GoodWeave^® aims to stop child labor in the carpet industry and to replicate its market-based approach in other sectors. GoodWeave was founded on a simple premise: If enough people demand certified child-labor-free rugs, manufacturers will employ only skilled, adult artisans, and children will no longer be exploited in the carpet industry.

The use of child labor in handmade rugs drew worldwide attention during the 1980s. Studies by the International Labor Organization (ILO), the U.S. Department of Labor and human rights groups revealed that the industry was employing and exploiting large numbers of children. Many were found to be victims of debt bondage or forced labor, practices specifically banned by the United Nations and the ILO and condemned as forms of slavery.

By the late 1980s, Kailash Satyarthi, Chairman of the South Asian Coalition on Children in Servitude (SACCS), was leading the global fight against child labor. Seeking to create an industry-wide market incentive for manufacturers to stop exploiting children, he founded GoodWeave in September 1994, as a coalition of nongovernmental organizations, businesses, government entities and multilateral groups like UNICEF.

The first carpets bearing the predecessor of the GoodWeave label were exported from India at the beginning of 1995, mainly to Germany. Certification efforts later expanded to Nepal, and both the United Kingdom and the United States joined Germany as importer countries, with GoodWeave International as the body overseeing the country-level offices.

By building both the supply of and demand for child-labor-free rugs, GoodWeave has catalyzed a profound shift in the marketplace. Since GoodWeave's founding, more than 11 million certified carpets have been sold in Europe and North America, and the number of children trapped in exploitative carpet-making work has dropped from 1 million to 250,000.