans from different certified cooperatives is an example of a bulk commodity model. However, all cooperatives must adhere to the same certification standards. The identity preservation model on the other hand does not allow for certified materials to be mixed and aims to provide traceability all the way back to the micro-level of an individual farmer. The product segregation model is the only one of the three models that does not mix certified and non-certified materials.

Figure 1: Traceability models

Source: A guide to traceability (UN, 2014)

The mass balance model does allow for certified and non-certified materials to be mixed. But in the end only the exact volume of certified material that has entered the supply chain can be sold as such. The mass balance model is commonly used for commodities like cocoa, coffee, and tea since segregation of these commodities is very difficult to achieve (United Nations, 2014). In case a mass balance model has been used, customers are uncertain about the share of certified material that has ended up in their product. Companies using this model are not allowed to say that their product uses certified materials, but instead can only claim that a product contains a certain percentage of certified ingredients. For instance, if the mixture contains 50 per cent of certified materials and 50 per cent of non-certified materials, a company using this mixture can only claim that their product is 50 per cent certified.

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17 According to the Guide to Traceability (2014), a report published by the United Nations, the cocoa supply chain is too complex to make complete segregation possible. It would be too expensive for most companies to implement. UTZ Certified for example works with a mass balance traceability model to be able to boost sustainable production of cocoa and lower cost across the whole supply chain. However, based on empirical evidence which will be presented later on in this research, Tony’s Chocolonely uses a product segregation model (cocoa can be traced back to a specific cooperative) and even aims to work towards an identity preservation model, whereby the cocoa can directly be traced back to the farmer (instead of the cooperatives).

The book and claim model is different from the previous two models in the sense that traceability is not possible at different stages throughout the supply chain. Companies using the book and claim model can buy sustainability certificates based on the volume of certified material that has entered their supply chain. The book and claim model is a lot less costly, since it does not allow for physical traceability of resources throughout the supply chain, but it still increases the demand for sustainable materials. A company using the book and claim model can claim that their product has supported the sustainable sourcing of commodities. However, it is uncertain that their products contain certified materials.

Scaling traceability

In the Guide to Traceability three aspects are identified that prevent supply chains from achieving full traceability (United Nations, 2014). These three aspects are: complexity of supply chains, availability of traceable resources and costs associated with traceability of materials. Traceability requires all actors along the supply chain to collaborate to trace the history of a product. But different actors along the supply chain might use different systems making it more difficult to keep track of the origin of a product. Technological advancements are making traceability much more manageable. Due to the complexity of traceability, the amount of traceable products is limited. Larger companies in particular are having difficulties in obtaining fully traceable materials to use in their production. A model like the book and claim model might not provide a company with fully traceable materials but it will contribute to an increased availability of certified materials. Finally, the costs that are associated with traceability are a concern for companies. Substantial investments in the production process are often necessary in order to be able to trace resources along the supply chain. Bar codes, chips and other technological developments can contribute to lower costs associated with traceability.

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2.4 Trade-offs between the dimensions of sustainability

They subject of corporate social responsibility (CSR) has, in the mainstream debate around sustainability, long been viewed as a defensive strategy. For example, as ‘window-dressing’ to boost a company’s image (Aguiler et al., 2007). Because of this CSR has often been seen as a cost factor that needed to be taken into account (D’Heur, 2015). More recently sustainability and CSR are more and more being integrated in the DNA of the company itself. The social enterprise is an example of such a company.

Sustainable value creation

Value creation is a term often only found in business management and economics. Value creation, in these sectors, is the principle of creating added value and by doing so generating profit for the company (D’Heur, 2015). The concepts of sustainability and value creation together form the basis of sustainable value creation, which D’Heur (2015) defines as: a companies’ commitment to structure all aspects of its core business (i.e., products and supply chain) in ways that deliver economic, ecological and societal value-add at the same time (D’Heur, 2015). According to D’Heur (2015) companies need to focus on all three dimensions to ‘stay in the game’ as a company. Companies that just focus on the economic dimension of value creation and treat everything else as a resource, may it be raw materials or suppliers, as expendable resources, will fail. All three dimensions (economic, social and environmental) need to be considered by companies to be viable. This goes for social enterprises as much as any other company. Moreover, social enterprises do not only need to balance all three dimensions to remain viable as a business, but are also judged on maintaining their self-imposed standards. Bagnoli & Megali (2011) refer to institutional legitimacy, which involves verifying that the social enterprise has met the self-imposed standards, as one of the measurements of the success of a social enterprise.

