International business ethics: supply chains and marketing

Supply chain considerations: pay and working conditions

Global supply chains often run through countries with low wages and weak enforcement of labour laws. Issues include pay below a living wage, excessive overtime, unsafe buildings and machinery, lack of protective equipment, and denial of the right to join a union.

The Rana Plaza factory building collapsed near Dhaka, Bangladesh, on 24 April 2013, killing 1,132 garment workers and injuring about 2,515. Over 190 brands and retailers signed the legally binding Accord on Fire and Building Safety in Bangladesh (first agreed in 2013, updated in 2018), with independent inspections, mandatory repairs and worker safety training; 1,653 factories were covered. It became the International Accord for Health and Safety in the Textile and Garment Industry in 2021.

Exploitation of labour and child labour

Exploitation includes forced labour, withheld wages or passports, and very long hours. Child labour is work that deprives children of schooling or harms their health and development. ILO and UNICEF estimated that about 138 million children were in child labour in 2024, around 54 million of them in hazardous work, a fall of more than 22 million since 2020; 61% were in agriculture, and sub-Saharan Africa had nearly two-thirds (about 87 million).

Business responses: supplier codes of conduct, independent audits, traceability of raw materials, long-term supplier relationships, paying fairer prices, certification schemes (for example Fairtrade), and ending contracts with suppliers that break the rules.

Marketing considerations

Misleading product labelling: false or exaggerated claims about ingredients, health benefits, origin or environmental credentials ('greenwashing'), or hiding information consumers need.

Inappropriate marketing activities: targeting children with unhealthy products, aggressive promotion in countries with weaker consumer protection, marketing products banned or restricted elsewhere, and culturally offensive campaigns.

Consequences: fines, product recalls, boycotts, loss of trust and long-term damage to the brand.

Worked example

A clothing brand pays a supplier $4.00 per garment. Raising factory wages to a living wage would add $0.36 per garment. The brand sells 2.5 million garments a year at $25. Calculate the extra annual cost and its share of revenue.

1. Extra cost = 0.36 x 2,500,000 = $900,000
2. Revenue = 25 x 2,500,000 = $62,500,000
3. Share = 1.44%

Answer: $900,000 a year, only 1.44% of revenue.

Check yourself

1. The Accord in Bangladesh covered 1,653 factories, of which 1,610 were inspected. What percentage were inspected, to 1 decimal place?
   Show answer

   97.4 %. 1,610 / 1,653 x 100 = 97.4%.

2. ILO and UNICEF estimated 138 million children in child labour in 2024, 61% of them in agriculture. How many million is that, to 1 decimal place?
   Show answer

   84.2 million. 138 x 0.61 = 84.2 million.

3. Raising pay adds $0.50 to a garment that sells for $20. What percentage rise in price would fully pass this on to customers?
   Show answer

   2.5 %. 0.50 / 20 x 100 = 2.5%.

4. Which is the best definition of child labour?
   • Any paid work done by a person under 21
   • Helping with household chores
   • Work experience organised by a school
   • Work that deprives children of schooling or harms their health and development
   Show answer

   Work that deprives children of schooling or harms their health and development. Child labour is harmful work, not all work by young people.

5. Explain how a global brand can reduce the risk of exploitation in its supply chain.
   Show answer

   It can set a supplier code of conduct and carry out regular independent audits of factories, ending contracts with suppliers that break the rules.. Monitoring and enforcement are needed; codes alone are not enough.

6. Explain why misleading product labelling is an ethical issue.
   Show answer

   It deceives consumers into buying products based on false claims about ingredients, health or environmental benefits, so they cannot make informed choices and may be harmed.. Consumers rely on labels to make informed, safe choices.

7. What is the most likely consequence for a brand when unsafe conditions at a supplier factory are exposed?
   • An immediate rise in its sales
   • Damage to its reputation and possible consumer boycotts
   • Lower scrutiny from pressure groups
   • Automatic reduction in its costs
   Show answer

   Damage to its reputation and possible consumer boycotts. Consumers and pressure groups hold brands responsible for their supply chains.

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Sources

• Pearson Edexcel International Advanced Level in Business specification (first teaching 2018)
• UN Global Compact Business and Human Rights Navigator: Global outcry triggers industry action (Rana Plaza case study)
• ILO: Despite progress, child labour still affects 138 million children globally (June 2025)

Last updated 8 November 2026. Spotted a mistake? Tell us.