Sustainable Sourcing
Sustainable sourcing is the integration of economic, environmental, social, and ethical
performance factors into the process of sourcing. It includes purchasing sustainably preferable
products and services (products made from recycled or remanufactured materials). In other
words, incorporating morals in a company’s business model by selecting suppliers with ethical
standards that support the health of the planet and working to build lasting relationships with
those partners. Company stakeholders (including customers, shareholders, employees, NGOs,
trade associations, labour unions, government observers, etc.) expect corporations to take
responsibility for their supplier’s environmental, social and ethical practices.
Reasons for Adopting Sustainable Sourcing
The threat of a climate crisis continues to loom on the horizon with irreversible consequences
on both the economy and environment. While many changes must happen to reduce the impact
of climate change, businesses play a key role in adopting sustainable practices by leveraging
the needs and wants of their customers to create new norms and buying habits.
Dimensions Of Sustainability:
Dimensions of sustainable sourcing (Triple Bottom Line Consideration) are:
i.
ii.
iii.
Economic: Financial stability, energy demands and reduction.
Environmental: Biological perseverance, energy conservation, pollution reduction/
regulations, carbon/water footprint reduction and global warming
Social: Diversity, local communities and decent working conditions.
Impacts of Sustainable Sourcing on the environment are leading factors for making the shift
in sourcing to a sustainable practice such as:
i.
ii.
iii.
iv.
Reducing harmful impacts of pollution and waste on the ecosystem contributes to a
healthy, flourishing planet.
Reducing 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.
Sustainable sourcing brings positive business results such as:



Supporting small businesses and local communities fosters a strong livelihood within
the locale, including the business owners, employees and citizens as investment goes
into the economy and the community members reap the benefits.
Nurturing vibrant markets on local levels helps encourage innovation and supports
growth on a local scale.
By showing pride in local purveyors, growers and farmers through partnerships and
actively participating in the growth of local communities, builds customer loyalty
which translates to an increase in profit with strong customer support.


Implementing sustainable practices reduces operating costs by decreasing energy
usage, cutting back on waste generated and eliminating equipment for pollution control.
Consumers are now expecting brands to implement sustainable practices into their
business models, so as companies commit to reducing their impacts on the planet and
transition to sustainable systems, they meet consumer demands and build credibility
with new and existing customers.
Primary benefits of sustainable sourcing practices are to manage risks, reduce costs and
increase revenue.
i.
ii.
iii.
Manage Risks: Brand protection, supply chain disruptions, fines and litigations.
Reduce Costs: Vendor rationalization, reduced administration, the total cost of
ownership.
Increase Revenue: Service differentiation, access to new markets, competitive
advantage.
Sustainable sourcing provides opportunities to businesses:
i. Mitigate risks
ii. Increase competitiveness
iii. Attract new consumers
iv.
Develop new markets
v. Speed up innovation
vi.
Predict future earnings
Companies involved in Sustainable Sourcing:
Alstom: Sustainable Procurement Policy, including an Ethics and Sustainable Development Charter for
Alstom’s Suppliers and Contractors. Alstom promotes, and asks its suppliers to support, core values and
international standards of:
 Labour Standards
e.g. Eliminate discrimination and forced labour; comply with regulations for working hours and
wages.
 Ethics
e.g. Comply with fair competition and anti-corruption regulations; avoid conflicts of interest.
 Environment
e.g. Limit use of hazardous substances; promote environmentally friendly technologies and
recycling.
 Occupational Health & Safety
e.g. Foster a proactive attitude towards health issues; continuously improve safety for all employees
and customers.
 Products and Services
e.g. Integrate Eco-design principles in product development; ensure compliance with hazardous
substance regulations.
Nestlé: With a commitment to implementing responsible sourcing in its supply chain and
promoting animal welfare, Nestlé works to transparently report the sourcing of its 15 priority
raw materials. Through its “Farmer Connect” program, the company sources coffee, cocoa and
milk directly from more than 550,000 farmers, and for the ingredients from high-risk
environments, Nestlé conducts mappings of its supply chains with direct suppliers and conducts
farm assessments with partner organizations including ProForest and Earthworm Foundation.
Unilever: In 2010, Unilever set a target goal of sustainably sourcing 100% of its raw materials
by 2020, starting at just 14%. Unilever focuses on its key crops and commodities, including
tea and palm oil which comprises two thirds of its raw materials. As one of the largest tea
companies, it also wants to change the industry’s production standards, as sourcing palm oil
remains an ever-popular practice but one that is conflicted with irresponsible farming. Unilever
works with partners to drive a change in its own supply chain with a goal of impacting the
broader industry.
Barnana: As the brand’s founder was raised in Brazil, he infuses the same values of his culture
to Barnana. Using “upcycled bananas” and sustainably grown plantains, the company upholds
and supports organic and regenerative farming practices by working with native communities
where possible. The company believes in protecting the planet and works to ensure its practices
sustain that belief.
Nature’s Path: With a mission to leave the earth better than found, Nature’s Path is committed
to using organic ingredients and farming and continues to evolve its sustainability practices
through six pillars: grow organic, become carbon neutral, achieve zero waste certification,
preserve water, educate and engage to inspire action, and give back. Its latest goal is to work
with Loop to transition all its packaging to reusable, recyclable or compostable materials by
2025.
Organic Valley: As family farmers in the Coulee region started falling behind to industrial
farms, they gathered together to make a change and ensure sustainable farming could continue.
This was the beginning of the farmer-owned co-op, Organic Valley (at the time Coulee Region
Organic Produce Pool), which would work to set standards in how people look at food and
eventually act as a guide for the USDA’s organic standards. More than 30 years later, it
continues to provide high quality organic foods to create a healthier future.
One Degree Organic Foods: Built on the commitment of transparency in food sourcing, One
Degree Organic Foods works to produce foods with one degree of separation between farmer
and consumer, which is traceable with its source code technology. The company works with
farms, co-ops and processing operations around the globe ensuring they uphold high standards
in sourcing and farming practices and provide clean ingredients. All recipes are tested at the
family-run business before sharing.
* * *