Mainstream CSR literature follows a win-win assumption. Economic, environmental and social sustainability can in this body of literature be achieved simultaneously. The win-win assumption takes the position that there is a business case for sustainability. Managers should focus on finding cases in which all three dimensions are in harmony, since this would be beneficial for the company. The focus of the mainstream debate is on identifying cases in which socially and or environmentally responsible behaviour results in financial win. Mainstream literature, however, neglects the existence of trade-offs and conflicts that might have occurred between the three dimensions.

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19 Hahn et al. (2010) on the other hand, argue that trade-offs due occur between the three dimensions and that these trade-offs are the rule rather than the exception. Trade-offs are defined as: compromise situations when a sacrifice is made in one area to obtain benefits in another (Byggeth and Hochschorner, 2006, p. 1420). Trade-offs in this sense are in contrast with the previous discussed win-win situation. Trade-offs refer to situations where a compromise between at least two of the tree dimensions has to be made. However, this does not necessarily mean that contribution to sustainable development is of less importance compared to a win-win situation (Hahn et al., 2010).

In their work Hahn et al. (2010) discuss four levels on which trade-offs can occur: the individual level, the organizational level, the industry level and the societal level. For the purpose of this research, the organization level is most relevant to explore further. At the organizational level trade-offs occur between the different dimensions of sustainability, often as a result of the vision of the company on sustainable development. Coming back to social enterprises, some have been set up with a social mission in mind, while others aim to achieve an environmental mission. The former is more likely to trade on the environmental dimension, while the latter will sooner trade on the social dimension.

Based upon empirical evidence, which will be presented later on in this research, it can be stated that trade-offs due occur at all three social enterprises that have been studied in this research. However, their process of trying to scale is not reason behind these trade-offs and in fact helps them to limit trade-offs and help push their social agenda trough.

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3. Methodology

In this research, an inductive approach has been chosen. Inductive reasoning results in the supplying of strong evidence for a conclusion. However, contrary to deductive reasoning, which leads to a conclusion that can be considered certain, inductive reasoning results in a conclusion that is probable (Copi et al., 2007). In this research, an inductive approach has been chosen to have the flexibility to incorporate unexpected variables and causalities during the research process. Inductive reasoning takes a bottom up approach. The findings of this research will enable me to provide an answer to the research question. Based on the findings I will be able to formulate a hypothesis for the social enterprises sector as a whole.

3.1 Sample and case selection

Population

The population of my research will be social enterprises that rely on a transnational supply chain to create their product. The unit of analysis is the social enterprise. This research specifically focusses on social enterprises that are dependent on resources that can be found in countries outside of where they are established. Moreover, the research focusses on product creating enterprises rather than service providing enterprises. For feasibility purposes, considering the time frame in which this research has to be carried out, only Dutch social enterprises will be selected. However, the outcome of this research can be generalized for the population as a whole. This means that the outcome should also be applicable to non-Dutch social enterprises. Nevertheless, because of the qualitative nature of this study, the number of cases that will be studied is small, meaning the external validity is relatively weak and generalization should be done with a certain restraint. A small N enables a more in-depth study but it also makes generalizing the findings for a larger group much harder than a large-N study. By using cross-case comparisons the generalizability of the findings will be expanded.

Cases

In order to answer my research question, I will look at three cases. All three cases fit the population as previously described. Moreover, start-up social enterprises have deliberately not been selected because of a lack of track-record. Social enterprises that have past the start-up phase and are in the process of trying to scale face other challenges. These challenges are more relevant to the topic of this research than the challenges that come with starting a social enterprise.

