FAQ

What is ethical trade?

Ethical trade is about having confidence that the products and services we buy have not been made at the expense of workers in global supply chains enjoying their rights. It encompasses a breadth of international labour rights such as working hours, health and safety, freedom of association and wages. Ethical trade involves companies taking a series of recognised steps to identify problems and improve working conditions, with a focus on continuous improvement over time. The ethical trade movement began in the 1990s when campaigns and media exposés brought attention to the harsh conditions of workers producing clothes, shoes, toys, food and other consumables for multinational companies.

How is this different to fairtrade?

Ethical trade and fairtrade have distinct origins, but their approaches are complementary: both focus on helping make international trade work better for poor and otherwise disadvantaged people. Fairtrade is about better prices, decent working conditions, local sustainability, and fair terms of trade for farmers and workers in the developing world. By requiring companies to pay sustainable prices (which must never fall lower than the market price), fairtrade addresses the injustices of conventional trade, which traditionally discriminates against the poorest, weakest producers. The Fairtrade Foundation is also an NGO member of the Ethical Trading Initiative (ETI).

Is ethical trade just for large companies?

Ethical trade tends to be associated with activities undertaken by large companies to address and improve working conditions in what are often vast and complex supply chains. Although small and medium-sized sourcing companies may not have the resources and leverage of large companies, they still bear a responsibility towards the workers involved in making their products, and can and should seek to source ethically. The fact that smaller companies often have fewer suppliers and closer relationships with them than large companies may actually make it easier for them to get their suppliers to improve. New international frameworks are also defining clear responsibilities for all businesses, large and small. The UN Guiding Principles on Business and Human Rights is a globally-recognised framework which outlines the roles of states and businesses in protecting human rights in business situations. 

Doesn't ethical trade also include environmental sustainability and animal rights?

Promoting environmental sustainability and protecting animal rights may be part of some companies’ corporate social responsibility (CSR) agenda and there are merits in an integrated approach to managing social and environmental impacts. But for ETI, ethical trade is about promoting respect for workers’ rights around the globe. Our strength and expertise lie in bringing together companies, trade unions and NGOs to collectively tackle challenging labour rights issues and drive long-lasting change for workers.

Is ETI a certification scheme?

No. We do not issue any certificates or labels to any company, nor do we accredit auditing companies or individuals as ‘ethical trade' auditors or trainers. We do not carry out audits ourselves. At present, we do not provide information to the public on the ethical performance of individual companies. However, we do provide information on overall trends in performance across our corporate membership.

Does ETI do any public campaigning?

ETI is an alliance of companies, trade unions and NGOs that promotes respect for workers’ rights around the globe. We are not a consumer organisation nor do we run any consumer campaigns. But we take heart when consumers champion workers’ rights. Public campaigns and consumer pressure can play an important role in raising awareness about issues and driving changes in business behaviour. Consumers hold a great deal of power; they can communicate directly to the brands they buy from, telling them what they expect. They can also call for brands to fully engage in ethical trade and communicate their efforts and progress to customers.

Do your member companies use ETI as a protective shield?

We encourage all our member companies to communicate about their ETI membership and what they are doing to improve the lives of workers in their supply chains. However, they must not use their membership as any kind of ‘badge’ or endorsement. We have comprehensive guidelines in place for communicating about ETI membership and we work closely with our members to make sure these are understood and followed. It is not ETI’s role to represent the views of individual members, or indeed the collective view of our corporate members. Our public statements have a clear purpose; to amplify workers’ voices and shine a spotlight on working conditions as part of our efforts to drive long-lasting change.

Isn’t it the job of government to protect workers?

Yes – we believe it is the role of governments to make and enforce laws that protect the rights of workers. This should create the environment in which workers are free to join trade unions and bargain with their employers.

But - the reality for workers is often very far from this ideal. In many countries:

  • law enforcement aimed at protecting workers is weak
  • the environment is hostile to trade union organisation
  • few of the predominantly women workers in the garment and agricultural industries are trade union members.

ETI and our members can play a vital role in helping improve law enforcement, as well as promoting freedom of association for workers through their code implementation activities.

What is the UN Guiding Principles on Business and Human Rights?

