Ethical trading initiative

Definition

The Ethical Trading Initiative (ETI) is a non-profit organization that promotes and supports ethical trade practices across global supply chains. It aims to improve the working conditions of workers in these supply chains by providing a framework for companies to ensure fair labor practices and responsible sourcing. By engaging companies, trade unions, and NGOs, the ETI facilitates collaboration to address issues such as child labor, discrimination, and unsafe working environments.

5 Must Know Facts For Your Next Test

1. The Ethical Trading Initiative was founded in 1998 and has grown to include over 100 member organizations from various sectors worldwide.
2. ETI's Base Code outlines key labor standards, emphasizing the importance of no child labor, no forced labor, health and safety provisions, and fair wages.
3. The initiative encourages continuous improvement by members through regular assessments, audits, and training programs aimed at enhancing ethical sourcing practices.
4. Membership in the ETI signifies a commitment by companies to ethical trading principles, which can enhance their brand reputation and consumer trust.
5. The ETI works collaboratively with organizations like trade unions and NGOs to address systemic issues in supply chains that affect workers' rights.

Review Questions

• How does the Ethical Trading Initiative facilitate collaboration among different stakeholders to promote ethical sourcing?
  • The Ethical Trading Initiative brings together companies, trade unions, and non-governmental organizations (NGOs) to create a shared understanding of ethical sourcing challenges. By collaborating on initiatives like capacity building, stakeholder engagement, and awareness campaigns, these groups work together to address key issues such as worker exploitation and unsafe working conditions. This collaborative approach enables diverse perspectives to contribute to solutions that improve labor practices across supply chains.
• What role does the ETI Base Code play in shaping ethical trading practices among its members?
  • The ETI Base Code serves as a foundational guideline for member organizations to adhere to ethical labor standards in their supply chains. It outlines essential principles such as no child labor, no forced labor, and ensuring safe working conditions. By committing to this code, members are expected to evaluate their supply chains continuously and implement policies that promote fairness and safety for workers. This ensures that ethical trading is not just an ideal but a measurable practice within organizations.
• Evaluate the impact of the Ethical Trading Initiative on global supply chains regarding fair labor practices and corporate accountability.
  • The Ethical Trading Initiative has significantly influenced global supply chains by establishing standards that promote fair labor practices and greater corporate accountability. By encouraging companies to adopt ethical sourcing policies and engage in transparent reporting, the ETI has fostered an environment where worker rights are prioritized. This shift has not only improved working conditions but also pressured companies to take responsibility for their supply chain impacts, leading to a more equitable global trade system that values human dignity alongside profit.

Related terms

Fair Trade:

Fair Trade is a social movement aimed at helping producers in developing countries achieve better trading conditions and promote sustainability, ensuring that workers receive fair wages and work in safe conditions.

Supply Chain Transparency: Supply Chain Transparency refers to the extent to which a company openly shares information about its supply chain operations, including sourcing, labor practices, and environmental impact, allowing consumers and stakeholders to make informed decisions.

Corporate Social Responsibility (CSR): Corporate Social Responsibility (CSR) involves companies taking accountability for their impact on society and the environment, committing to ethical practices that benefit stakeholders, including employees, communities, and the planet.