IEH - Ethical Trading Initiative Norway

Commit Assess Adapt Collaborate Measuring, reporte, communicate

Ensure commitment to ethical trade in the company and its supply chain

Establishing a culture for ethical trade is a matter of ensuring that employees, suppliers and partners know what ethical trade means for the company and the company’s suppliers. Establishing a strong culture for ethical trade requires a positive attitude and a clear commitment on the part of company management.

As a member of IEH- Ethcial Trading Initiative Norway, you have access to advice and guidance, and a range of resources and tools in addition to those available on our open pages. IEH is an arena for network-building, and a meeting forum. IEH also offers courses and seminars, and capacity-building for your suppliers. Read more about the benefits of being a member in IEH.

How to proceed:

  1. Adopt a code of conduct
  2. Ensure company-wide commitment, plan and organise the work
  3. Communicate with the suppliers

1. Adopt a code of conduct

When your company starts to work with ethical trade, you should begin by adopting a supplier code of conduct that will provide guidelines for both suppliers and internal parties. The guidelines you adopt should be based on UN and ILO conventions. There is international consensus that these conventions apply to labour standards worldwide. Many companies also include requirements in the areas of animal health.

Furthermore, the guidelines should  describe how you intend to follow up the supplier. The guidelines for ethical trade will have strategic implications for your company, and they should therefore be approved by the company’s board.

2. Ensure company-wide commitment, plan and organise the work.

When you start to work with ethical trade, it is important that you prioritize and establish realistic goals. No company or organisation can do everything at once.

When a company sets itself goals relating to ethical trade, many employees are affected. You will achieve the best results if ethical trade becomes an integral part of your operations, and you should therefore organise your work with this in mind. Employees in a number of areas, such as purchasing, design and quality control, can participate in the process, but those who work directly with your suppliers must always be involved. Employees with responsibility in this area must be given information and training that is tailored to the tasks to which they have been assigned. 

Building a strong culture of ethical trade in your company is closely linked to the effectiveness of your internal information and communication. The company’s board and employees need to know about the goals and ambitions, the activities that have been completed, what has been successful and what has proved difficult to achieve.

Once you have set your goals, you should draw up action plans, assign responsibility and allocate resources. Tasks will need to be planned and prioritised.

Two of Kid Interiør AS’s objectives for the first year they worked with ethical trade were:

  • Draw up and adopt guidelines for ethical trade
  • Communicate guidelines for ethical trade to suppliers and partners

Culina/Enor AS, which is already engaged in efforts to promote ethical trade, included the following objectives in its annual plan:

  • Carry out a risk assessment of the main suppliers
  • Assess the working conditions of selected suppliers, identify any departures from the guidelines (code of conduct) and initiate improvements
  • Continue in-house training of staff in ethical trade

3. Communicate with your suppliers

The goal of achieving better working conditions in the supply chain can only be reached if the suppliers, importers and agents in your supply chain also take responsibility. It is in the supplier’s factories or on their farms or plantations that working conditions have to be improved, and your agent or importer should also engage in improving working conditions in their suppliers’ operations.

You should therefore communicate with your suppliers and make sure that they are familiar with your code of conduct. Remember to explain why working conditions at the production site are important to your company – in addition to product quality and delivery terms. You should also make it clear that you realise that the goals set out in your code of conduct cannot be achieved immediately, and that contracts will not be terminated due to breaches of these guidelines as long as the supplier shows a real commitment to looking for and implementing improvement measures.

How do you go about?

The simplest way to inform your suppliers about your code of conduct is to send it to them, and to your agents and importers, along with a covering letter explaining how you expect them to follow it up.

Furthermore, you can convey the importance of the supplier’s code of conduct by emphasising it in meetings and phone conversations with your suppliers. Some companies ask their suppliers to provide written confirmation that they have read and understood the code of conduct.

The starting point for communication on this topic should be that you, the supplier, the agent and the importer all have a shared interest in ensuring that the code of conduct is complied with because:

  • Suppliers with poor working conditions are a considerable burden and liability to their customers;
  • Suppliers that provide decent working conditions usually have a more stable workforce than competitors who treat their employees badly. This in turn means that they have competent employees to carry out production tasks and that quality and security of delivery are ensured.

When you purchase goods via an agent or importer, you should ensure that they take responsibility for following up the suppliers.

You can see that agents and importers are seriously committed to ethical trade if they:

  • Adopt a code of conduct that covers the same topics as yours;
  • Know where the goods they deliver to you have been produced;
  • Initiate their own efforts to promote ethical trade as described in this guide, with the aim of bringing about improvements in their suppliers’ working conditions;
  •  Report on their work with ethical trade, ideally making their findings publicly available.

If you already have a well-established customer relationship, then you ought to have a good basis for cooperating on ethical trade. When you enter into new customer relationships, it is important that your new suppliers are given adequate information about your company’s policy, your code of conduct and goals in the area of ethical trade, how you work to achieve your goals, and what your commitment to ethical trade will imply for your future cooperation. 

Resources - Commit:

Below is a selection of resources and tools associated with the commitment of working with ethical trade in the company's supply chain. A membership in IEH gives you access to more resources and tools in addition to ongoing counseling and follow-up in your work with ethical trade.

Do you need guidance? Become a member of IEH!

Do you need guidance? Become a member of IEH!

Would you like to know more about membership of IEH? Or perhaps you would like to arrange a non-binding meeting? Please contact us.

Guide: Ethical Trade

Guide: Ethical Trade

We have created this guide to show that ethical trading is feasible and produces results even for small and medium enterprises, and that it really is all about getting started.

Read more »