Ethical trade
Ethical trade is an umbrella term for efforts to improve environmental, labour, human-rights, and integrity outcomes connected with trade and supply chains. It is not one globally binding standard or certification. Approaches may combine purchasing practices, supplier engagement, worker voice, due diligence, traceability, grievance mechanisms, remediation, and public reporting.
In simple terms
Organizations use the label for programmes intended to prevent exploitation and other adverse impacts in sourcing and commercial relationships. Because the term has no single universal specification, users should explain the issues, suppliers, tiers, geographies, standards, evidence, and remedies covered. Responsible business conduct is broader: OECD guidance addresses an enterprise's operations, products, services, and business relationships across areas including human rights, employment, environment, bribery, disclosure, consumer interests, science and technology, competition, and taxation, not trade alone.
Why it matters
Trade decisions can influence wages, working time, safety, freedom of association, discrimination, environmental harm, and access to remedy across value chains. Codes and audits alone often miss hidden workers or problems created by price, lead-time, and volume decisions. Effective practice links risk-based due diligence with responsible purchasing, worker participation, remediation, and transparent outcomes. Legal regimes such as CSDDD may impose separate duties where applicable.
Example
An apparel buyer maps high-risk tiers, consults workers and unions, adjusts order deadlines that drive excessive overtime, funds corrective action, provides independent grievance access, and publishes outcomes. It describes this as its ethical-trade programme but separately maps its wider responsible-business-conduct responsibilities across operations, products, services, and other business relationships.
How it differs
Fair trade
Fair trade usually refers to defined trading arrangements, principles, or certification systems intended to improve producer and worker outcomes, while ethical trade is a broader umbrella for varied supply-chain practices and programmes.
Responsible sourcing
Responsible sourcing integrates impact and risk considerations into procurement and supplier management; ethical trade is a looser umbrella label, while responsible business conduct extends beyond sourcing to enterprise-wide operations, products, services, and business relationships.