Top 10: Ethical Labour Practices
Businesses of all shapes and sizes are working to establish ethical and sustainable supply chains, ensuring fairness and responsibility at every stage. Ethical procurement practices now serve as a cornerstone for organisations prioritising social impact alongside profitability.
From fair wages to transparent operations, these approaches reflect a growing demand for equity and accountability in supply chain management. Modern consumers, investors and employees expect businesses to uphold these values, reshaping procurement priorities across industries.
Here, we examine 10 key ethical procurement practices making a difference in global supply chains.
10. Community engagement
Key company: Patagonia
CEO: Ryan Gellert
Director of Environmental Action: Beth Thoren
Community engagement represents a strategic approach to corporate responsibility that extends far beyond traditional business boundaries. By actively collaborating with local populations, companies can create meaningful, sustainable impact through thoughtful investment and genuine partnership.
Patagonia stands as a transformative leader in this domain. Founded in 2002, the 1% for the Planet initiative exemplifies the company's commitment to community and environmental stewardship. What began as a visionary concept has grown into a global coalition of thousands of businesses contributing millions of dollars to environmental conservation efforts.
The company's approach transcends mere philanthropy. By supporting communities through targeted investments in education, healthcare and environmental protection, Patagonia demonstrates how businesses can be powerful agents of positive social change.
This strategy reveals a fundamental truth: true corporate responsibility means creating value that extends well beyond financial performance, fostering genuine, sustainable relationships with the communities that support global supply chains.
9. Freedom of association
Key company: H&M
CEO: Daniel Ervér
Director of Sustainability: Leyla Ertur
Freedom of association represents a fundamental principle of ethical labour practices, empowering workers to form unions, engage in collective bargaining and protect their interests without fear of discrimination or retaliation.
H&M stands as a leader in this critical area. The retailer has demonstrated a robust commitment to worker rights, with 84% of its supplier factories in Bangladesh featuring democratically-elected worker representatives. This approach goes beyond compliance, creating meaningful channels for worker voice and participation.
As Leyla Ertur, Head of Sustainability at H&M Group, articulates: "We believe brands should be accountable for their value chain. Industry-wide transparency commitments will drive real, positive change and, ultimately, a more sustainable fashion industry."
By promoting collective bargaining and worker representation, H&M illustrates how freedom of association can transform workplace dynamics, creating more equitable, transparent and responsive supply chain environments.
8. Employee and supplier development
Company: Unilever
CEO: Hein Schumacher
Chief Sustainability Officer: Rebecca Marmot
In the evolving landscape of ethical labour practices, workforce development represents a critical strategy for empowering workers and strengthening global supply chains. These initiatives go beyond traditional skills training, focusing on holistic professional growth and sustainable livelihoods.
Unilever's Enhancing Livelihoods programme exemplifies this progressive approach. By supporting more than 2.5 million smallholder farmers in improving agricultural practices, the company has created tangible pathways for economic advancement. The results are transformative: higher yields, increased income and enhanced career prospects for workers.
This approach transcends traditional corporate social responsibility. By investing in worker development, Unilever demonstrates how ethical supply chain management can simultaneously drive business performance and create meaningful social impact.
Such strategies reveal a fundamental truth: when companies invest in their workers, they build more resilient, innovative and sustainable global supply chains.
7. Fair remuneration
Company: IKEA
CEO: Jesper Brodin
Chief Sustainability Officer: Karen Pflug
Beyond legal minimums, progressive companies are redefining compensation through a holistic lens that considers local economic conditions, living costs and workers' fundamental needs. Fair wages represent more than a financial transaction—they are a strategic investment in human potential and economic stability.
IKEA stands at the forefront of this approach with its Responsible Wage Practices Framework. Extending throughout the global supply chain, the company's wage strategy ensures workers receive compensation that reflects local economic realities, not just statutory requirements.
The impact is substantial. More than 600,000 workers have received wage increases, demonstrating how thoughtful compensation strategies can drive meaningful social and economic transformation. By reducing financial stress and supporting workers' fundamental needs, IKEA illustrates how ethical wage practices can simultaneously benefit individuals, communities and business performance.
This approach transforms compensation from a cost centre to a strategic tool for creating more resilient, equitable global supply chains.
6. Non-discrimination and equal opportunity
Key company: Nike
CEO: Elliott Hill
Chief Sustainability Officer: Noel Kinder
Non-discrimination and equal opportunity are foundational principles of ethical labour practices, ensuring that workers are evaluated based on their professional capabilities and contributions, not personal characteristics unrelated to job performance.
Nike stands as a compelling example of this commitment. The company's Code of Conduct provides explicit protections against discrimination, prohibiting unfair treatment based on race, gender, age, or other protected characteristics. This approach transcends compliance, reflecting a strategic vision of workplace equality.
The results speak volumes. Women now comprise 51% of Nike's global workforce—a testament to the company's genuine commitment to diversity and inclusion. By embracing these principles, Nike demonstrates how inclusive practices can create more dynamic work environments and unlock broader talent potential.
Such strategies represent more than ethical imperatives. They are sophisticated business approaches that recognise diversity as a key driver of innovation, creativity and organisational success.
5. Training
Key company: Nestlé
CEO: Mark Schneider
Vice President Global Head of ESG Engagement: Rob Cameron
In the landscape of professional development, training and development are distinct yet interconnected strategies. While development offers a comprehensive, long-term approach to enhancing professional capabilities, training provides targeted, job-specific skills and knowledge crucial for immediate workplace effectiveness.
