Top 10: Ethical Labour Practices
Organisations big and small are striving to build fair, sustainable and responsible global supply chain networks.
From fair wages to community involvement, ethical labour practices reflect an approach to business that values people and the planet alongside profits.
Modern consumers and stakeholders expect more than high-quality products. These days, they are also seeking transparency, fairness and a dedication to human dignity throughout the production process.
Companies that adopt these ethical standards stand to become more competitive, resilient and appealing to both customers and top talent.
Here, Supply Chain Digital takes a look at the top 10 ethical labour practices being employed in supply chains.
10. Community engagement
Key company: Patagonia
CEO: Ryan Gellert
Director of Environmental Action: Beth Thoren
Community engagement involves collaborating with and involving local populations in decision-making, policy creation and implementation to build trust, strengthen relationships and empower communities.
By supporting the areas where suppliers operate through investment in education and healthcare, while also respecting indigenous rights and cultures, companies can make a truly meaningful impact.
Patagonia exemplifies this commitment by extending support beyond its immediate workforce to positively influence communities throughout its supply chain.
Back in 2002, the company's founder, Yvon Chouinard, co-founded 1% for the Planet, a coalition of businesses pledging 1% of their sales to environmental causes.
It has continued to expand, to the point that it now includes thousands of member companies which contribute millions of dollars to environmental conservation efforts.
9. Freedom of association
Key company: H&M
CEO: Daniel Ervér
Director of Sustainability: Leyla Ertur
Freedom of association empowers workers to form or join trade unions of their choice and engage in collective bargaining with employers. This enables them to voice their concerns, negotiate working conditions and protect their interests without fear of interference or discrimination.
Freedom of association is particularly crucial in the realms of empowerment, working conditions, conflict resolution and compliance.
H&M is among those to uphold workers' rights to form and join unions, promoting collective bargaining within its supply chain.
The retailer reports that a significant majority (84%) of its supplier factories in Bangladesh have democratically-elected worker representatives, reflecting its commitment to empowerment.
"We believe brands should be accountable for their value chain," says Leyla Ertur, Head of Sustainability at H&M Group. "Industry-wide transparency commitments will drive real, positive change and, ultimately, a more sustainable fashion industry."
8. Employee and supplier development
Company: Unilever
CEO: Hein Schumacher
Chief Sustainability Officer: Rebecca Marmot
In the context of ethical labour practices in supply chain, development refers to initiatives aimed at improving the skills, knowledge and opportunities available to directly-employed workers as well as those upstream.
Individuals stand to benefit from enhanced skills, advancements to their career prospects, more sustainable livelihoods and all-round empowerment.
Unilever's Enhancing Livelihoods programme serves as a prime example. Overall, the corporation has assisted more than 2.5 million smallholder farmers in improving their agricultural practices, resulting in higher yields and income.
In addition to improving workers' quality of life, this commitment ensures a more stable supply chain and aligns with the broader objectives of ethical supply chain management, such as sustainability and fostering positive social impact.
7. Fair remuneration
Company: IKEA
CEO: Jesper Brodin
Chief Sustainability Officer: Karen Pflug
Companies committed to fair compensation look beyond legal minimum wage requirements. They consider more nuanced factors like local economic conditions, living costs, and family needs when determining appropriate pay scales.
Paying fair wages also has significant societal benefits. By reducing financial stress, such compensation improves workers' overall wellbeing and contributes to broader economic stability and poverty reduction.
IKEA exemplifies this approach through its comprehensive wage strategy. The company's Responsible Wage Practices Framework extends throughout its global supply chain, ensuring workers receive wages that reflect local economic realities.
Through this holistic approach, IKEA has achieved meaningful impact: more than 600,000 workers in its supply chain have received wage increases, reflecting a philosophy rooted in creating an inclusive system that supports workers and their families.
6. Non-discrimination and equal opportunity
Key company: Nike
CEO: Elliott Hill
Chief Sustainability Officer: Noel Kinder
Non-discrimination and equal opportunity represent core principles of ethical labour practices. They ensure workers are evaluated based on their professional capabilities and contributions, rather than being judged by personal characteristics unrelated to job performance.
Nike demonstrates a robust commitment to these ideals through its comprehensive approach to workplace equality. Its Code of Conduct provides explicit protections against discrimination, prohibiting unfair treatment based on race, gender, age or other protected characteristics.
This commitment is more than theoretical, with women now comprising more than half (51%) of Nike's global workforce.
By embracing diversity and inclusion, organisations like Nike unlock significant strategic advantages. Such approaches create more dynamic work environments, tap into broader talent pools and reflect a progressive understanding of human potential.
5. Training
Key company: Nestlé
CEO: Mark Schneider
Vice President Global Head of ESG Engagement: Rob Cameron
While similar and interconnected, training and the aforementioned area of development serve differing purposes in professional growth.
