How to get colleagues and suppliers to support ethical trade

ETI members have found that the most powerful tool for persuading senior management, staff and suppliers to take ethical trade seriously, is to set out the business benefits as well as the moral imperative.

The business benefits of ethical trade

ETI corporate members are finding that taking ethical trade seriously is helping them realise commercial objectives. Ethical trade can help your company:

Improve supply chain efficiency. Some companies report that the close working relationships developed with their suppliers to implement their ethical trade strategies helps build mutual trust and, in turn, greater efficiency and less disruption in the supply chain. Some are seeing product quality improve too.

Protect your company's reputation. Campaigning around workers' conditions in global supply chains is growing. Taking ethical trade seriously can help manage reputation risk and therefore protect the value of your brand.

We're in a world where a company's reputation can be damaged very quickly through the click of a mouse. Those that think they can operate in some quiet backwater without anything coming back to hurt them are being very, very naïve.

Brendan Barber, General Secretary, UK Trades Union Congress

Protect and increase sales. Media exposés and campaigns around working conditions in supply chains are on the increase, as are consumer boycotts - with nearly half of shoppers polled in a 2009 AccountAbility survey stated that they would boycott a product even if there was no other choice.

There is also growing evidence that consumers are prepared to reward companies for better ethical performance. For example, according to a poll of 7,000 consumers carried out by TNS Worldpanel, 72% of British consumers think that 'ethical production' of the clothes they buy is important - up sharply from 59% in 2007.

The TNS survey also revealed that in 2007, 60% of under-25s said they bought the clothes they wanted and didn't care how their clothes were produced. In 2008, only 36% said they do this.

Increase access to capital. Both socially responsible and mainstream investors look at how companies handle supply chain risks as a measure of the overall quality of their management and their approach to managing risk.

Motivate employees. Studies have provided evidence that graduates select employers as much on their values as on the generosity of their salaries, and that staff motivation and retention is influenced by a company's commitment to corporate social responsibility.

Build support for ethical trade in your own company

ETI members are using a range of different tools to build support for ethical trade within their own companies, as well as within their supply base. Approaches include:

• Shock tactics. A combination of alarming statistics, shocking pictures, film footage and news stories that depict just how bad conditions for workers can get, all help commercial staff to empathise with workers, as well as demonstrating reputation risks.
• Case studies. For example, members of our Purchasing Practices Project are generating case studies about the negative business impacts of ignoring workers' rights, and of the benefits of taking ethical trade seriously.
• Evidence of consumer interest. Statistics about growing consumer interest in ethical issues are produced regularly by the Co-operative Bank and others.

Build support for ethical trade in your supply base

Although suppliers are often sceptical about ethical trade, they can also benefit from providing decent conditions for their workers. For example, creating an environment where people like to work can help reduce absenteeism and staff turnover. Improving working conditions can also help increase productivity:

Even though we reduced working hours by 20 or 30 percent, we found that productivity had actually increased, rather than decreased.

Mr He Guang Hu, General Manager, Ghanzhou Wonderful Garments Co. Ltd, China.

ETI members use a variety of techniques for building support for ethical trade within their supply base, including awareness-raising conferences, encouraging peer-to-peer learning, and providing practical help to improve management systems.

Useful links

The Co-operative/AccountAbility (2009), What assures consumers in an economic downturn?
The Work Foundation (2004), Achieving high performance: CSR at the heart of business