Responsible business and investment

Responsible business recognises that the costs and benefits of private sector activity go beyond commercial and financial results. Enterprises affect the communities in which they operate, the lives of the workers they engage, and the marketplace in which they participate. Responsible enterprises take into account all these aspects, to enhance the positive and reduce the negative impacts of their operations and relationships.

Fair Trade is one way to ensure the supply chain delivers benefits for poor people. Through Fairtrade certification, producers and workers in international supply chains are guaranteed a minimum wage or price and benefit from a social premium which is used to benefit the community. Our support is helping to strengthen the Fairtrade certification system, broaden its scope and deepen its impact. The UK face of Fairtrade is the  Fairtrade Foundation which organises Fairtrade Fortnight each year to raise awareness of the Fairtrade message.

Ethical trade focuses on improving working conditions in supply chains. The Ethical Trading Initiative (ETI) is an alliance of business, trade union and voluntary organisations that works to improve the lives of pooor and vulnerable people working in factories and farms worldwide. Our support is helping ETI to model change that delivers benefits to poor working women and men. This will play a part in increasing the efficiency and effectiveness of over £15 million spent each year by ETI corporate members on their own ethical trade activities and positively influence the considerably greater sums these member companies spend on sourcing from developing countries.

DFID also supports improvements in working conditions in garment industries in Bangladesh, India and Lesotho, through the  Responsible and Accountable Garment Sector (RAGS) challenge fund. RAGS now supports twelve initiatives, aiming to show how better working practices improve workers' lives and make good business sense, to stimulate better practice more widely.

Codes and standards are an important mechanism for delivering responsible business and investment behaviour. DFID’s support focuses on voluntary standards (i.e. mechanisms that are not enforced through the legal system). This includes the  OECD Guidelines for Multinational Enterprises. DFID also provides the UK government’s contribution to the  UN Global Compact. The Global Compact is the world’s largest voluntary initiative for businesses to sign up to a platform aligning their operations and strategies with ten universally accepted principles.