Fairphone makes a positive impact with sustainable smartphone

‘Do you want to do something meaningful? Then wait for the latest Fairphone 3+.’ That’s a line from a social media campaign by the Dutch smartphone brand, which has been producing phones as fairly as possible since 2010. For the smartphone is here to stay. But the raw materials needed to make the globally popular gadget are not. Unless consumers and the electronics industry choose for a more sustainable smartphone.

Fairphone shows that smartphone production can be fairer, more sustainable and more ethical. That is by making a phone that ‘cares about people and the environment and is good for the planet and the wallet.’ Together with over 100,000 users, we want to set an example for change and responsible entrepreneurship. To raise awareness about the smartphone. Fairphone is committed to the fair sourcing of raw materials such as tin and gold by avoiding child labour and improving working conditions. The company is also transparent about the origins of its raw materials and about the process of manufacturing the phone.

Fairphone CFO Noud Tillemans in the podcast Grenzeloos Ondernemen of the Dutch Good Growth Fund (DGGF): “To the industry we say: you can operate with fair production chains and good working conditions. And to customers we say: this is how your phone is made; don’t accept that. Fairphone is the only phone in the world that is fair for both people and planet. Also since the phone is modular, it can be repaired and have a longer life span. That reduces its CO2 footprint. iPhones and other brands are completely glued together so that you have to buy a new one as soon as it stops working.”

Listen to the #Grenzeloos Ondernemen podcast in which Fairphone CFO Noud Tillemans talks about doing business internationally, the sustainable mission of Fairphone, and how DGGF helps that effort (in Dutch).

Responsible entrepreneurship sounds great, but it must also be profitable. That is needed to grow and take the next step and produce an even better phone. And to create even greater impact. “To be an inspiring example, we have to demonstrate that we are financially healthy and commercially successful,” says Fairphone CEO Eva Gouwens.

Fairphone approached the Dutch Good Growth Fund (DGGF) when it wanted to develop new products and strengthen its mission. In late 2018 the fund provided a guarantee for two ABN AMRO loans worth a total of 9 million euro to Fairphone. That gave the company, active in more than 15 countries, the opportunity to scale up operations and develop the Fairphone 3 and 3+ as successors to the Fairphone 2.

The ABN credit can partly be used to issue so-called Letters of Credit for purchasing the Fairphone 3 and 3+ from the Chinese supplier. These letters provide security in international transactions

Tim van Galen, Senior Investment Manager at DGGF: “To produce the telephones in China you have to pay some costs in advance. Production of the phones costs time, and it takes months before you can sell them. That means you need working capital. Regular banks consider it too risky to finance such a venture and prefer certainty. We at Invest International and DGGF can help here. Certainly when it comes to expanding into emerging markets and, as in the case of Fairphone, achieving the Sustainable Development Goals. For example, Fairphone contributes to sustainable local employment in DR Congo and Uganda – DGGF countries – because it sources raw materials there. So we make a perfect match.”

1. Cobalt: thanks to a new battery supplier and collaboration with the Fair Cobalt Alliance, Fairphone has incorporated fair cobalt from DR Congo into the chain. As a result, 99 percent of the cobalt used is extracted fairly according to the mass-balance principle.
2. Plastic: the use of recycled plastic for the Fairphone3+ modules grew from 50 to 75 percent, and for the covers from 0 to 50 percent.
3. Neodymium: 90 percent of the neodymium used for the vibration motor in telephones now comes from recycled material, and that figure reaches 100 percent for the speakers in the telephone.

So the percentage of fair materials in Fairphones grew from 32 percent in 2019 to 56 percent in 2020.

• producing sustainable smartphones in a responsible way.
• contributing to local employment and knowledge transfer.
• improving working conditions and wages for workers in the telephone production chain.
• stimulating sustainable local employment in DGGF countries such as DR Congo and Uganda.
• contributing to the Sustainable Development Goals 8 (Decent work and economic growth), 9 (Innovation, industry and infrastructure) and 12 (Responsible consumption and production).