Monitoring Corporate Performance

ETI Activities

When they join ETI, our corporate members commit to implementing our Base Code in their supply chains and reporting annually on their progress against a rigorous set of criteria which reflect ETI membership commitments. This tool might be useful to record and manage your own ethical sourcing activities and supply chain information.

Aims of the corporate annual reporting process

The aims of the corporate annual reporting process are to:

For ETI:

• Review progress of individual members and assess continuing membership eligibility
• Review progress of the ETI corporate membership as a whole
• Reinforce members’ commitment to transparency and public accountability
• Document and share good practice.

For individual companies:

• Assist in assessing own progress
• Enable comparison of own performance relative to others
• Enable members to learn from each other’s experience through sharing of reports.

 

Assessment indicators

ETI member companies are required to report in two broad areas:

Management:

Their management of ethical trade and their activities to implement the ETI Base Code in their supply chains, i.e. the member company’s own actions over which it has direct control. It is the effort the company has put in; which can be broken down into inputs (such as the number of people working on ethical trade); processes (the methods employed); and outputs (such as the number of suppliers monitored). As a short hand we have termed this “management”.

One might expect to see steady and continuous improvement in this area from all members, since this is dependent principally on their level of activity and commitment, irrespective of the nature and location of their supply chain.

Performance:

The resulting performance is the improvement in labour standards in the company’s supply chain. Whilst the company’s policies and activities (their “management”) will influence this, companies do not have direct control. The ETI Base Code is the yardstick to measure the results of the company’s efforts. Improved compliance with the code (such as good standards regarding working hours) and improvements which have been made as a result of new initiatives (such as the number of suppliers that have entered into collective bargaining arrangements with an independent trade union) are useful measures of impacts. As a short hand we have termed this “performance”.

Whilst it is the ETI’s (and member companies’) overall objective to improve this performance, all recognise that this is difficult and complex. The overall level of improvement will depend on many factors other than the company’s own efforts such as the nature of the market for the product and the political, social and economic conditions in the areas where it is produced.

 

Feedback and review

Each reporting company is given detailed feedback on their performance relative to other member companies and to their previous performance. Follow-up meetings are arranged with a senior representative of the company to agree steps that need to be taken to improve performance, and identify ways in which ETI can support them in this process.

 

Sharing of reports

At present, member companies are not required to make their reports publicly available. However, as part of their ETI commitments, they are required to share them with other ETI members including competitors, trade unions and NGOs.

 

How is your company doing?

Why not try out our new ethical trade self-assessment tool? Look at the form attached and find out whether you are a beginner, an improver, an achiever or a leader in the ethical trade field. We use this tool to help categorise our member companies' performance and it is also a quick checklist. Let us know what you think - we'd appreciate your suggestions on how the tool can be improved.

ETI Self-Assessment Tool workbook [MS-Excel, 56kb]

Contact: dan@eti.org.uk.

 

See also:

• ETI Corporate Annual Reporting Guidelines and Template for year end 2006
   
• ETI Corporate Annual Reporting Guidelines and Template for year end 2005
• ETI Corporate Annual Reporting Guidelines and Template for year end 2004
• Enforcing Membership Obligations: Corporate Members
• ETI Alleged Code Violation Investigation Guidelines
   
• Annual Reports - in particular see:
  • Pages 17-21 of ETI Annual Report 2003/2004 "Putting ethics to work"
  • Pages 23-26 of ETI Annual Report 2002/2003 "Harnessing difference"
     
• Case study:
  • Draft Report: Addressing labour rights violations at Tarrant, Ajalpan, Mexico using the Ethical Trading Initiative’s complaints procedure [PDF 98kb]
  • Informe Borrador: Atención a las violaciones de los derechos laborales en Tarrant Ajalpan, México mediante el procedimiento de quejas de la Iniciativa de Comercio Ético [PDF 97kb] (annex 5 added June 26)
     
• About ETI: How to join: Companies
   
• ETI Library: Key Documents: ETI Base Code