Corporate social responsibility: ethical trading
What is ethical trading and how to demonstrate to your customers your commitment to corporate social responsibility.
Ethical trading focuses on protecting workers’ rights across the supply chain. By treating employees, suppliers and their workers fairly, you can show your commitment to corporate social responsibility (CSR).
What is ethical trade?
Ethical trade focuses on how your business buys goods and services. It includes the steps you take to make sure you and your suppliers respect workers' rights. The term ethical trading often implies socially responsible sourcing, which focuses on:
- worker welfare
- agricultural practice
- natural resource conservation
- sustainability
The Ethical Trading Initiative is a leading organisation that supports ethical trade in global supply chains.
Ethical trade and suppliers
Choosing your suppliers carefully is an important part of CSR. For example, using local suppliers can support your community and reduce the environmental impact of your sourcing, logistics and distribution practices.
When choosing suppliers, you should check their:
- employment practices
- health and safety procedures
- environmental policies
Customers are increasingly concerned about how supply chains affect people and the environment. Working with irresponsible suppliers can damage your reputation. Larger organisations often review their suppliers to make sure they meet responsible standards. You could do this too by asking them about their approach to CSR. You should also treat your suppliers fairly, particularly smaller businesses that rely on you. For example, paying on time can make a big difference to them.
Ethical trade and customers
Your customers want to know that your business treats people fairly. To build trust, you can:
- use clear, plain English and explain any key terms or conditions
- be open and honest about your products, services and CSR actions
- deal with problems quickly and take responsibility when things go wrong
In return, customers are more likely to trust you and stay loyal. Listening to feedback can also help you improve your products and services. For more ways to make an impact, see CSR activity ideas for your business.