Sustainability Watch – Peter McAllister, Ethical Trading Initiative
Peter McAllister, executive director of the Ethical Trading Initiative
Partnerships between industry and non-industry stakeholders should in theory represent the gold standard in terms of providing meaningful solutions to complex problems. But they are not immune from criticism. Ben Cooper met with Peter McAllister, executive director of the Ethical Trading Initiative, to discuss the challenges ahead and how ETI is evolving to meet them.
"Asking the stupid questions" is the disarming way Peter McAllister, who took the reins as executive director of the Ethical Trading Initiative (ETI) ten months ago, describes what an incoming CEO should do.
It’s a self-deprecating take but it sums things up well. Asking basic questions gives necessary insight into what makes an organisation tick, while gently challenging the status quo.
In fact, McAllister was recruited by the multi-stakeholder initiative "with a mandate to take a fresh look". There were "good things to build on", he says, but also "a need for greater clarity and some new direction".
In reality, McAllister is unlikely to have asked too many stupid questions. Having headed up the International Cocoa Initiative (ICI) for seven years, he understands the challenges presented by multi-stakeholder partnerships, which aim to tackle problems through collaboration between industry and external stakeholders.
Founded in 1998, ETI gained a high profile through its work on clothing supply chains. While McAllister concedes the organisation may have "plateaued a bit", he believes ETI is well positioned to reclaim its early vigour.
To that end, he initiated a review of how ETI works. The idea is "not to change the strategy per se but to change the approach to delivering that strategy".
Instead of working on an issue-by-issue basis, ETI will now look at supply chains "holistically". "Rather than focusing on a particular practice we’re going to look at how that supply chain works and how it can be improved.”
In addition to identifying where it can drive change, ETI is seeking supply chains which "are representative of a broader set of issues" to "develop processes, learn lessons and create tools and methodologies that can be applied in a broader way".
ETI is currently finalising which supply chains it will target across the food and farming, textiles, and hard goods/household sectors, initially selecting three from each. "As we get those going we can bring in additional supply chains which broaden our experience."
In food, supply chains being considered include citrus fruit from South Africa and fish from East Asia, as well as red meat, rice and shea nut butter.
While it has always covered food, ETI’s most prominent work has been in apparel. However, McAllister believes the time is right to raise its profile in food, and the impetus for this is coming from members. "I would be uncomfortable if I was the only one pushing the food agenda, but it’s largely coming from members." McAllister says this stems from "recognition that globally there are serious worker issues in the food sector".
ETI is not only targeting UK companies. McAllister believes the holistic supply chain focus makes recruiting multinationals a logical step. Targeting complete supply chains means increasing leverage in a specific chain becomes more important because it could be that "we’re missing a whole set of players who could be part of the solution to the problem".
Given how multinationals’ supply chains are structured, ETI could potentially extend its influence beyond food supply chains directly into the UK, and affect how products are sourced for other markets, as it has already done in the clothing sector.
The holistic approach also links neatly with the overall sustainability agenda. ETI’s focus has always been on working conditions, extending to environmental issues where they directly affect workers. But over the decade since it was launched, social and environmental issues have increasingly coalesced under the overarching theme of sustainability.
McAllister believes ETI’s new approach is in line with this progression. "If you’re going to look at a supply chain holistically, almost certainly environmental issues will be raised," he says, adding that understanding how issues interact is crucial. "There is a wide canvass for these things and trying to deal with them in isolation largely doesn’t work. It doesn’t mean everyone has to tackle everything, but recognising that broader canvass. And sustainability is probably as good a description as anything."
ETI will still not be working directly on environment but will seek appropriate partners where issues arise, McAllister adds.
McAllister is keen not to characterise the changes being made as his vision. While he believes the organisation was "ripe for change", he stresses that there was a strong desire for change within ETI and its membership, which required "channeling".
"I would like to think that I’ve contributed to it but I guarantee in the conversations we’ve had internally and with members, they’ve contributed more than I have. And it won’t work if it’s me. It has to be the organisation and what all our members are prepared to get behind."
This emphasis on consensus is critical and speaks to more than just the ‘softly, softly’ approach of an incoming CEO. Collaborations like ETI are built on consensus, and to a degree that presents them with one of their stiffest challenges. The search for agreement between members with differing perspectives can slow the pace of change. Indeed, this is one of the main criticisms from external campaigners.
From his work at ICI, McAllister understands the dynamic between external campaigners and MSIs. He acknowledges that the former have a role to play and welcomes well-informed criticism, but "poorly informed criticism at the wrong time can drive people the wrong way". In the worst case scenario, "companies hunker down behind the parapets, rather than being more transparent and engaged".
He is forthright about what MSIs can achieve in terms of concrete progress, albeit sometimes at a slow pace, and challenges some of the external campaigners "throwing bricks" to ask themselves what they have achieved in terms of real change.
Meanwhile, tension within the organisation between the corporate and non-corporate members is not to be feared. "Any multi-stakeholder initiative that doesn’t have tensions is probably not doing its job," McAllister bluntly suggests.
"All of our issues are challenging, challenging to workers themselves, challenging to companies, challenging to unions, to NGOs. So of course there’s tension in the air. The key thing is to turn that into creative and positive tension so you get innovative solutions. If we haven’t got tension on these issues, we’re not asking ourselves the right questions."
Looking ahead, McAllister hopes ETI can "regain many of the accolades that we had in the first half of our ten years: innovative, creative, cutting edge. ‘If you want to find out what’s happening in ethical trade, go and see ETI’. Those are the sort of accolades we want to reclaim."
McAllister says his bold aims may be "a bit scary" but he believes ETI has to be “held accountable by our ability to deliver meaningful sustainable change for workers at scale". And that means going beyond audits, corrective actions and boutique projects. "We really have to challenge ourselves. Otherwise I’m not quite sure how we could justify our existence over the next five to ten years."
Certainly McAllister foresees that ETI will be doing far more than justifying its existence. Rather, he says, "I hope we’ll be at the centre of some of the most exciting things that are happening in ethical trade."
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