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Get started on ethical trade

Fire buckets, India

Getting started...

Ethical trade is a complex area and taking the first steps towards building a credible ethical trade strategy can seem daunting. This section provides some initial pointers and shows you where to obtain more in-depth information.

The first step for companies starting out in ethical trade should be to adopt a code of labour practice that includes all the relevant standards of the International Labour Organisation, such as the ETI Base Code. It's then important to develop a system for assessing suppliers against the ETI Base Code, identifying areas that need improvement and putting in place an effective system for follow-up.

The seven "C"s of ethical sourcing

Derived from the principles of ETI membership, these seven points represent the key elements that make up a credible ethical trade strategy, based on our experience.

Commitment. Your company needs to demonstrate that it is paying more than lip service to ethical trade. How much money it spends on ethical trade and how many staff work on it are key signs of real commitment.

Checks in place. Knowing what's happening on the ground is a key step for companies towards behaving responsibly. If you don't know what and where the problems are, how will you be able to fix them? Your company must have a credible system for assessing workers' conditions.

Corrective action. It's not enough to simply find out where the problems are. You'll need to agree with your suppliers what improvements to workers' conditions are necessary and when they should be made, and work out how you are going to make sure agreed improvements happen.

Capacity building. Staff and suppliers need adequate training and support.

Core business. Integrating ethical trade policies into core business decisions - like the prices paid to suppliers, and the lead times given to them to complete orders - is key to achieving widespread change for workers. This is one of the biggest challenges of ethical trade.

Communication. You'll need to spend a lot of time persuading staff and suppliers why ethical trade is so important. It's also important to think about how to report publicly about what you're doing. Companies that have been open about where the problems are in their supply chain have won respect from their critics.

Collaboration. The only way to really make a difference is by working with other companies, as well as with organisations that either represent and/or have specialised knowledge of workers' issues, such as trade unions and charities for example.

...and going further...

Companies that have already built a credible monitoring system need to look at how they can support their suppliers to make workplace improvements and to start integrating ethical trade into their core business practices. Below are some pointers to help you get started on tackling this critical issue.

Five top tips for buyers

Know your suppliers. Cut out the middle man and where possible, develop long-term, direct relationships with your suppliers. This will help you build the trust and leverage you need to help make sustained improvements to workers’ conditions.

Incentivise your suppliers. Make sure compliance with labour standards is built into your contracts with suppliers, so they know you mean business. Reward them for their efforts by giving repeat orders.

'Think worker’. Think about the impact of your decisions on workers, and make sure you include ethical criteria alongside cost and quality when selecting suppliers.

Improve production planning. Deciding to change an entire line of t-shirts from pink to blue when production has already started can mean workers are forced to work excessive hours to complete orders on time. Give suppliers clear and predictable lead times, making it easier for them to ensure their employees work reasonable hours.

Look at the price you pay your suppliers. At the very least, make sure that it allows your suppliers to pay their workers a wage that they can afford to live on.

Why not enroll on an introductory training course?

Our training programme aims to help companies and other organisations involved in ethical trade to build the necessary skills and understanding to manage, monitor and improve the conditions for workers in global supply chains. The first workshop in the series helps participants build a practical understanding of the key issues and concepts in ethical trade, and sets out the essential building blocks for their ethical trade policy and strategy.