Ethical trading at Tesco

Tesco's 'Trading Fairly' programme is a core element of our promise to buy and sell our products responsibly and exists: "so our customers can know that everything they buy is produced under decent conditions, and everyone involved is treated fairly".

As Members of the Ethical Trading Initiative (ETI) since it's inception in 1998, the ETI Base Code (http://www.ethicaltrade.org/eti-base-code), underpins our programme and forms the basis of our engagement with suppliers, being the standard against which we monitor their performance.

'Trading Fairly' is fully integrated within Tesco's commercial division, forming a key part of our broader strategy for corporate responsibility. Its objectives and activities are delivered by a wide range of commercial staff, overseen by a specialist ethical trading team including dedicated local staff in key supplying countries.

'Trading Fairly' is based on four key principles:

It is not a linear process, but is designed to support a cycle of continuous improvement. Supporting the four key principles are 15 specific priorities under which we organise our day-to-day work.

Trading Fairly

'Trading Fairly' is comprehensive, extending to everything we source for our own-label including Tesco-exclusive brands in UK stores, and goods and services not for re-sale to customers. Given our growing international business, we continue to strengthen our ethical trade systems for countries in which we operate outside the UK.

The challenges

As a large multiple retailer we source across a wide range of sectors and countries. Overall, our trade helps to create and sustain jobs that - in general - enable workers to enjoy better conditions than in the past. The direct supply chain to our UK stores alone employs around 1.4 million workers.

We recognise however that our suppliers in some countries face significant challenges in meeting all the standards set out in the ETI Base Code in full. Our commitment to our customers - and to the workers in our supply chain - is that these standards should be met. We are therefore committed to supporting our suppliers to do so.

Focus on Improvement

As our ethical trading programme has matured and the challenges in our supply chain have become clearer, our efforts have evolved to include a greater focus on long-term partnerships that support improvement. We focus on what we term 'beyond compliance', balancing our efforts on monitoring with help for suppliers and workers to address entrenched problems and improve conditions in a robust and sustainable manner.

We believe that what matters is being able to show that our business is helping to drive better standards for workers, and that we are targeting our efforts where we can make most impact.

Our work over the past year includes:

Convergence & Cooperation

We also work closely with others to address challenges that we can't resolve alone. Using our size and scale as a force for good, we are playing a leading role in agreeing an international concensus on best-practice compliance and remediation systems through our membership of the Global Social Compliance Programme (http://www.gscpnet.com), an initiative of the Consumer Goods Forum.

We are also members of the Ethical Trading Initiative (http://www.ethicaltrade.org), and SEDEX, an organisation for businesses committed to the continuous improvement of the ethical performance of their supply chains (http://www.sedex.org.uk).

In the past year we've taken a leading role in piloting a series of regional initiatives to improve social dialogue in Bangladesh and India, and in piloting farm-specific grievance mechanisms supported by the CCMA (South Africa's Centre for Conciliation, Mediation and Arbitration), as part of our work with the Ruggie process.

The Future

In the years ahead we will continue to further develop and focus our ethical tading programme, targeting our support for suppliers facing challenges to improve using intelligence gathered through Sedex and our global dialogue with key stakeholder groups.

We will continue to develop and implement tailored strategies to address some of the most entrenched challenges our suppliers face, with particular focus on how best to improve productivity and wages in parts of South Asia, and strengthen worker representation as a means to improve conditions across the range of labour standards.