Retailers continue to come under fire over ethical trade issues. Here, we outline how stores can ensure they stay out of trouble
What’s the problem?
Most multiple retailers are committed to ethical trading, but retailers – most recently Gap and Levi’s – still suffer bad press for alleged failure to meet ethical trading standards.
What happens if retailers’ ethical trading is compromised?
According to the Ethical Trading Institute (ETI), retailers that have responded swiftly and responsibly to crises when they occur have won the respect of some of the organisations that were their harshest critics. They’ve also benefited as businesses from developing the closer relationships with suppliers that are required to trade more ethically.
What can retailers do to ensure best practice?
The ETI says there are seven points retailers should take action on:
➤ Be committed Sign up to the ETI Base Code. To demonstrate that this is more than just lip service, make sure there is a board level champion of ethical trade as well as enough financial and HR staff to implement the strategy.
➤ Put checks in place Knowing what’s happening on the ground is key. Map the supply chain, work out where the greatest risks are likely to be, then develop a schedule of workplace audits.
➤ Take corrective action Audits need to be followed up. Stores need to agree with suppliers what improvements to workers’ conditions are necessary and when they should be made, then follow up.
➤ Build skills and systems Some suppliers simply don’t understand the basics of good management, which includes having proper HR systems, grievance procedures for workers, and so on. Equally, ethical trade and buying teams may need training to help them develop new skills.
➤ Integrate policy Integrating ethical trade policies into core business decisions, such as the prices paid to suppliers and the lead times, is key to achieving widespread change for workers.
➤ Communicate Retailers need to invest time in persuading staff and suppliers why ethical trade is so important. There are increasing numbers of retailers and suppliers whose improvements to working conditions have brought both ethical and business dividends. It’s also important to report publicly about action being taken.
➤ Collaborate Many issues – for example, low wages – can’t be effectively tackled by individual companies working alone. ETI brings together a range of organisations, including more than 50 retailers and suppliers as well as trade unions and specialist voluntary organisations, so is able to create the critical mass needed to drive systemic change.