Whereas development represents a broader, long-term approach to enhancing an individual's professional capabilities, training focuses on providing more immediate, job-specific skills and knowledge
Inevitably, training is often a stepping stone to broader development, but the former plays a critical role in workplace effectiveness – particularly in areas like health and safety.
The Nestlé Cocoa Plan, for example, is an exemplary illustration of strategic training's transformative potential. No fewer than 150,000 cocoa farmers have been equipped with advanced agricultural techniques, resulting in crop yield improvements of up to 40%.
4. Elimination of child and forced labour
Key company: Apple
CEO: Tim Cook
Vice President of Environment, Policy and Social Initiatives: Lisa Jackson
Apple is among those to have demonstrated a robust commitment to ethical supply chain management through its comprehensive supplier assessment programme.
In 2020, the company conducted an extensive review, completing 1,121 supplier assessments that covered 94% of its total spending.
Apple's approach to eliminating child and forced labour is uncompromising. With a zero-tolerance policy, the tech giant has taken decisive action, terminating relationships with 20 suppliers found to have committed serious human rights violations.
This stringent approach stretches beyond mere compliance, actively safeguarding worker dignity and human rights across its global supply chain.
By prioritising the elimination of child and forced labour, companies like Apple contribute to broader social transformation, challenging exploitative practices and promoting more ethical, sustainable global business models that respect fundamental human rights.
3. Transparency and accountability
Key company: Adidas
CEO: Bjørn Gulden
SVP Sustainability: Katja Schreiber
Incorporating transparency and accountability in supply chains undoubtedly represents a critical approach to ethical business practices.
It involves openly sharing detailed information about suppliers, working conditions and labour practices, while simultaneously taking meaningful responsibility for addressing any identified issues.
For modern businesses, this approach is essential. By embracing transparency, companies can build trust with consumers, investors and other stakeholders. It enables more effective risk identification, creates motivation for continuous improvement and facilitates collaboration with external organisations committed to workers' rights.
Adidas is something of a trailblazer in this space. Every year, the sportwear powerhouse publishes a comprehensive list of its direct suppliers, covering 99% of global production volume. This unprecedented level of openness allows stakeholders to independently verify ethical standards and practices.
The benefits of such transparency are tangible. Adidas has demonstrated that open communication can drive meaningful change, with 80% of reported labour issues being resolved within just 30 days. It's an approach that transforms transparency from a theoretical concept into a practical tool for improving working conditions and resolving workplace challenges.
2. Ethical sourcing
Company: Starbucks
CEO: Brian Niccol
Outgoing Chief Sustainability Officer: Michael Kobori
Incoming Chief Sustainability Officer: Marika McCauley Sine
Ethical sourcing represents a holistic approach to procurement that prioritises human rights, worker welfare and environmental responsibility.
This comprehensive strategy goes beyond traditional purchasing practices by ensuring products and materials are obtained through methods that respect workers' fundamental rights, provide safe working conditions and minimise ecological impact.
Starbucks can be considered a prominent example of ethical sourcing excellence through its C.A.F.E. (Coffee and Farmer Equity) Practices programme. The initiative covers 99% of the company's coffee sourcing, directly impacting more than 400,000 farmers across 30 countries.
By embedding social and environmental considerations into its procurement process, Starbucks has created a model of responsible business practice.
Moreover, the organisation's commitment extends far beyond compliance. With a clear goal to ethically source 100% of its coffee by 2025, verified by independent third-party auditors, Starbucks is transforming its supply chain. This approach encompasses not just coffee, but also tea, cocoa and manufactured goods, demonstrating a dedication to ethical procurement.
1. Fair working conditions
Company: Marks & Spencer (M&S)
CEO: Stuart Machin
Head of Sustainability: Lucinda Langton
British retail institution Marks & Spencer (M&S) has established a comprehensive approach to ensuring fair working conditions through its Global Sourcing Principles and Human Rights Policy. Having these guidelines in places drives the active pursuit of meaningful improvements across the company's entire supply chain.
A key initiative is the Ethical Model Factory programme, which represents an innovative strategy for transforming workplace environments. In Bangladesh, for instance, M&S achieved a remarkable 42% reduction in working hours while maintaining worker wages, significantly enhancing employees' work-life balance.
What's more, M&S conducts an extensive audit process, completing more than 2,000 ethical assessments on an annual basis. These evaluations include unannounced visits and direct worker interviews, ensuring rigorous verification of ethical standards. By 2025, the company aims to source 100% of its products from suppliers meeting high ethical benchmarks.
The impact of these initiatives is substantial. M&S reports that almost 900,000 workers in its supply chain have experienced improved working conditions, including enhanced health and safety protocols, reduced overtime and better grievance mechanisms. Notably, participating factories reported a 16% reduction in product defects, showing that ethical practices can simultaneously benefit workers and business performance.
By integrating ethical considerations into its core business model, M&S demonstrates how companies can drive meaningful social progress while maintaining operational excellence.
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