Ethical sourcing aka 'Dollar Voting' aka 'Moral Boycott' are emerging terms in the market that are catching the attention of producers as well as consumers. Ethics are supposed to be there in every business since ages, but till date the question that remains is: How and where are they followed? Is it nothing more than just a label?
Although the term is not new, as it was used by a UK magazine in 1989, it is with the recently rising environmental concerns, it has gained appeal. Animal rights, human rights and pollution and toxics are the issues to be dealt with for genuine ethical sourcing. From production of fibre to reaching of apparel to the consumer each and every ethic should be followed by the companies.
Countries and brands practicing ethical sourcing
The governments across the world have realized the importance of Corporate Social Responsibility (CSR) and are making laws for the companies to invest in it. For example, it is mandatory for a corporate company in India to devote 2% of its profit to CSR. In USA, the Organization of Economic Cooperation and Development (OECD) has set up special guidelines for Multinational Enterprises (MNEs) for CSR. In UK also certain policies have been framed by the government for sustainable development. In fact, many reports suggest that UK leads in CSR.
In certain cases the customers pay a high amount thinking that the cost of production will be high and they are getting a special piece of clothing. But many branded apparels are manufactured under 'not-so-acceptable' conditions.
Does ethical sourcing increase the price and affect sales?
Manufactures might think that opting for ethical sourcing is an expensive affair and it will lead to rise in the cost of the commodity. Actually this is not the fact because if it is practiced on a huge scale and across the globe, it will bear the fruits in the long term. Resorting to ethical sourcing means improving the lives of those, who really work hard just to earn their bread. If there is improvement in such conditions, it will reduce poverty and help the government to invest in other things or may be in reduction of taxes and providing more benefits to the corporate houses.
The forecast reports suggest that the industry experts are visualizing a growth in the luxury and branded apparel industry. It is certain that a customer who is buying expensive apparel won't mind spending few bucks more if it is going for the welfare activity. On the other hand, if more industries undertake more CSRs, the government should reduce taxes on both costumers and manufactures. The tax amount that will be saved by the buyer/consumer will directly go to the company for CSR.
If mutual and planned efforts are carried out in the right direction, it will be just a myth that resorting to ethical sourcing means reducing the sales.
Increasing awareness about ethical sourcing
The term might not be so new for many business tycoons but even today more then 60 percent of the consumers are still unaware about ethical sourcing. Efforts are made by various governmental as well as non governmental bodies to spread awareness about being an ethical consumer, among the masses through various campaigns. The media and its various forms have also taken this social responsibility of spreading awareness among the masses.
As mass media has a capacity to reach to vast population at once, many active movements and reformatory acts have been undertaken by it. A well established London based magazine appeals to its readers for moral boycotts to the 'Unethically Made Products'. Even the corporate companies take up such programs to educate their own employees in this regard. Schools and Colleges are also making the pupils understand the importance of being a principled shopper.
With the increasing awareness in this manner, it can be made sure that the companies' already practicing business ethics will have a better and brighter future. The sooner a company starts this, the better response it will get.
Textile, apparel and fashion is a huge industry and is also dependent on various other industries like agriculture, logistics, petrochemicals, leather making etc. If the movement is pioneered by giants in textile, apparel and fashion, it has the potential to bring revolution in various other industries as well.
A regulatory body for ethical sourcing
The resources have been already depleting while the human resources, at certain places, are being exploited which has forced the administrative bodies to take concrete actions. It has been still found that such bodies have been not so successful in implementing laws at the ground level and at certain regions have simply laid down "Guidelines/Directions". The action and implementation has to be done at the grassroots level.
As a result of these shortcomings there is immense possibility of a global governing body coming into action to curb unethical business practices. If a similar body comes into the force, it will be difficult for the players who are habituated to malpractice.
It is possible that the body might start issuing clean chits and certificates to the fair traders and seize the disreputable producers.
3. State.gov (US Dept. of State)