Nestlé's Cocoa Plan exemplifies the transformative power of strategic training. By equipping 150,000 cocoa farmers with advanced agricultural techniques, the company has achieved remarkable results, including crop yield improvements of up to 40%.
This approach underscores a critical insight: effective training is more than a compliance exercise. It's a strategic tool for driving individual and organisational performance. By investing in targeted skill development, companies can unlock substantial productivity gains, improve operational efficiency and create meaningful economic opportunities for workers.
Nestlé demonstrates how thoughtful, purpose-driven training can simultaneously address business objectives and support sustainable professional growth in global supply chains.
4. Elimination of child and forced labour
Key company: Apple
CEO: Tim Cook
Vice President of Environment, Policy and Social Initiatives: Lisa Jackson
In the realm of global supply chain management, Apple stands as a formidable example of ethical sourcing and human rights commitment. The technology leader has implemented a rigorous supplier assessment programme that goes far beyond traditional compliance measures.
In 2020, Apple conducted 1,121 comprehensive supplier assessments, covering an impressive 94% of its total spending. The company's approach to ethical procurement is defined by an uncompromising zero-tolerance policy towards child and forced labour, demonstrating a proactive stance in protecting worker rights.
The tech giant's commitment is not merely rhetorical. Apple has taken concrete action, terminating relationships with 20 suppliers found to have committed serious human rights violations. This decisive approach sends a powerful message across global supply chains: ethical standards are non-negotiable.
By prioritising worker dignity and human rights, Apple does more than protect its own brand—it contributes to a broader social transformation. The company challenges exploitative practices and promotes a more sustainable, ethical global business model that places human rights at the core of procurement strategy.
3. Transparency and accountability
Key company: Adidas
CEO: Bjørn Gulden
SVP Sustainability: Katja Schreiber
Transparency and accountability have become cornerstone strategies for ethical business practices in modern supply chain management. By openly sharing detailed information about suppliers, working conditions and labour practices, companies can build critical trust with consumers, investors and stakeholders.
Adidas stands out as a trailblazer in this approach. The sportswear giant publishes a comprehensive list of its direct suppliers, covering 99% of global production volume—an unprecedented level of openness that allows independent verification of ethical standards.
The results are compelling. Adidas has demonstrated that transparent SCM is more than a theoretical concept. With 80% of reported labour issues resolved within 30 days, the company proves that transparency can be a powerful mechanism for driving meaningful workplace improvements.
This strategy goes beyond compliance, transforming supply chain management into a dynamic tool for continuous improvement and ethical business practices. By embracing radical transparency, companies like Adidas show how open communication can create tangible positive change in global supply chains.
2. Ethical sourcing
Company: Starbucks
CEO: Brian Niccol
Outgoing Chief Sustainability Officer: Michael Kobori
Incoming Chief Sustainability Officer: Marika McCauley Sine
Starbucks stands out as a compelling exemplar of ethical sourcing excellence through its innovative C.A.F.E. (Coffee and Farmer Equity) Practices programme. This ground-breaking initiative currently covers 99% of the company's coffee sourcing, directly influencing the lives of over 400,000 farmers spanning 30 countries.
The programme demonstrates how procurement can be a powerful lever for social and environmental change. By embedding rigorous social and environmental considerations into its sourcing processes, Starbucks has effectively transformed procurement from a transactional function to a strategic force for global good.
Starbucks' strategic vision extends far beyond immediate compliance. With a bold commitment to ethically source 100% of its coffee by 2025—verified by independent third-party auditors—the company is setting new industry standards. This approach encompasses not just coffee, but also tea, cocoa and manufactured goods, signalling a comprehensive dedication to ethical procurement.
As businesses worldwide increasingly recognise the interconnected nature of global supply chains, ethical sourcing is no longer optional—it's a fundamental business imperative.
1. Fair working conditions
Company: Marks & Spencer (M&S)
CEO: Stuart Machin
Head of Sustainability: Lucinda Langton
Marks & Spencer (M&S) has emerged as a pioneering force, demonstrating how ethical sourcing can be strategically integrated into core business operations. Through its comprehensive Global Sourcing Principles and Human Rights Policy, the British retail giant is redefining responsible procurement practices.
At the heart of M&S' strategy lies the groundbreaking Ethical Model Factory programme—a testament to the company's commitment to workplace transformation. In Bangladesh, the initiative achieved a remarkable 42% reduction in working hours while maintaining worker wages, creating a tangible improvement in employee work-life balance.
M&S' approach to ethical sourcing goes far beyond surface-level assessments. The company conducts over 2,000 ethical assessments annually, including:
- Unannounced factory visits
- Direct worker interviews
- Comprehensive verification of ethical standards
By 2025, M&S aims to source 100% of its products from suppliers meeting stringent ethical benchmarks—a bold commitment that sets a new industry standard.
The results of M&S' ethical sourcing strategy are both impressive and illuminating:
- Nearly 900,000 workers have experienced improved working conditions
- Enhanced health and safety protocols implemented across supply chains
- Reduced overtime and improved grievance mechanisms
- Participating factories reported a 16% reduction in product defects
This data underscores a critical insight: ethical practices are not just a moral imperative but a strategic advantage that can simultaneously benefit workers and business performance.
M&S illustrates how forward-thinking companies can drive meaningful social progress without compromising operational excellence. By embedding ethical considerations into its core business model, the retailer demonstrates that responsible sourcing is not just possible—it's a competitive differentiator in today's global marketplace.
As procurement professionals seek to navigate increasingly complex global supply chains, M&S provides a compelling blueprint for integrating social responsibility with strategic business objectives.
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