Sourcing products sustainably is a crucial aspect of modern business operations. With growing consumer demand for environmentally and socially responsible products, companies must adopt green sourcing practices to remain competitive and meet ethical standards.
The Importance of Ethical Sourcing
Sustainable product sourcing refers to obtaining materials in a way that minimizes negative environmental and social impacts. For example, textile companies can purchase silk or linen — made from silkworms and flax, respectively — rather than polyester, which is a type of plastic. They can ensure the fabric comes from farms where workers receive a fair wage and have regular breaks.
Sustainable sourcing benefits businesses in several ways. First, it can give them an advantage over competitors. Sustainability often attracts eco-conscious consumers and builds long-term brand loyalty. People may even be willing to pay more for ethically sourced items. A 2022 study found that over 40% of U.S. consumers would pay more for sustainably produced products while grocery shopping.
Transparent product sourcing reduces the risk of reputational damage, supply chain disruptions and legal liabilities associated with unsustainable practices. Adhering to sustainability standards and certifications ensures compliance with evolving regulations, avoiding fines.
Sourcing products sustainably often has a higher initial upfront cost than businesses are used to. However, it can also help companies reduce waste, optimize resources and improve efficiency, translating to cost savings in the long run.
Additionally, creating a culture of sustainability fosters a better work culture. Employees will feel good knowing they have a positive social and environmental impact.
Considerations for Sustainable Product Sourcing
It is critical to conduct thorough assessments of potential suppliers’ sustainability practices. Businesses should evaluate their suppliers on these metrics.
If a supplier has a negative environmental impact, is the company taking steps to mitigate or offset it? For example, does it donate money to environmental organizations to compensate for its carbon emissions? If a supplier has Fairtrade or Forest Stewardship Council certifications, that can be a green flag.
Other factors to consider include water usage, greenhouse gas emissions and waste generation and disposal. How much waste does the supplier generate in a given year, and how long will that waste remain in the landfill? For example, styrofoam takes around 500 years to break down. How does the company dispose of its packaging?
How a company treats its workers is just as important as how it treats the natural world. Businesses should examine whether a potential supplier pays its workers a living wage and follows labor laws. They should also find out if former employees have lodged formal complaints against the company.
Businesses must collaborate with suppliers that support fair hiring practices and promote diversity, equity and inclusion. What benefits do workers receive? How high are the turnover rates?
Supply chain transparency is another key aspect of ethical product sourcing. Suppliers should be able to provide detailed information about how they manufacture, harvest or obtain their products, including transportation processes and the origin of raw materials. How far do raw materials have to travel? Which companies are involved?
How to Implement Sustainable Product Sourcing
Businesses can take these steps to ensure they’re sourcing materials sustainably.
Set Clear Goals
Companies should define specific, measurable, achievable, relevant and time-bound (SMART) goals aligned with their sustainability objectives. For example, they can aim to source 50% of their materials from a net-zero supplier within one year of the starting date.
Businesses should engage with suppliers to align their sustainability objectives and foster innovation. They must establish strong partnerships to exchange information about best practices and improvement opportunities.
For instance, companies can work closely with their suppliers to develop eco-friendly product designs and packaging solutions. They can help source recyclable, biodegradable or compostable materials and figure out the logistics of ordering them.
Conducting regular audits to verify supplier compliance with sustainability standards is essential. Businesses should encourage their suppliers to obtain recognized certifications like ISO 14001 — which governs environmental management — or SA8000, which deals with social accountability.
Adapting to a Changing World
When businesses prioritize greener sourcing practices, they help preserve natural resources, support fair labor, reduce their carbon emissions and enhance their brand reputation. Ethically sourcing products also helps companies mitigate the risks associated with regulatory compliance, supply chain disruptions and evolving consumer expectations. The world is changing fast — it’s time for businesses to get on board with sustainability.
Jane Marsh works as the founder and editor-in-chief of Environment.co where she covers environmental news and sustainable living tips.