Ethical trading focuses on protecting workers' rights throughout the supply chain. By treating your employees, your suppliers and their workers fairly and ethically, you can demonstrate corporate social responsibility (CSR).
What is ethical trade?
Ethical trade is about the purchasing practices of your business - and the steps you take to ensure that you and your supplier companies respect workers' rights.
The term ethical trading often implies socially responsible sourcing, which focuses on:
- worker welfare
- agricultural practice
- natural resource conservation
- sustainability
The leading alliance that supports ethical trade in global supply chains is the Ethical Trading Initiative.
Ethical trade and suppliers
Choosing your suppliers carefully can be an important part of your approach to CSR. For example, you might try to use local suppliers as much as possible. This helps you to support your local community and reduces the environmental impact of your sourcing, logistics and distribution practices.
When choosing suppliers, you should also examine their:
- employment practices
- health and safety procedures
- environmental policies
Customers are increasingly concerned about the wider impact of supply chains, for example on the local workforce and environment. Being associated with businesses that abuse the rights of their workers or their local environment can significantly harm your reputation.
Larger organisations often audit their suppliers to ensure that they follow responsible working practices. You could do something similar - simply asking them about their attitudes to CSR might be revealing.
You should also treat your suppliers fairly, particularly smaller businesses that rely on you. For example, on-time payments can make a big difference to them.
Ethical trade and customers
Your customers will want to know that you don't exploit the people who make and sell your products. To reassure them, you could:
- Create brochures in plain English and frankly disclose any 'small print' limitations.
- Be open and honest about your products and services. Tell customers what they want to know, including what steps you take to be socially responsible.
- If something goes wrong, acknowledge the problem and deal with it.
In return, you can expect customers to reward you with theirloyalty. Listening to your consumers can also help you improve the products and services you offer them.
If you're looking for different ways to make an impact, check out these fun and creative CSR activity ideas for your business.
FAQs
Corporate social responsibility (CSR) or corporate social impact is a form of international private business self-regulation which aims to contribute to societal goals of a philanthropic, activist, or charitable nature by engaging in, with, or supporting professional service volunteering through pro bono programs, ...
What are the ethical responsibilities of corporate social responsibility? ›
Having ethical responsibilities means ensuring a business engages in fair business practices across the board—from the supply chain to the boardroom. Companies should treat all employees, stakeholders, and customers ethically with fairness and respect. This type of CSR can also take a lot of different forms.
What are the 4 models of corporate social responsibility? ›
What are the four types of corporate social responsibility? The four main types of CSR are environmental responsibility, ethical responsibility, philanthropic responsibility and economic responsibility.
What are the 4 approaches to corporate social responsibility? ›
In this section we will look at the different approaches a company can take to become socially responsible. These four approaches are obstructive, defensive, accommodating, and proactive.
What is the CSR answer in one sentence? ›
Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.
What is corporate social responsibility quizlet? ›
Corporate Social Responsibility. A manner of doing business that takes into account the economic, social and environmental impact of the company's actions.
What is an example of social responsibility and ethics? ›
Examples of social responsibility in corporations
Changes to company policies to improve or benefit the environment: Companies are holding tree-planting events, minimizing paper waste, switching to energy-saving bulbs, setting up recycling bins and allowing remote work to reduce the negative impact of commuter traffic.
What is the main purpose of corporate social responsibility? ›
Corporate social responsibility programs aim to give structure to a company's efforts to give back to the community, participate in philanthropic causes, and provide positive social value. Businesses increasingly turn to CSR to make a difference and build a positive brand around their company.
What is corporate social responsibility in simple words? ›
Corporate social responsibility (CSR) is a strategy undertaken by companies to not just grow profits, but to take an active and positive social role in the world around them.
What are the three P's of corporate social responsibility? ›
What are the 3 P's? People, planet, profit. These are the basis for social and environmental responsibility by companies, as well as fair and ethical business practices. This all ties back into corporate social responsibility and the pyramid of corporate social responsibility.
It is therefore imperative to be able to identify such activity and we take the view that there are three basic principles which together comprise all CSR activity. These are: Sustainability; • Accountability; • Transparency.
What are the benefits of CSR for companies? ›
The potential benefits of CSR to companies include:
- better brand recognition.
- positive business reputation.
- increased sales and customer loyalty.
- operational costs savings.
- better financial performance.
- greater ability to attract talent and retain staff.
- organisational growth.
- easier access to capital.
Ethical responsibility is concerned with ensuring an organization is operating in a fair and ethical manner. Organizations that embrace ethical responsibility aim to practice ethical behavior through fair treatment of all stakeholders, including leadership, investors, employees, suppliers, and customers.
What are the 4 ethical stances? ›
Four broad categories of ethical theory include deontology, utilitarianism, rights, and virtues.
What is the main objective of CSR activities? ›
CSR addresses various issues like human rights, education, health, and safety. It also covers corporate governance, working conditions, environmental sustainability, and more. Along with economic development, CSR also focuses on social and environmental development (the triple bottom line).
What is its corporate social responsibility? ›
CSR is based on the belief that businesses have a greater duty to society than just providing jobs and making profits. It asks business leaders to consider their decisions' environmental and social impacts in order to reduce harm where possible.
What is the simple definition of social responsibility? ›
Social responsibility is an ethical concept in which a person works and cooperates with other people and organizations for the benefit of the community. Social responsibility from businesses such as providing recycling bins can in turn provide opportunities for people to be socially responsible by recycling.