The UN Guiding Principles on Business and Human Rights is a globally-recognised framework which outlines the roles of states and businesses in protecting human rights in business situations. The framework recognises the primary role of the state in protecting its citizens and establishing relevant laws. It also outlines business’ responsibility to understand, mitigate and remedy any adverse human rights impacts in supply chains.  While the framework is not legally binding, states are moving towards adopting it and progressive businesses are developing ways to implement it. In September 2013, the UK government launched its action plan on business and human rights, becoming the first country to set out guidance to companies on integrating human rights into their operations.  ETI’s work supports the UN Guiding Principles on Business and Human Rights. We urge businesses to understand it and start putting in place measures that will help them meet its requirements now and in years to come. 

Why should companies bother to join ETI if they don’t get certification?

We are not a certification scheme and make this quite clear to potential members. Companies join ETI because they are serious about improving working conditions and recognise that ETI can support them in that process. By joining ETI, companies become part of a leading community of socially-conscious brands, NGOs and trade unions. Members have access to a wealth of expertise, training, resources and events that keep them at the forefront of developments in ethical trade. We provide new members with mentoring, support and management tools as they develop their ethical trade programmes. We also play the role of strategic partner, providing feedback on progress and a safe space to discuss complex supply chain issues. 

Have you ever refused a company membership?

We advise companies to take time to engage in dialogue with us before submitting a formal application, so they can better understand ETI membership obligations and to give us the opportunity to gauge their commitment to ethical trade. We look at a number of things including company size, as a credible ethical trading programme does need to be adequately resourced. In some cases, after meeting with prospective applicants, we advise them that they are not yet ready to become members and recommend steps to prepare themselves. Once an application is submitted it is formally considered by the ETI Board. Applications may be turned down at this stage if the Board is unconvinced of the applicant’s ability to meet ETI membership obligations and deliver a credible ethical trading programme. 

What is the difference between Foundation stage and full members?

Foundation stage membership is designed for companies that are new ETI members. During this stage, ETI provides members with structured support and direction as they establish the core elements of a credible ethical trading programme. We use our annual reporting mechanism to assess whether Foundation stage members have the right building blocks in place to become full ETI members. However, Foundation stage members have the same rights and obligations as full ETI members. They are expected to engage in member meetings, events and roundtables and encouraged to participate in ETI’s supply chain programmes.

What do you expect of members?

Our member companies adopt the ETI Base Code, which is founded on the conventions of the ILO and is an internationally recognised code of labour practice. This nine point code covers core workers’ rights including health and safety, working hours, freedom of association and a living wage. As well as adopting the Base Code, company members also sign up to ETI's Principles of Implementation, which set out the approaches to ethical trade that member companies should follow. These require companies to: demonstrate a clear commitment to ethical trade; integrate ethical trade into their core business practices; drive year-on-year improvements to working conditions; support suppliers to improve working conditions and report openly and accurately about their activities and achievements. Regular dialogue and formal reporting mechanisms enable ETI to assess and grade company members’ performance.  

Do you grade members and where can I find that on this website?

We are not a certification scheme and make this quite clear to potential members. Companies join ETI because they are serious about improving working conditions and recognise that ETI can support them in that process. By joining ETI, companies become part of a leading community of socially-conscious brands, NGOs and trade unions. Members have access to a wealth of expertise, training, resources and events that keep them at the forefront of developments in ethical trade. We provide new members with mentoring, support and management tools as they develop their ethical trade programmes. We also play the role of strategic partner, providing feedback on progress and a safe space to discuss complex supply chain issues. 

How do you hold companies to account?

Although ETI is not a regulatory body, companies that join us commit to adopting credible and effective strategies to improve conditions in their supply chains. Our company members report to us annually on their progress in addressing working conditions in their supply chains and on their overall ethical trade performance. On occasion, full members will be reverted to Foundation stage if we have concerns over the level and pace of their progress, and if it is deemed that they need further support and guidance. If a company persistently fails to address concerns raised over its performance, we invoke our disciplinary procedure. This procedure is solutions-focused, and appropriate steps are taken to secure an improvement in the member’s commitment. The options are that a company either improves its performance, resigns or their membership is terminated.   

Where can I buy ETI-certified products?

ETI does not certify any products. Our approach is to mainstream respect for workers' rights into the day-to-day behaviour of buying companies, in a way that achieves widespread, incremental improvements to workers' conditions in their supply chains. Our focus is on determining what steps companies should take to do this, rather than on making claims about any of their products.

