The ethical issues are specific to particular retailers that also have a major role to play in the development of the respective businesses. This paper makes a report on the ethical issues being faced by Tesco, a major retailer in the UK.
One of the key elements that have been identified in the ethical implications of the retail industry in the UK is with respect to the issues in the supply chain management especially those encountered by them in sourcing from overseas markets. Several groups of stakeholders have evinced greater interest in this phenomenon. This interest by the media, investors, consumers, employees, the Government and NGOs have led companies to explore how they can best control and manage the ethical implications of increased sourcing from overseas markets.2 In order to ensure that the supply chain management of the retailers is an effective social compliance model from the ethical point of view, the retailers specify that the manufacturers’ facilities meet the local regulations concerning the compliances or they follow the codes of conduct specified by the retailers in this connection. For monitoring this, the retailers make use of the external agencies specialized in this area or some of them even employ their own full-time specialist executives. This issue can as well be related to the term ‘Ethical Trading’. Though there is no consensus on the definition of ethical trade at least in the UK context ethical trading refers to sourcing of products from companies that ensure better labour and human rights standards to their workforce which are part of the social compliance.
Another key element in the ethical sphere that has a close connection with the retail industry can be identified in ‘Fair Trading’. Fair trade has the more development-oriented specific aim of [contributing]towards change in international relations in such a way that disadvantaged producers can increase their control over their own future, have a fair and just return for their work, continuity of income and decent working conditions through sustainable development.3
Though fair trading started with an increased focus on the socio-economic issues, with the passage of time there has been a shift in the focus towards meeting the environmental standards. Although the Ethical Trading Initiative (UK) does not mention anything about the environmental standards, several retailers have started to monitor the environmental performance of their suppliers. For instance, through the Assured Produce scheme used in British agriculture and supported by many multiple retailers also involved in the Ethical Trading Initiative.4 It is often stressed that ethical trading should not only focus on the socio-economic issues but also should cover the environmentalissues as a part of the ethical requirements of retail business.