Fairphone, a "social enterprise" that created the world’s first ethically sourced smartphone, had revolutionized consumers' and investors' expectations around environmental, social, and governance (ESG) responsibility in the electronics industry. The company was justifiably proud of all its accomplishments, but in 2017, Fairphone had been plagued with supply issues ranging from mining to component production. Due to the global nature of the supply chain and mega-companies like Apple dominating the market, it was hard for smaller companies like Fairphone with low production volumes to keep a steady and cost-effective flow of materials—especially when Fairphone was committed to making a product that was not only "good" by consumer standards but also good for the people and environments involved in its production. How could a company trying to do its best to behave ethically overcome its challenges and allay its investors' concerns?
This case and its follow-up, “Fairphone (B): Is It Really Worth It?” (UVA-OM-1713), are recommended for use with two companion technical notes: “Regulations and Standards: Electronics Supply Chain” (UVA-OM-1714) and “Electronics Supply Chain Overview” (UVA-OM-1716).