This is a short analysis of the official Fairphone 2024 impact report.

Fairphone is kinda cagey about how much money they exactly spend on fair/eco initiatives, giving only very little information on what exactly it spends in these departments.

For a good reason, it is not a lot.

Specifically, these numbers are given in the report for 2024:

  • The workers assembling the phones get $1.20 of “living wage bonus” for each phone assembled. This bonus is spread over all workers in the factory, no matter if they worked on fairphones or not, coming out to a yearly bonus of $60.67 per worker.
  • $3000 was spent on gold fairwashing credits for some artisanal gold mine in Tanzania
  • $13000 was spent on fairwashing credits for 2.5 tonnes of cobalt (that’s 20% of the raw world market price of cobalt).

That’s everything. They do talk about a few other fair/eco initiatives in there, but if you read about what they are doing there, it’s usually very little and mostly marketing speech. We can safely assume that if any other initiatives would cost more than the ones mentioned above, they would have put these values into the impact report.

They sold 103 053 phones in 2024, so the credits mentioned above come out to just $0.155 per phone.

So to account for the rest of their initiatives and credits, let’s be ultra generous and assume they paid 10x of that for all of these initiatives and credits, bringing this value up to $1.55 per phone plus $1.20 in living wage bonus, which gives us a total of $2.75 per phone.

To double check how realistic these numbers are, lets look at their use of fair materials using the Fairphone 5 as our example.

On page 42 they claim “Fair materials: 76%”, but with the disclaimer “Average across 14 focus materials” next to it.

These 76% do not consider materials that are not “focus materials” (and aren’t acquired fairly at all) and it also doesn’t take into consideration the different distributions of the materials in the phone. Some materials (e.g. iridium) are only found in trace amounts in the phone, while other materials (e.g. aluminium or plastics) make up a large part of the weight of the phone.

On page 67 they go into more detail. Here they claim that only 44% of the materials by weight are “fair”. To make this even worse, 37% of these 44% are recycled. Specifically, the materials they use in recycled form are metals, plastics and rare earth elements. These are materials that are cheaper to recycle than to mine, which means these 37% of “fair” materials cost nothing to Fairphone and might even save them money. You will likely find similar shares of recycled materials in any other phone too.

Of the 7% “fair” materials that are left, only 1% is actually mined fairly, the remaining 6% are fairwashed using credits. As we have seen above, these credits are really cheap (adding maybe 20% to the price of the material).

On top of that comes the fact that the raw materials make up only a tiny fraction of the manufacturing cost of a smartphone. The expensive part is turning a pile of minerals, metals and plastic into chips, PCBs, screens, batteries and assembling all of that. So even if they paid fairwashing credits for all materials in the phone it would likely not cost more than a few dollars.

TLDR: Less than $5 per phone are spent on fair/eco.

So where does the money go? In 2024 they had an EBITDA of just €1 745 840, or €16.94 per phone. That’s not a lot at all, so it’s not like they are pocketing huge sums of money.

Their main problem is that they are a tiny company with low sales figures that has to outsource almost everything they do. On their website they claim to have “70+ employees”. That’s barely enough for supply chain management, sales and marketing. They don’t have an in-house production and likely not even in-house development. They don’t have any economies of scale on their side and they certainly don’t produce screens, batteries, chips or PCBs in house, like other major manufacturers like e.g. Samsung can do. Their development cost is spread over far fewer sold units.

All of this costs a lot of money.

So when you pay an extra €200-300 to buy a Fairphone instead of a comparable mainstream phone, you are mostly paying for a boutique manufacturing process that can’t benefit from economies of scale.

Which is ok, that’s nothing bad to do. Just be aware where that extra money is going.

Buying a Fairphone is hardly fairer than buying a regular phone and it is certainly not more eco friendly than buying an used phone.

  • MHLoppy@fedia.io
    311·
    1 day ago

    I think you’ve tilted slightly too far towards cynicism here, though “it might not be as ‘fair’ as you think” is probably also still largely true for people that don’t look into it too hard. Part of my perspective is coming from this random video I watched not long ago which is basically an extended review of the Fairphone 5 that also looks at the “fair” aspect of things.

    Misc points:

    • In targeting Scope 2 emissions they went with renewables to get down to 0 Scope 2 emissions. (p13)
    • In targeting Scope 3 emissions they rejigged their transportation a little (ocean freight instead of flying, it sounds like?) to reduce emissions there. (p14)
    • In targeting Scope 3 emissions they used an unspecified level of renewable energy in late manufacturing with modest claimed emissions reductions. (p14)
    • Retired some carbon credits, which, yes, are usually not as great as we would like, but still. (p14)
    • They may have some impact by choice of supplier even when they don’t necessarily directly spend extra cash on e.g., higher worker payments.
    • They may have some impact by engaging with suppliers. They provide small-scale examples of conducting worker satisfaction surveys via independent third party which seemed to provide some concrete improvements (p30) and “supporting” another supplier in “implementing best practices for a worker-management safety committee” (p30).
    • They’re reducing exposure to hazardous chemicals in final assembly, and according to them they are “the first company to start eliminating CEPN’s second round priority chemicals” (p31). I don’t know much about this.
    • With partners, they “organize school competitions in which children are educated about […] e-waste” (p40).
    • They’re “building local recycling capacity” in Ghana by “collaborating” with recycling companies (p40).
    • Extremely high repairability (with modest costs for replacement parts that make it financially sensible to repair instead of replace) keeps more phones in use, reducing all the bad parts of having to manufacture brand new phones.
    • The ICs make up a huge portion of the environmental costs of the phone (both with the FP4 (pp 40-41) and with the FP5 (p10)), and Fairphone isn’t big enough to get behemoth chip manufacturers to change their processes (though apparently they’re lobbying Qualcomm for socketable designs, as unlikely as that is to happen any time soon). If you accept the premise that for around half of the phone they have almost no impact on in terms of the manufacturing side, it makes their efforts on the rest a bit better, I guess?

    So yes, they are a long way from selling “100% fair” phones, but it seems like they’re inching the needle a bit more than your summary suggests, and that’s not nothing. It feels like you’ve skipped over lots of small-yet-positive things which are not simply “low economy of scale manufacturing” efforts.