Are ETI members 'ethical'?

We often get asked if our member companies get some kind of endorsement or ‘badge of approval' from ETI because they are members. Being a member of ETI does not necessarily mean that workers' rights are fully protected throughout their supply chain, and we are careful not to send out this message - in today's globalised economy, all buying companies have issues in their supply chains. ETI membership demonstrates a company has acknowledged that these issues exist, and has made a serious commitment to tackling them. 

Is it more ethical to just buy expensive clothes and avoid low-cost high street brands?

Retailers must pay suppliers a price that allows them to pay workers a wage they can afford to live on, and there is clearly a level at which low prices are likely to negatively impact on workers. But it would be too simplistic to say all cheap clothes are necessarily ‘bad for workers', just as it would be to say that more expensive clothes are ‘good for workers'. A low cost high street retailer that sells large quantities of stock may well have strong relationships with their suppliers and have worked with them to raise working conditions. It is also worth noting that embellished work on both inexpensive and expensive garments can be from the hand of the same highly skilled artisan. Much of this sourcing information is not in the public domain, which can pose challenges for consumers wanting to shop ethically. But we encourage consumers to engage with their favourite brands and ask them what they are doing to improve working conditions in their supply chains. 

Should I boycott retailers with poor reputations?

There is some evidence to suggest that boycotts can help change company behaviour. However, there is a danger that boycotting may actually make the situation worse for workers. For example, if a factory or farm loses orders as a result of a consumer boycott, they may end up making people redundant. There are many countries where the state doesn't provide adequate welfare protection for the unemployed, so one person being laid off from work can mean a whole family is thrown into poverty. Often if you ask workers' representatives, they will ask that people carry on buying products from their countries, because first and foremost they want to keep their jobs.

What sanctions do members face when they discover a labour rights issue in their supply chain?

ETI is not a regulatory body and nor do we sanction a company member if they discover labour rights issues in their supply chain. However, we take seriously any infringement of the ETI Base Code. We expect our members to respond constructively to allegations and investigate them, as a matter of good practice. If the allegations are proved correct, the company should put in place an urgent plan of action to remedy the situation. We expect our members to engage with ETI and keep us informed throughout, drawing on our support where needed. We also have a disciplinary procedure to ensure that corrective action is taken, if a member is in serious breach of its membership commitments.

I only want to buy from your best performing members. Can you provide me with the list?

When a company joins ETI, they adopt our Base Code of labour practice, and commit to implementing this within their supply chain. We acknowledge that this is a challenging ask, and that members will encounter complex problems and issues along the way. We look for continuous improvement over time in members’ ethical trade performance, monitoring this performance through our standard annual reporting and strategic reporting mechanisms. We do grade members’ efforts against our Principles of Implementation and this grade reflects their level of progress. However, at present these ratings are not publicly available as they are intended to provide constructive feedback to members, helping them improve and increase their work on ethical trade. 

What can I do to get retailers and brands to be more ethical?

There is a lot you can do to let retailers and brands know about your concerns. The more questions we all ask, the more likely retailers will be to listen - and act. You can:

  • check which companies are members of ETI - they have made serious commitments to ethical trade and their activities are scrutinised by ETI's trade union and NGO members.
  • join a campaign for better conditions in supply chains.
  • ask searching questions - write to CEOs and ask if their company is committed to ethical trade.

I am a student doing a project on ethical trade. Could I interview someone at ETI?

It is positive that so many students are interested in carrying out research into ethical trade. Unfortunately, given our limited resources we are unable to provide individual interviews to students. However you should be able to find a great deal of information on our website, which we hope will help in answering your questions. In particular, take a look at the FAQs and Key ETI resources sections.    

I've been asked to get an audit of the ETI Base Code - what is it?

The ETI Base Code is a generic code of labour practice and is internationally recognised as a model code. All ETI member companies and many other retailers and brands have adopted the Base Code and have committed to making sure their suppliers work towards it over time. Companies either adopt it word-for-word, or incorporate it into their own company codes.

As part of their commitment to ethical trade, buying companies need to find out what working conditions are like in their supply chains, so they can identify any potential issues that need  resolving. Campaigning organisations and increasingly, concerned consumers, also ask that companies assess their suppliers. ETI member companies - and many others - inspect significant numbers of their suppliers against the ETI Base Code every year. View the ETI Base Code

How do I arrange the audit?

