Ethical Performance
inside intelligence for responsible business


Littlewoods raises ire of NGOs and unions

March 2003

One of the UK’s leading retailers is to scrap its entire ethical trading department and curtail its corporate social responsibility activity after a takeover.

Littlewoods, which until recently was one of the leading proponents of CSR, took the decision following its £750million ($1210m) sale to an investment company controlled by Sir David and Sir Frederick Barclay.

The Liverpool-based firm will leave the Ethical Trading Initiative, of which it was a founding member, in April, and has told its ten ethical trading staff they will be relocated or made redundant.

It has also failed to renew its membership of the Institute of Social and Ethical Accountability and is expected shortly to end all charitable donations, worth around £500,000 a year.

The directors of 18 non-governmental organizations, including Anti-Slavery International, Cafod, Oxfam and Traidcraft, have described the company’s actions as ‘extremely disappointing’.

Littlewoods said the ethical trading team, which cost around £1million a year, was disbanded as part of a package of 228 redundancies, and the ETI no longer provided ‘value for money’. Department directors and buying teams would now monitor ethical standards in the supply chain, and there would be no lowering of ethical standards, it added.

The decision has angered trade unions, which saw Littlewoods as one of the key supporters of initiatives to improve workplace conditions in supply chains. The Transport & General Workers union is meeting Labour MP Linda Perham shortly to discuss Littlewoods. A supporter of CSR regulation, Perham has tabled an early day motion condemning the company’s withdrawal from the ETI as ‘an example of how voluntary initiatives for business to improve their ethical performance can fail’.

The motion calls on the government to examine ‘more efficacious methods of promoting corporate accountability’.

The union is also to hold talks with NGOs. T&G national organizer Peter Booth told EP: ‘There is legal provision in the UK to protect the pay and conditions of workers who transfer from one company to another, and it may be that this should be applied to ethical trading and other CSR initiatives that impinge on conditions of workers and suppliers.’

Booth, who is also president of the International Textile, Garment and Leather Workers’ Federation, said: ‘It’s an area we will take a look at. It could be we now need some way of ensuring that ethical standards are maintained when predators take over businesses.’

Simon Zadek, chief executive of Isea, said: ‘This raises questions about regulation because it tells us that voluntary practice only works if the commitment is consistent’.

Littlewoods is the most dramatic CSR cutback so far, but it is not the only one. In 2001 the Dole Food Company was criticized for scrapping its top CSR post, (EP3, issue 5, p12) while the food retailer Iceland scaled down its CSR measures after financial difficulties (EP2, issue 11).

See also editorial


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