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21 The first case is Tony’s Chocolonely. Founded in 2006, the company is one of the few mature social enterprises in the Netherlands. The company focusses on producing fair chocolate bars by eliminating (forced) child labour in their supply chain. Production of chocolate bars is steadily increasing and in 2015, Tony’s Chocolonely decided to expand to the United States, where they opened their first international office in Portland. While Tony’s Chocolonely is proving to be a successful business (in the Netherlands), within the scope of the cocoa industry they are still just a drop in the ocean.

The second case is Moyee Coffee. Established in 2012, the company aims to go beyond Fairtrade by setting up a FairChain. Instead of roasting coffee beans in Europe, Moyee roasts, mixes and packages its coffee beans in Ethiopia. A roasted bean is worth six times more than an unroasted bean. This way more value remains in the country of origin. Moyee’s driving principles are: trade over aid, creating shared value and compete on quality, not poverty.

The third case is Fairphone. Established in 2013, Fairphone aims to launch a movement for fair electronics that do not contribute to the financing of conflicts. On their website they state: ‘’By making a phone, we’re opening up the supply chain and creating new relationships between people and their products.’’ For an enterprise like Fairphone, it is impossible to control their whole supply chain, just because there are too many components involved in producing a phone. Fairphone currently focusses on creating a sustainable supply chain for four of its minerals.

Case selection justification

Although at first these three cases seem drastically different, there are several similarities to be found between the three making it possible to compare them with each other. The cases have been selected on the premise that they fit the population as described above. Moreover, they are all resource dependent (minerals, cocoa, coffee beans) and they all aim to change the supply chain of their respective industry. They just differ with regards to the specific problem within the supply chain they want to tackle. For instance, Tony’s Chocolonely aims to stop child slavery, while Fairphone aims to make the supply chain of consumer electronics more transparent. Another important similarity is that all three companies aim to expand their business activities. They all have a willingness to scale their business. They all aim to rise above being a social initiative that just raises awareness. All three companies are here to stay and aim to influence their respective industries. Finally, all three companies are located in a Dutch context, meaning they deal with the same rules and regulations and are embedded in the same consumer market. In short, there are enough similarities between the three cases to be able to compare them. The differences that remain (i.e. industry and product costs) are not within the scope if this research.

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3.2 Method

In this research, a mixed method approach will be used. The first method being a comparative cases study approach whereby three cases will be studied. The second method is the method of congruence. The congruence method has been chosen to overcome differences between the three cases in order study them as most similar cases.

In his work the System of Logic, John Mill (1848) provides five methods of induction that deal with causality. Mill’s method of difference, in comparative politics also known as most similar systems design, will be used in this research. This method aims to compare cases that are similar in every sense and for which only the dependent variable defers. The method of difference starts out with cases with similar variables and aims to determine why there is a difference in outcome. If A, B, C, D occur together with w, x, y, z, and B C D occur together with x, y, z, then A is the cause of w.

This research looks at how social enterprises can scale their supply chain without compromising on their sustainability standards. The social enterprises chosen for this research are Tony’s Chocolonely, Moyee and Fairphone. They are most similar in the sense that they are all from Dutch origin. Moreover, they all aim to scale their activities in order to increase their impact to be able to influence their respective industries. Lastly, they all create a product for which a supply chain has been set up that extracts resources that can be found in the developing world. However, there are of course also differences between the cases.

‘The method of controlled comparison requires the investigator to find two (or more) cases similar in every aspect but one.’ (George and Bennet, 1979, chapter 9). However, finding similar cases, in social science, is nearly impossible. To overcome problems of equifinality an additional approach is needed. In this research, the method of process tracing will be used to overcome the differences between the chosen cases. This research focusses on if social enterprises can create a large-scale supply chain that remains fair and stays true to the social standards based on which the enterprise has been set up with. To fairly compare the cases studied in this research, the amount of time the enterprises have been in business should be taken into account. Since one of the social enterprises that will be studied in this research has been founded in 2006 and the other two in 2012 and 2013, the biggest difference between the three cases is the time they have been in business. It will be safe to assume that Tony’s Chocolonely is further in the process of scaling up it supply chain in comparison to Moyee and Fairphone.