We don't carry out audits against the ETI Base Code ourselves, as that's not our role as an organisation. However, many private certification and auditing companies have experience of carrying out audits against the Base Code, and some of them have staff around the world. Below are some of the ones we know about:

Please note that ETI does not endorse any of these organisations.

As the quality of audit firms and individual auditors varies tremendously, some tips on making sure you get accurate results are:

  • Ask that the audit is carried out by local staff with appropriate language skills and cultural knowledge.
  • Make sure the audit team has a gender balance that matches that of your workforce.
  • Make sure the auditors carry out confidential interviews with workers.
  • Ask for experienced auditors.
  • Ask that auditors give a narrative account, rather than just ticking boxes.

You may also find a local non-governmental organisation in your area that has relevant skills and could either carry out, or participate in an audit.

What can I do to make sure I pass the audit?

We expect our corporate members to use audits as a way of diagnosing problems, not as a ‘pass or fail' test. In fact, it's very rare to find any company that's fully compliant with the Base Code.

If you supply an ETI member company, you should expect them to help you make any necessary improvements within a timeframe that works for both of you. ETI member companies should not stop trading with you if the audit uncovers only minor issues. However, if they uncover very serious issues, you will be expected to take immediate corrective action. If you do not do so, you may lose the business.

Will I get a certificate to say I've passed?

After being audited, it is possible that you will receive a certificate of compliance with the ETI Base Code from the auditing company. You should be aware that ETI does not formally endorse any certificate that claims that a company is ‘compliant with ETI' or ‘compliant with the ETI Base Code'. We do not endorse any companies who carry out workplace audits, as we are not an accreditation body.

So how will I benefit from an audit?

As well as keeping customers happy, many suppliers who have invested the time and resources in improving conditions for their workers have found that their efforts have brought them business benefits, including:

  • Boosting morale
  • Reducing absenteeism
  • Improving employee retention
  • Increasing productivity
  • Increasing profitability

It's also likely that as retailers and brands respond to increasing concern among Western consumers about workers' rights in supply chains, more and more of your customers will start asking you to comply with the ETI Base Code. So making the effort now should stand you in good stead for the future. 

Why do I have to go through so many audits?

Life would be much easier if one audit was acceptable for all! There are many reasons why buying companies like to do their own audits. These include:

  • There is no single internationally agreed code of labour practice. Although many companies - particularly those in the UK - follow the ETI Base Code, some follow other codes that have been developed by different ‘labour standards initiatives'.
  • Even where companies are auditing against the Base Code they often tag these audits on to quality and environmental audits.
  • Audit methodologies are by no means 100% reliable - we often hear of cases where a supplier may be found compliant in one area by one buying company, while another will find  them non-compliant. Buying companies often don't trust other peoples' audit reports for that reason.

Can I join ETI?

ETI focuses on the responsibilities of companies that outsource their production to other companies, and so do not directly employ the workers involved in making their products. The challenges we tackle include questions such as ‘How can a buying company make sure its buying practices (such as lead times, price negotiations) don't impinge on its suppliers' ability to provide decent conditions for their workers?' and ‘How can a company persuade a supplier to improve conditions if it only takes a small proportion of its production?' For this reason, membership is most relevant for companies that outsource a significant proportion of their production.

I'm an auditor - how do I get ETI accreditation?

Unlike other organisations, we do not have a formal system for registering or accrediting auditing companies for doing inspections against the ETI Base Code, nor do we carry out audits ourselves. That means in principle there is nothing to stop any third company carrying out an audit of a supplier against the ETI Base Code, but we strongly recommend that they can offer an audit team that has the necessary skills to obtain accurate information about workers' conditions. It's worth noting that in our experience, carrying out audits of working conditions requires very different skills to those required for other types of audits - for example, financial, environmental or quality audits.

Isn't ethical trade just for large companies?

Ethical trade tends to be associated with activities undertaken by multinational companies to address and improve working conditions in what are often vast and complex supply chains. Although small and medium-sized sourcing companies may not have the resources and leverage of large multinationals, we believe they still bear a responsibility towards the workers involved in making their products, and can and should seek to source ethically. And the fact that smaller companies often have far fewer suppliers and closer relationships with them than large companies may actually make it easier for them to get their suppliers to improve.

