Retailers slash ties with unethical suppliers to tune of £7.1bn in cancelled contracts
Retailers severed ties with suppliers who did not meet ethical standards to the tune of £7.1bn in cancelled contracts last year.
Research published today from Barclays Corporate Banking has highlighted that one in five UK retailers distanced themselves from suppliers who did not meet sustainability or ethics standards.
It comes as consumers have become increasingly interested in the provenance of their purchases and are willing to vote with their feet on companies who don’t make the cut.
An average of six contracts were cancelled per retailer, with an average value of £306,000 per contract.
Retailers were quick to cancel contracts when suppliers used unsustainable materials, with 39 per cent citing this as a reason.
Some 37 per cent cited unfair working hours while 32 per cent said they ended working relationships because a supplier was not part of a trade body that monitors ethical and sustainable standards.
Retailers invested some £179m into joining trade groups that monitor supplier performance on social issues.
“We are seeing a marked acceleration and shift among retailers towards prioritising sustainable and ethical standards in every part of their business operations,” Karen Johnson, head of retail and wholesale, Barclays Corporate Banking.
“That is now starting to take its toll on retail suppliers with billions of pounds worth of contracts being cancelled every year.”
As Gen Z enter the workplace and earn their own income, this trend will be driven even further, Johnson added.