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3.3 Data collection

To answer the main research question, I will use different data sources. The most important source will be semi-structured interviews with employees from the three selected cases: Tony’s Chocolonely, Moyee and Fairphone. I will broadly ask the same questions to be able to compare the results, but leave room for industry specific questions as well. Additionally, interviews with independent experts, that are not affiliated with any of the selected cases, will be used to get a better understanding of the general picture. To get a sense of both the value chain perspective as well as the social enterprise perspective, interviews with experts from both fields will be conducted.

The interviews will be conducted in four rounds. To get a general understanding of what is involved in creating a sustainable supply chain the first interview that will be conducted is with Shared Value Chain, a management advisory firm that assists all sorts of companies to achieve sustainably better performance by improving their supply chain. Michael D’Heur, founder of Shared Value Chain, will be interviewed as an impartial expert on sustainable value chains. The findings from this interview will serve as input for the semi-structured interviews that will be conducted with employees of the three social enterprises. In the second round interviews with value chain employees at each of the enterprises will be conducted. In the third round interviews with secondary respondents will be conducted. The aim of these interviews is twofold: on the one hand to verify statements made by the value chain employees and on the other hand to approach the questions from a different angle. In the fourth round Stefan Panhuijsen, employee research and lobbying at Social Enterprise NL, will be interviewed to include the broader perspective of the Dutch social enterprise sector.

Secondary data in the form of blogs, impact reports and documentaries will also be used. Moyee and Tony’s Chocolonely both published an impact report for the year 2015/2016. Although Fairphone has not published such a report, they have published several studies and blogs on their website discussing their motives behind certain business choices. In 2015, Michael D’Heur conducted an interview with the director of Fairphone to discuss if Fairphone can trigger a paradigm shift in the electronics value chain. This and other blogs published by Shared Value Chain, will also be used as a data source. The final data source will be documentaries about the cases. Tony’s Chocolonely has its own documentary about the story behind their company. Fairphone was the subject of a Tegenlicht episode in 2016.

By combining primary data in the form of interviews and secondary data in the form of blogs, reports and documentaries, an in-depth picture of the three cases studied in this research, will be constructed. Validity and reliability of the data

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24 The main data source will be interviews. Validity threats concerned with this type of data source are wrong interpretation of the interviewee. I will limit this threat by posing open-ended questions and letting the interviewees speak in their own words. To get the information needed to answer the main research question I will ask process-focused questions, to limit the possibility of interviewees theorizing on their own. Another threat could be that the interviewee is painting a different picture from reality. To counter this threat, I will interview multiple employees (2) at each company. This way I’ll be able to compare their answers.

3.5 Theoretical and societal relevance

Theoretical relevance

There is a gap in the social enterprise literature when it comes to creating a large-scale sustainable supply chain. Environmental and social criteria should be equally important in a sustainable supply chain. However, a literature review by Seuring & Müller (2008) shows that more focus has been put on the environmental than on the social dimension. Out of the 191 articles included in this review only 20 mention just the social dimension, in contrast to 140 articles mentioning just the environmental dimension. 31 articles mention both dimensions. New (1997) was the first scholar to integrate both the environmental and the social dimension. According to Seuring & Müller (2008) there is a clear shortcoming in the supply chain management literature when it comes to discussing social issues. This research will contribute to the field of supply chain management literature and will take both the environmental and the social dimension into account.

Moreover, the literature on trade-offs in sustainability do not take the size of the (social) enterprise into account. The literature does not make a distinction between smaller and larger companies. This research will contribute to the literature on trade-offs and more specifically on the effects of the scaling process on these trade-offs. Are (small) enterprises that are trying to scale their business willing to compromise for the purpose of scaling?

