How Ethical Business Practices Can Help Your Business

ethicsTrading and working with developing countries offers ample opportunity for legitimate and profitable business. However, it is important to make sure that a desire for maximised profits doesn’t override any legal, social, economic or environmental obligations and responsibilities.

Many businesses make the mistake of trading with manufacturers and suppliers who utilise child and slave labour, and abuse worker’s human rights. Whether this is intentional or not, it’s far too common in international supply chains.

Despite initial short-term profit, it comes with serious consequences for your business. Your reputation will suffer and this reputational damage will impact on both investments in your business and consumer interest in your brand. This is especially true if you’re hoping to procure government tenders or business deals with large, well-respected organisations – many can’t and won’t enter business with a company that abuses human rights, economic rights, and the environment. Finally, a lack of quality environmental or quality management can actually decrease efficiency, drive up costs over time, and lower the overall quality of your products. Poor quality products means less trust in your business, a greater chance of safety concerns, and the risk of not meeting compliancy standards with the end product.

Statistics

Child Labour
According to the United Nations:

  • In 2008, there were approximately 215 million child labourers aged 5-17 in the world. Among them, 115 million children were in hazardous work (a term which is often used as a proxy for the worst forms of child labour).
  • Nearly 114 million child labourers are in Asia and the Pacific.
  • Most child labourers are working in agriculture (60.0%). 25.6% work in services, 7.0% in industry and 7.5% work in undefined areas.

Only one in five child labourers are in paid employment. The overwhelming majority are unpaid family workers.

Health & Safety
According to the International Labor Orgainzation:

  • Every year more than 1.1 million people die from occupational accidents or work-related diseases in Asia and the Pacific.
  • Every 15 seconds, a worker dies from a work-related accident or disease.
  • Every 15 seconds, 153 workers have a work-related accident.
  • Every day, 6,300 people die as a result of occupational accidents or work-related diseases – more than 2.3 million deaths per year.

Environment
According to World Resources Institute:
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Benefits Of Trading Ethically

Although dealing ethically may not seem cost efficient at face value, it actually brings a number of holistic benefits to the table that you might not be able to measure tangibly. These benefits can be broken down into a series of key points:

  • Your reputation will improve, increasing leads and outreach;
  • Employee morale will improve, and you’ll attract more dedicated and happier staff to your business;
  • Your chances of attracting investment improve exponentially;
  • It will give you a competitive advantage over less ethical or socially and environmentally compliant businesses;
  • By trading with environmentally conscious businesses you’re ensuring that you’re doing the right thing by the planet, and you know that you’re saving money by dealing with an efficient partner.

Here at QualityTrade we only feature businesses who hold accredited ISO certifications. We believe in creating trade for those who deserve it as shown through their acquired certifications. While you do right by your business, workers and the environment, we put you in contact with buyers who appreciate your compliance standards.

Monitor Supply Chains

Just like you would monitor to ensure the products being produced by manufacturing company are up to your standards, it is just as easy and important to ensure that all the businesses involved in the production process maintain ethical business practices.

Let’s say you bought a piece of sheet metal from China. The steps in creating that piece sheet of metal could include:

  • The minerals and ore are mined;
  • Transported to a factory;
  • Smelted into metal;
  • Cut into the appropriate shape; and
  • Shipped to you.

This is an extremely simple example, and more complex pieces of machinery have many more steps. However, it is unlikely that a single company will perform all of these steps on their own – they’ll purchase the ore from a mine, and so on. Policing this process becomes more difficult the bigger and more technical your order. When you’re buying some sheet metal from a factory in Shenzhen you’re not likely to be considering how everything involved in the product was sourced or smithed. This, however, is no excuse not to ensure all the company’s involved in the production process are operating ethically. This is where standards come in and help the situation.

How Standards Can Help

There are some steps you can take to monitor your behaviour for ethical compliance. Firstly, there are three major International Organisation for Standardization (ISO) standards that exist for dealing with social, economic, and environmental development. The ISO is a well-respected international organisation that writes and publishes global industry standards with the assistance of leading experts across a variety of fields.

The three ISO standards are the ISO 14001:2014 Environmental Management Systems standard, ISO 26000:2010 Social Responsibility standard and

ISO 14001 Environmental Management Systems

According to the ISO, the 14001 standard carries three main objectives:

  1. Enhancing a business’ environmental performance;
  2. Fulfilling a business’ compliance obligations; and
  3. Achieving a business’ environmental objectives.

ISO 26000 Social Responsibility

Developed in 2010, the ambitious ISO 26000 standard was the brainchild of nearly 500 experts from a diverse group of industries. Its primary goal is to help organisations to better align their behaviour wit socially responsible behaviour, and contribute to sustainable social, economic and environmental development as a result.

It covers six core areas of focus that intertwine with each other:

  1. Human rights;
  2. Environment;
  3. Labour Practices;
  4. Consumer Issues;
  5. Fair Operating Practices; and
  6. Community Involvement and Development;

ISO 45001 Occupational Health & Safety

Currently in development, this new standard will help organisations by providing a framework to improve employee safety, reduce workplace risks and create better, safer working conditions around the world.

According to the ISO: “The standard is currently being developed by a committee of occupational health and safety experts, and will follow other generic management system approaches such as ISO 14001 and ISO 9001. It will take into account other International Standards in this area such as OHSAS 18001, the International Labour Organization’s ILO-OSH Guidelines, various national standards and the ILO’s international labour standards and conventions.”

An Overview

The benefits of ethical trading far outweigh the immediate financial savings. Exploiting child and slave labour, and disregarding your consumer’s expectations and trust, will likely save you money. But at what cost? Unconscionable conduct provides a short-term benefit with no regard for your own reputation. Even if you don’t care about violating human rights, labour rights and consumer rights, unethical trading severely impacts on the competitiveness and financial viability of your business.

Extensive studies and surveys from across the world have shown that consumers are willing to pay more if they can rest easy knowing their products were sourced and produced ethically. Furthermore, many consumers have very strong opinions about certain brands – they develop intense loyalty to brands they admire, and aggressively boycott brands they don’t. In fact, supply chain labelling is increasing, especially in developing countries, allowing consumers to determine where a product comes from and whether the supply chain is socially and environmentally compliant. Be a brand that consumers admire, and not one they detest.

 

ABOUT THE AUTHOR

QualityTrade is the exclusive business-to-business (B2B) marketplace for ISO-certified companies. Everyday we connect our users with ISO-certified companies, who meet international standards.