Why should I source ethically?

There are lots of reasons why it makes good business sense to source ethically. For example, some companies have found that the increased communication with suppliers entailed in implementing an ethical sourcing strategy can help build trust among suppliers and so increase efficiency in their supply chain. Larger public companies can also attract investment, as ethically motivated investors grow in number.

For many small businesses, the primary business motivation for sourcing ethically is as a source of market differentiation with their customers. There are many signs that ‘conscientious consumers' are growing in number, prompting many small companies to market themselves and/or their products as ‘ethical' or ‘fairly traded'.

If you are thinking of doing this, it is important that you are very clear about what statements you make to consumers. Be careful not to make claims that cannot be backed up by evidence, as you could be criticised for misleading your customers.

How you prioritise your efforts will depend on the size of your business, how much experience you already have, what industry you are in and how complex your supply chain is. As a rule of thumb, any company starting out in ethical trade, whatever its size, should at least:

  • develop a code of labour practice based on all the relevant conventions of the International Labour Organisation (we encourage companies to adopt the ETI Base Code);
  • get management and staff buy-in;
  • make sure you have adequate skills and resources for the job;
  • find out as much as possible about your suppliers and assess conditions in their workplaces;
  • communicate regularly with your suppliers and work with them to make sure they improve over time; and
  • make sure your buying practices (eg, lead times, pricing) don't constrain suppliers' ability to comply with your code.

Where can I find a list of ‘approved' manufacturers?

We are often asked if we can provide a list of ‘ethical' or ‘ETI-approved' manufacturers/producers. Unfortunately, ethical trade is more complex than that! For a start, it is difficult enough to find any lists of manufacturers, as buying companies tend not to reveal the identity of their suppliers. This is something we encourage though and recently several large companies - notably Nike, Levi Strauss & Co., Puma and others have revealed the names and contact details of their top level suppliers on their websites.

Here are some suggestions on different approaches to finding suppliers:

No initial ‘ethical' screening

It is perfectly valid to choose your supplier solely on the basis of commercial criteria, then work with them to help them resolve any issues over time. You may well have more positive impact with suppliers who may not be perfect but are willing to improve, than with those who are already doing well.

Look for trade union membership

If you do want to check suppliers before you start sourcing from them, as a simple rule of thumb you could find out if any potential suppliers have a unionised workforce, as this should at least mean that workers have the space to bargain for their rights with management.

Look for certification by or membership of other social responsibility organisations

Note that even if a supplier has gained a certificate, this is not a foolproof guarantee that they will continue to be compliant in the future. Supplier companies can be very adept at hiding problems and while certification can give you an indication, you need to be satisfied yourself as to the situation at a potential supplier.

So what can I do to get information on my suppliers' labour practices?

If you have the resources, it makes sense to visit the supplier in person and inspect the workplace/s yourself. The ETI Workbook provides detailed information about how to get accurate information during inspections, including suggestions on what questions to ask workers and managers, what records to check and so on. If you are able to make a personal visit, you also need to work out how you are going to follow up on any issues you uncover.

If your business is very small and you do not have the resources to carry out in-depth inspections of the workplace/s concerned, here are a few suggestions on how you can get information:

  • Send the supplier a copy of the ETI Base Code.
  • Ask them whether they have seen a code of labour practice before, and if so, what are their views about it and what are they doing to comply with it. Sometimes asking just a few well-chosen questions will give you a good indication about the suppliers' attitude.
  • Ask your supplier whether they have been audited for their labour practices and if they have, ask them who carried it out and if you can see a copy. If they appear happy to share information, this is one indication that they will be willing to improve.
  • Stay in regular communication with your supplier. Ethical trade is not a one-off activity.
  • Find out what you can about local conditions to try and build up a picture of what the national laws are and whether they are enforced, and what the main risks of labour abuses are.
  • If you can, find out who your suppliers' other customers are. If they include any of ETI's members, it's worth contacting the company/ies concerned to see if you can share information and/or pool resources.

Can I join ETI?

We welcome enquiries about membership from any company, whatever their size or type of business. However, small companies may find it difficult to devote sufficient time and resources to fulfilling the commitments that ETI membership entails. For example, corporate members must provide detailed annual reports to ETI and participate actively in our programmes. Find out more about joining ETI here.