Societal relevance

Similar to traditional enterprises, social enterprises see an opportunity to satisfy a need within the market. However, unlike traditional enterprises, their primary focus is on a social mission rather than on profit maximization. For several social enterprises (Tony’s Chocolonely, Moyee, Fairphone) inspiring other (conventional) businesses within their industry to conduct business differently is the reason the

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25 company was founded. To fulfil their social mission and inspire others to do so as well, social enterprises need to scale-up, while maintaining their self-imposed sustainability standards.

So far, very few social enterprises have been able to reach large amounts of people, at least not compared to their conventional counterparts. A significant amount of social enterprises depend on subsidies to reach financial sustainability. Until financial sustainability is reached, most social enterprises rely on donors for their income rather than their core (business) activity. To grow as a business, financial sustainability is crucial. Why is it societally relevant for social enterprises to scale up? Unlike conventional businesses and NGO’s, social enterprises are in the unique position to contribute to the society while simultaneously run a financially sound business. To increase their impact social enterprises need to scale up their activities and be able to compete on a global scale.

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4. Analysis

This chapter will discuss the results of this research. The following topics have been discussed in the interviews with Tony’s Chocolonely, Moyee and Fairphone: the desire to scale in order to increase impact, traceability of resources, trade-offs between scale and sustainability and trade-offs between the individual dimensions of sustainability. These topics where chosen based on preliminary desk research and based on the findings from the first interview with a sustainable supply chain expert.

The following sub-questions have been formulated:

1. What is the role of the social enterprise in society?

2. Does the traceability model influence the scaling chances of the supply chain? 3. What is the role of partners in scaling the supply chain?

4. Is there a trade-off between scale and sustainability?

This chapter will be divided into three sections. The first section will discuss the role of the social enterprises and aim to answer the first sub-question. The second section will discuss how social enterprises can scale their supply chain by answering the second and third sub-question. And the final section will discuss trade-offs social enterprises might encounter when trying to scale their business. In the final section, the fourth question will be answered. The answers to the individual sub-questions will contribute to providing the answer to the main research question which will be presented in the conclusion of this research.

4.1 Becoming a successful social enterprise

As discussed in the theoretical framework of this research, Bagnoli & Megali (2011) measure the success of the social enterprise by using indicators from multiple dimensions. Next to the obvious financial dimension, the success of a social enterprise should also be measured in terms of social performance and institutional legitimacy. This section will discuss the financial performance of the three selected cases and classify them as either a start-up, scale-up or mature business. After discussing the classification, the societal role of the social enterprise will be explained. This section of the analysis will provide answer to the first sub-question: what is the role of the social enterprise,

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27 Financial performance

‘’If you look at small start-ups and social enterprises, most never make it above the ‘ inspiration phase’. Sometimes social enterprises have a great idea and are very inspired but they are not able to run a business. They do not understand the complexity of running a global business with a global supply chain’’ (SVC resp. 1). Although set up with a social mission in mind, social enterprises are first and foremost enterprises and need to perform well financially to survive as a business.

According to the Social Enterprise Monitor 2016, an annual study carried out by network organization Social Enterprise NL, 20 per cent of social enterprises are in the start-up phase, 65 percent in scale-up phase and 15 per cent can be considered mature business. The Social Enterprise Monitor uses the following classification: enterprises set up in or after 2014 are considered start-ups, enterprises that have been in business for at least two years but have an annual turnover of over 1 million euros are considered scale-ups and enterprises with an annual turnover of more than 1 million euros are considered mature enterprises (Social Enterprise Monitor 2016). The social enterprise sector is dominated by young companies. The vast majority of Dutch social enterprises were founded in the last five years, so it is no surprise that the group of scale-ups is as large as 65 per cent (SENL resp. 1, translation by the author).

