What is Sustainable Sourcing?
According to Ecovadis, sustainable sourcing is the integration of social, ethical and environmental performance factors into the process of selecting suppliers.
Why is this necessary?
As supply chain continues to expand and grow globally, seeking lower costs and higher capacity, risks will increase due to the inflated demand. That being said, consumers are also starting to better understand the practices that contribute to the deterioration of the environment. Consumers, especially Millennials and Gen Z, are more committed to improving the environment and believe companies should help too. As consumer expectations continue, brands will need to ensure their brand ethos matches that of their target customers. Over the years, customers have also stated that they are willing to spend more on sustainable products. Hence, companies should take responsibility for their supplier’s environmental, social and ethical practices, increasingly making responsible sourcing an integral part of their procurement and supply chain management processes. This can help them to understand and manage risks in the supply chain.
How can Sustainable Sourcing benefit us?
Sustainable sourcing can help to slow down and reduce the deterioration of the planet’s health. To state a few benefits, sustainable sourcing can help in:
- Reducing harmful impacts of pollution and waste on the ecosystem contributes to a healthy, flourishing planet.
- Reducing the negative effects of freshwater contamination allows aquatic life to continue growing and providing for those on land.
- Reducing the carbon footprint, lowering the greenhouse gases that contribute to global warming.
- Reducing the presence and impact of hazardous materials boosts human health and creates a thriving environment.
When companies create effective supply chains, it puts them at an advantage over their competitors. Sustainable sourcing can bring positive business results to companies that implement such efforts into their strategies. These strategies can be:
- Supporting local small businesses, fostering a strong livelihood within their communities, as investment goes into the economy and the community members reap the benefits.
- Contributing to local markets can encourage innovation and aid growth on a local scale.
- Show pride in local farmers through partnerships can build customer loyalty which brings an increase in profit with stronger customer support.
- Implementing sustainable practices reduces operating costs by decreasing energy usage and reducing wastes generated.
- Consumers are now expecting brands to implement sustainable practices into their business models, so as committing to reduce impacts on the planet, they meet consumer demands and build credibility.
How does a company start Sustainable Sourcing?
1. Develop and integrate into the supplier selection process
Create criteria and processes for selection of suppliers and management, ensure that the supplier has visions and ethics aligned with the company’s policies
2. Set and communicate clear expectations for suppliers
When a company is engaging a supplier, the company should make it clear about the expectations the suppliers must meet and have them integrated into contracts.
3. Integration into buying practices
Provide the vision, training and tools for buyers to integrate Sustainable Sourcing into their work and procurement decisions. This may include new software, training in CSR and responsible business, and a complete change management plan.
4. Educate and support suppliers in setting their own business standards
Companies should encourage their suppliers to develop responsible practices on their own. Educate suppliers on the business and community benefits of practicing responsible business.
5. Ongoing monitoring of supplier CSR performance
Ongoing monitoring using assessments and audits are essential to maintain their supplier’s environmental and social performance. Using multiple sources of data and input from stakeholders is vital for having a balanced and thorough view of performance over time.
6. Manage stakeholder expectations and report on practices
Transparency is the final step to building and maintaining stakeholder trust. The company should produce supplier performance information that can be adapted in the annual Sustainability Report.
Responsible Sourcing, Supply Chain Management & Sustainable Procurement Course
Sustainable & responsible sourcing is impacting nearly every area of corporate business and the consumer’s mindset. Everything from sourcing materials, talent attraction and consumer purchasing habits is changing because of sustainable sourcing growth. Sustainable sourcing is the integration of social, ethical and environmental performance factors into the process of selecting suppliers. It includes purchasing sustainably preferable products and services as well as green purchasing guidelines that might pertain to certain products or commodities. Sustainable sourcing is needed because supply chains continue to expand globally into developing countries for lower costs and larger production capacity. This expansion exposes companies to increased risks and heightens the expectations of their stakeholders. Company stakeholders expect corporations to take responsibility for their supplier’s environmental, social and ethical practices. Now companies are increasingly making sustainable sourcing an essential part of their procurement and supply chain management processes.
At Aventis, we provide deep insights and training to help professionals thrive in the Sustainability & ESG field. You may explore the courses we provide which are conducted via virtual LIVE stream.
What we assure you will takeaway from our Responsible Sourcing, Supply Chain Management & Sustainable Procurement course would be the key pointers on understanding the principles, core subjects and key considerations for sustainable procurement, as well as, to consider different strategies and solutions for sustainable procurement in an organization. Do join us and meet our industry expert, Kavickumar Muruganathan!
Contact us now at (65) 6720 3333 or training.aventis@gmail.com to get in touch!
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