There are lots of reasons not to buy a mobile phone, at least from an ethical perspective. A typical smartphone is made up of about 40 different minerals, many sourced from poor countries where mining is conducted using exploitative practices, and where profits sometimes finance local conflicts. Phones are usually manufactured in factories where low-wage workers are employed under sub-optimal conditions. And because the average life cycle of a smartphone is one to two years and parts are difficult to replace, they create a lot of electronic garbage.

In a spacious former warehouse in Amsterdam’s eastern docklands, about 50 young entrepreneurs are working to perfect the world’s first socially-conscious smartphone, the Fairphone.

Founder Bas van Abel and co-founders Miquel Ballester and Tessa Wernink had no prior experience making phones, but they believed that the best way to have an impact on the industry was from within. Bas van Abel and Miquel Ballester met in 2011 while researching the prospective market for fair electronics at the Open Design Lab at the nonprofit Waag Society. Tessa Wernink was a marketing and communications professional.

To understand the scope of the challenge, the team went on a fact-finding mission to the eastern Democratic Republic of the Congo, where many minerals are mined, and to China, where most phones are manufactured. They conducted extensive research into smartphone technology. And together, they figured out how to improve practices along the entire value chain of the industry, from raw materials to recycling.

In 2013, Fairphone received an initial investment of €400K (US$450K) and mounted a crowdfunding campaign, surpassing its goal and selling 25,000 phones before production even began. “All of a sudden we had 8 million euros in our bank account,” said Ms. Wernink, “and we hadn’t even made a single phone.”

Partnering with a small factory in China, Fairphone sold 60,000 of the first model. A more complex model, the Fairphone 2, is modular, with parts that someone using a small screwdriver can replace if they break (and, in the future, with upgrades). More than 50,000 have sold since July 2015, at about €525 per phone.

As for the Fairphone 2’s desirability, Wired magazine called it “a decent phone with an exciting internal design and a boring exterior design.” The company is looking to update the case design, and plans to let people customize the look.

The challenges Fairphone faces include setting up distribution channels—it is complicated to sell outside of Europe for reasons including technical specifications in different markets. Also, it’s not possible for the company to verify that the supply chain for every mineral is clean, although it promises that at least four of its components — tin, tantalum, tungsten and gold — are sourced from conflict-free certified mines.

“It’s important at this point to say there is no such thing as a fair phone yet, because no one can trace back exactly where each of the materials comes from,” said Wernink. “But by making this phone, at least, we can start making that possible.”

Right now, the company earns €9 in profit for each phone it sells. All of its income is fully transparent via its website. Beyond working with factories that promote fair working conditions, Fairphone puts aside funds for a worker welfare program. It also addresses e-waste: €3 from the sale of each Fairphone is earmarked for recycling junk phones in Ghana, Rwanda, Cameroon and Uganda, through a partnership with the Dutch recycling organization Closing the Loop.

The aim this year is to sell 100,000 phones, which allow it to remain financially sustainable. Whether or not that happens, Fairphone’s goal has been achieved. “It’s not the aim to dominate the market,” spokesman Fabian Hühne said. “The aim is to inspire other companies and to cooperate with other companies to help them follow our lead.”