Following the classification of the Social Enterprise Monitor, Tony’s Chocolonely, Moyee and Fairphone would all be classified as mature businesses. However, in this research only Tony’s Chocolonely will be considered a mature business. Fairphone and Moyee both still need to scale to survive as a business. ’Fairphone and Moyee are growing rapidly, but they are definitely one phase behind Tony’s Chocolonely. They still need more growth in order for their business to survive’’. (SENL resp. 1, translation by the author). Better so, both enterprises have the willingness to scale, which is the first of the seven key drivers that Weber et al. (2012) define to create scalable impact. ‘’For the ability to scale you need to have two things in place. First, consumers who are willing to buy your product and second, the company’s own ability and willingness to scale’’ (SVC resp. 1).

Tony’s Chocolonely

Tony’s Chocolonely is the textbook example of a mature social enterprise. They have been in business for over 11 years and in the financial year of 2015/2016 they had a turnover of 29.3 million euros, with a net profit of 4.9 per cent. The company is still growing rapidly with a 66 per cent increase in turnover in 2015/2016 compared to the financial year of 2014/2015. The main reason that Tony’s Chocolonely is further ahead in the professionalization process compared to Fairphone and Moyee is because the latter two have only been in business for respectively four and five years.

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28 In 2012, Tony’s Chocolonely was taken over by successful Dutch entrepreneur Henk Jan Beltman. Before that, Tony’s Chocolonely was struggling to become a mature business. Between 2012 and 2014 the company’s annual turnover increased with 60 per cent, resulting in a market share of 4.5 per cent in that same year. The next two years that share almost tripled to 12.4 per cent in 2016 (Tony’s Chocolonely, 2016). The exponential growth of the last five years has made Tony’s Chocolonely the success story of Dutch social enterprises. However, the same growth can still be in store for Moyee and Fairphone.

Fairphone

Fairphone has been in business for four years and although they have not published their annual turnover we can safely assume that it will be above 1 million euros. Assuming they have sold around 140.000 phones in 2016 at 500 euros each, their turnover of that year would have been 70 million euros. The social enterprise was profitable in the first two years, which is exceptional for any business, but especially for a social enterprise. After two years they made several large investments, among others a model whereby they can guarantee continuous production, instead of production based on the outcome of a crowdfunding campaign. These investments were at the expense of their profitability, but Fairphone expects to be profitable again in 2018 (FP resp. 1).

Moyee

Moyee has been in business for five years. In May 2017, they launched a crowdfunding campaign on One Planet Crowd to raise 250.000 euros to be able to buy 40.000 kilo coffee from Ethiopian farmers. For prospective investees they published their current and expected financial statements. In 2016 their annual turnover was 1,5 million euros, which would classify them as a mature business according to the classification of the Social Enterprise Monitor. However, even though a company that is currently not making profits can certainly become a successful one, it cannot be classified as a mature business.

The societal role of the social enterprise

Social entrepreneurs see a problem within society they want to tackle and set up a business to do so. Contrary to conventional businesses, social enterprises are mission-driven enterprises. In order to come close to reaching their social mission, social enterprises strive to maximize their impact (Sherman, 2006). This can be achieved either by scaling their own business or by inspiring other companies to start conducting business in a similar manner. The three cases that have been studied in this research all use the same so called ‘road map’. The first step is to create awareness. The second step is setting the right example to follow and showing conventional companies that business can be done differently. The third and final step is having other companies follow their example.

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29 Creating awareness

When it comes to food, people are a lot more concerned with sustainability compared to the electronics sector. ‘’People do not care where their electronic devices come from. I think Fairphone has the opportunity to grow the awareness in this sector and inspire systemic change’’ (SVC resp. 1). Since the roadmap starts with creating awareness, it would be a fair assumption that getting consumers to buy your product is easier if the awareness in the sector is already relatively high. This should make it easier for Tony’s Chocolonely and Moyee to get their story across. Most bars of chocolate and packages of coffee have some sort of certification label by now which causes the consumer to think that the product they buy is a good product. But in the case of electronics, there is not yet a fair trade like label. ‘’I think a lot of progress can be made in a sector where there is no awareness at all yet, since it is easier to go from 0 to 1 than from 1 to 2’’ (SENL resp. 1, translation by the author).

