Benchmarking Retailers on Ethical Trading

Abstract

Corporate social responsibility is important, especially regarding the issue of poor working conditions in suppliers' operations in developing countries, commonly referred to as 'sweatshops'. Some companies are implementing codes of conduct into supply chains with reference to issues such as labour conditions. This paper examines these codes and develops a 'five star' rating system to benchmark companies based on their ethical trading activities. It reports on a survey of retailing brands operating in the UK and their ranking according to the 'five star' system. Results show that 90% of retailers with own-brand goods produced in developing countries either have no code of conduct, are developing one, or have one with no independent assurance of implementation. This communicates an apparent lack of concern by these retailers on this issue. The paper concludes that, for retailers, corporate social responsibility means going beyond benevolence to transparency of decisions and actions for consumer stakeholders.