Ethical Trading Initiative

Definition

The Ethical Trading Initiative (ETI) is an alliance of companies, trade unions, and non-governmental organizations that promotes respect for workers' rights around the world. It focuses on improving labor conditions in global supply chains by ensuring that workers are treated fairly, work in safe environments, and have access to their rights. The initiative works towards creating a common framework for ethical trading that helps organizations establish standards for supplier conduct.

5 Must Know Facts For Your Next Test

1. The ETI was established in 1998 in response to increasing concerns about labor practices in global supply chains, particularly after high-profile cases of exploitation were reported.
2. One of the key components of the ETI is the Base Code, which sets out essential labor standards that member companies are encouraged to uphold with their suppliers.
3. The ETI emphasizes collaboration among various stakeholders, including businesses, trade unions, and NGOs, to create systemic change in labor practices worldwide.
4. Member companies of the ETI commit to continuous improvement and accountability in their supply chains by conducting regular assessments and engaging with suppliers.
5. The initiative helps organizations develop training programs and resources to support suppliers in meeting ethical labor standards, enhancing overall compliance and working conditions.

Review Questions

• How does the Ethical Trading Initiative aim to influence labor practices within global supply chains?
  • The Ethical Trading Initiative aims to influence labor practices by providing a framework that sets clear standards for ethical trading through its Base Code. This code outlines essential labor rights that member companies should uphold, such as fair wages, safe working conditions, and the right to join trade unions. By promoting collaboration among businesses, trade unions, and NGOs, the ETI seeks to drive systemic change that ensures workers are treated fairly throughout the supply chain.
• Discuss the role of stakeholder collaboration in the success of the Ethical Trading Initiative's mission.
  • Stakeholder collaboration is crucial for the success of the Ethical Trading Initiative because it brings together diverse perspectives and expertise from businesses, trade unions, and non-governmental organizations. This collaborative approach allows for shared learning, resource allocation, and collective action towards improving labor conditions globally. By working together, stakeholders can effectively address challenges within supply chains and ensure that ethical standards are not just established but also implemented and monitored across industries.
• Evaluate the impact of supply chain transparency on ethical trading initiatives and how it aligns with the goals of the Ethical Trading Initiative.
  • Supply chain transparency significantly impacts ethical trading initiatives by fostering accountability among businesses regarding their sourcing and labor practices. When companies disclose information about their supply chains, it allows consumers and stakeholders to hold them accountable for ethical standards. This transparency aligns with the goals of the Ethical Trading Initiative by encouraging organizations to commit to better labor practices and continuous improvement. As a result, increased transparency can enhance trust between companies and their suppliers while promoting fair treatment of workers throughout global supply chains.

Related terms

Fair Trade: A movement that advocates for better trading conditions and sustainability for producers in developing countries, emphasizing fair compensation and ethical sourcing.

Corporate Social Responsibility (CSR): A business model where companies integrate social and environmental concerns in their operations and interactions with stakeholders.

Supply Chain Transparency: The degree to which a company is open about its supply chain operations, including sourcing, production processes, and labor practices.