Tony’s Chocolonely found its origin in the Dutch television program De Keuringsdienst van Waarden, a show that provides insight in the production of food and other consumer products. This program aims to create awareness among consumers regarding the products they consume. In the episode about chocolate the Keuringsdienst van Waarden discovered that child slavery is common practice in the production of cocoa. They decided to produce their own bar and release their product at the premiere of the remake of Charlie and the Chocolate factory. It was their goal to raise awareness among consumers when it comes to the origin of their chocolate bar. To date Tony’s Chocolonely is still raising awareness for this issue on a day to day basis. Trough annual market research Tony’s Chocolonely monitors the awareness about child slavery among Tony’s consumers and non-Tony’s consumers. Among Tony’s consumers the awareness of child slavery practices in the cocoa industry is around 70 per cent (TC resp. 1).

Fairphone started as a project by the Waag Society to raise awareness concerning the use of conflict minerals in consumer electronics. For three years, Fairphone was just a campaign and research initiative. It was not until 2013 that the social enterprise Fairphone was officially founded, to increase the reach of the campaign. By producing a smartphone themselves and taking a commercial strategy in doing so, Fairphone aimed to increase the impact of their campaign. Part of the purpose of Fairphone is to inspire consumers. ‘’When consumers start asking for fair produced products, companies will have an incentive to start producing them’’ (FP, resp. 1, translation by the author).

Contrary to Tony’s Chocolonely and Fairphone, Moyee did not start out as a campaign to raise awareness. Moyee was set up as an enterprise from the start. Although the awareness in the food sector, which coffee is a part of, is relatively high, it remains limited to fair trade or utz certification on

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30 the agricultural level. The message of Moyee is much more complex and goes beyond certification (MC, resp. 1). To get their message across, Moyee mostly uses online campaign such as the Thunderclap campaign. At the end of a thirty day online crowdspeak campaign Moyee had gained 1.5 million new social media followers.

Setting the right example

All three enterprises aim to set the right example for others in their industry to follow. While Moyee is trying to radically change the supply chain of coffee by setting up a local roasting facility, Tony’s Chocolonely and Fairphone aim to change the system from within (MC, resp. 1, TC resp. 1, FP resp. 1). Tony’s Chocolonely uses the same intermediaries as any other chocolate selling company does. ‘’We do not try to radically change the system, instead we work with existing entities like cooperatives of farmers, local and international traders and chocolate maker Barry Callebaut. The mechanisms already exist, this makes it easier for others to participate as well’’ (TC resp. 1, translation by the author). Fairphone essentially works in a similar manner. By starting new projects or supporting existing ones they aim to create a traceable supply chain for the minerals that go in to their phones. Other companies can either join their projects or set up similar ones. Tony’s Chocolonely and Fairphone both make it easier for other parties in the industry to work the way they do, because the transition for conventional companies is a lot smaller than it would be in the case of Moyee’s FairChain. However, all three companies have in common that they first need to have proof of concept before others in the industry will start noticing them. When a small social enterprise is able to set up an innovative supply chain the big companies will not yet be threatened, However, when the enterprise will start to gain scale that is when to big competitors will have to start moving as well.

Influencing the rest of the industry

To reach the social mission social enterprises have been set up for, they strive to maximize impact. Either directly by becoming a large social enterprise themselves or directly by changing the industry from within. ‘’You need to have a good balance between idealistic and realistic. You have to accept that the majority of the companies are not ready for the drastic and systemic change that might be necessary’’ (SVC resp. 1). In order to inspire others to change the way they conduct business, Tony’s Chocolonely, Moyee and Fairphone first have to become bigger business themselves. ‘’If a small company is able to do it (run a social business), the bigger companies will not be alarmed. It is not until when a small company gains scale and is starting to become a competitor, that it becomes threatening to the big boys. Moreover, this shows that the issue of scale has been tackled. The big companies will have no choice but to follow and start conducting business in a similar manner’’ (MC resp. 1, translation by the author).

Scaling a sustainable supply chain : a comparative case study of Tony's Chocolonely, Moyee and Fairphone