Harnessing the Market Potential to Make Ethical Home-Based Work the Norm in Global Supply Chains

The Social Innovation

Magnitude of the Problem, and its Root Causes

The global handcraft sector is valued at nearly one trillion dollars and growing at a rate of 8% annually. Yet the workers at its heart remain almost entirely invisible. Estimates suggest that between 20–60% of fashion and home goods production is subcontracted to home-based workers — approximately 300 million individuals worldwide, most of them women. On average, these workers earn just $1.80 per day, 50% less than their factory-based counterparts, in an informal, cash-based economy with no regulatory protection.

During their participation in the Fabric of Change Globalizer, co-created by Ashoka and C&A Foundation in 2016, the Nest team highlighted the following key factors contributing to the magnitude of the problem:

• No applicable compliance standard or methodology: A review of 30+ existing factory auditing models found not a single one globally applicable to home-based or decentralized workers.
• Systematic non-disclosure: Antiquated "no home-based worker" brand policies incentivize factories to discontinue or deny subcontracting — leading either to critical job loss or to workers remaining hidden and unprotected.
• Race to the bottom in fast fashion: Industry pressure for speed and low cost drives unsustainable piece-rate wages and cuts that fall hardest on workers at the bottom of complex supply chains.
• Lack of brand awareness and policy: A double-blind survey of multinational brands found that 92% have artisans and home-based workers in their supply chains, yet most have no adequate policy for this workforce.
• Zero investment in the sector: Of 50 institutional funders surveyed, only 0.02% had invested in the hand and home-based work sector.

Based on their systems change analysis, the Nest team made it a mission to make home and small workshop-based labor visible, safe, and economically viable — by creating a universally applicable ethical standard for decentralized supply chains and shifting industry norms so that home-based work is embraced, not hidden.

"The framework for viewing systems change was very eye-opening for me at the time. It really helped me think through — and gave me the language to talk about — how we address root causes rather than symptoms. It's the first step: at least it gets you in the door." 

Strategy to Catalyze a Network of Changemakers towards the Targeted Mission

The field/market building strategy involves establishing the first industry-wide standard for home-based work, then engineering adoption across the entire supply chain ecosystem — brands, auditing bodies, governments, and consumers — so that ethical home-based work becomes the norm, not the exception. The strategy leverages market forces (brand purchasing power and consumer demand) as the engine of change, while philanthropy ensures the independence and rigor of the standard itself.

Some of the tactics they deployed towards the mission as a part of the strategy include:  

1) Influencing the Field: Co-Creating the First Ethical Compliance Standard for Home-Based Workers

Nest recognized early that a standard only has power if the industry it seeks to govern has a hand in building it. After conducting a competitive analysis of 30+ factory auditing systems and a double-blind brand survey, Nest convened a Steering Committee of nine industry-leading brands — including Eileen Fisher, Patagonia, PVH, Target, The Children's Place, and Williams Sonoma — to co-develop the Nest Standards for Homes and Small Workshops. These brands brought compliance expertise, credibility, and peer influence to bear on the rest of the retail sector.

The Standards were co-built in close partnership or consultation with several standard-setting bodies and industry organizations — including Fair Trade USA, SAI, ISEAL, the United Nations Office of Partnership, the Center for Child Rights and Business, and Arche Advisors — and subjected to extensive piloting across three countries before public launch. A permanent Nest Standards Committee — a multi-stakeholder governance body comprising worker rights groups, auditing partners, artisan businesses, brands, and legal experts — oversees each revision cycle to ensure the standard remains current with shifting labor law, field realities, and global best practices. The standard recently underwent its latest public revision, with open feedback invited from any stakeholder across the sector.

"Some of our strongest brand partners have made our Standards a requirement for eligible suppliers: if you're going to use home-based work in your supply chain, you have to be certified or making progress through Nest's compliance program. The more that brands adopt our Standards, require disclosure, and expect transparency from their suppliers, the more effective and positive our program will be for the sector as a whole."

2) Collaborating with Select Auditing Partners & Artisan Businesses through a Tiered Delivery Model to Scale Reach without compromising the Integrity of the Standard

To expand reach beyond Nest's own bandwidth while maintaining the rigor and relational quality that define the program, Nest developed a two-tier delivery model. In the first tier, Nest delivers the full training-first program directly in select supply chains. In the second, Nest works with a small group of rigorously vetted and trained auditing firms who can implement the program — but never independently of Nest's involvement in remediation and pre-training.

To date, Nest has collaborated with three auditing partner firms across three countries, carefully selected for their mission alignment and willingness to adopt Nest's trust-based, improvement-oriented approach — a significant departure from conventional audit-and-grade models. The program has also engaged three NGO expert consultants to strengthen child labor, health and safety, and worker voice components within the Standards and methodology, deepening impact for participating workers.

In parallel, Nest open-sourced the Standards and launched an online digital curriculum that mirrors the training and remediation phases of the Ethical Handcraft Program, enabling artisan businesses globally to begin their own journey toward compliance — while preserving the Ethical Handcraft Certification and Seal exclusively for those verified through Nest's full onsite assessment process. A new Nest Verified Handcraft™ program — establishing verifiable, production technique-specific definitions of what "handcrafted" means and elevating the value of truly handcrafted products — is set to launch in Spring 2026. This parallel and complementary verification mark can be used independently or alongside Ethical Handcraft certification, offering a clearer pathway toward full worker wellbeing standards.

"We understand that social compliance at this level of the supply chain is challenging and new for most vendors. Our programs were specifically designed to support vendors through the process, focused on continuous improvement and learning rather than just scoring. We want to provide vendors with the education and tools they need to succeed."

3) Involving Maker Communities in the US & Informal Workers in Adjacent Sectors to Adapt the Model beyond its Original Scope

What began as a global program serving artisan businesses in developing economies has grown significantly in scope. In 2016, Nest launched Makers United, a parallel program investing in maker entrepreneurs in the United States, reaching 2,726 makers and creative entrepreneurs across all 50 states and Puerto Rico. Accelerated by COVID-19 and the Black Lives Matter movement in 2020, this domestic program has grown to represent approximately 50% of Nest's work — demonstrating that the conditions of informality, invisibility, and underinvestment facing home-based workers are not unique to the Global South.

Beyond geography, Nest has begun piloting the Ethical Handcraft model in adjacent informal sectors — most notably with two waste collector communities in Mexico and Indonesia, whose piece-rate-per-kilo payment systems and supply chain structures closely mirror the dynamics of artisan home-based work. Nest is currently seeking partnerships and funding to develop a parallel version of the standard specifically adapted for waste collection, with accompanying auditing practices — a significant proof of concept for the model's transferability across the informal economy.

"It's been really exciting to see the adaptation into other sectors. We're learning that the model has longer legs than even we originally found during the Globalizer. The basics — informal work, piece-rate wages, no visibility, no protections — those dynamics appear in more places than we thought."