Sustainable Product Sourcing

Sustainable sourcing is more than just a buzzword – it’s how both consumers and brands can work to ensure the future well-being of the planet and people. From beauty and makeup to clothing and textiles to food and drink – and everything in between – the goods and resources brands source have a major impact on the environment and people.

As a brand, sustainable sourcing ensures that your company and all actors along your supply chain take part in practices that are environmentally and socially responsible. Customers today – your buyers – also increasingly expect corporations to behave in socially responsible ways. So while responsible sourcing is a major way to bake sustainability throughout your entire business model, it’s also a strong strategy for getting that competitive edge on your market.

So what does sustainable sourcing entail? And how can companies jumpstart their sustainable sourcing journeys?

What Does Sustainably Sourced Mean?

Sustainably sourced means that a material, service, or good has been procured from suppliers, manufacturers, or co-ops who use practices that are beneficial for the environment, economy, and society. Ethical and sustainable procurement is typically how companies ensure that the materials and practices throughout their supply chains – from vendors, suppliers, and contractors to the farmers and field — are benefiting both planet and people.

Regardless of how a company approaches its sustainable sourcing, there are three key elements of truly sustainably sourced goods and materials.

1. Environmental sustainability

At a high level, environmental sustainability looks at the way natural resources are used, whether or not pollution is created, and how habitats are affected. Examples of corporate environmental sustainability initiatives include carbon-neutral pledges, tree-planting initiatives, and zero-waste products.

2. Social sustainability

Procuring goods and materials from socially sustainable suppliers means taking into consideration fair wages, working conditions, and labor practices. Ideally, social sustainability considers the actors and social impact throughout an entire supply chain – from the farmer to the factory worker and beyond – to ensure the utmost ethical and fair treatment.

3. Economic sustainability

Economic sustainability includes ensuring financial and economic stability as well as reducing energy demands. Some examples of economic sustainability might include using alternative energy or sustainable agriculture to strategically tackle environmental and economic issues at once.

While each initiative alone is both welcome and needed, for truly sustainable sourcing a company should consider and strategically plan around all three throughout their entire value chains — even if they start small and scale.

The Benefits of Sustainable Sourcing

Sustainable procurement takes time, strategy, and work. But whether you’re looking to get a handle on your supply chain, protect your revenue, or give your strategy a competitive edge, then sustainable sourcing is for you.

Some of the major benefits of ethical and sustainable procurement include:

● Attracting new customers‍

● Protecting your brand reputation

● Mitigating the risks of supply chain disruption

● Avoiding fines and litigation

● Accessing new markets

● Differentiating your service

● Predicting future earnings

● Speeding up innovation

How to Make Sure Your Products Are Sustainably Sourced

Now that you understand what sustainable sourcing is, let’s talk about how to make sure your products are sustainably sourced. Although it might seem overwhelming, starting small – with one goal, one ingredient, or one pilot – and expanding accordingly is the best way to jumpstart your sustainable sourcing. Even these small changes over time will make a large impact on your company, and the world around you.

Here are a few tips for getting started:

Develop sustainable policies and goals for procurement

Setting some sustainable sourcing goals and KPIs — whether for 2050 or just this year — is the first step in getting started. Getting as specific as possible, even if you’re just starting with one ingredient, one supply chain, or one supplier is key.

Set expectations with suppliers

As you begin to take a look at your suppliers, and whether or not they implement or are willing to implement sustainability practices, get super clear about expectations. As contract renewals or new contracts arise, setting proper expectations around sustainability practices — and even outlining such requirements in the contract — is a vital step toward truly sustainable sourcing.

Support your suppliers

Once you’ve set clear expectations for your suppliers, collaborating and supporting them beyond the initial signed contract is a great way to keep up-to-date with their practices, ensure sustainable sourcing, and build a longer-term relationship. Your suppliers may run into questions or issues on how to improve sustainability practices or continue to comply with trade regulations. Staying supportive, in addition to holding them accountable, will foster more sustainable sourcing and growth.

Support your procurement teams

While it’s important to ensure that any external partners are aligned with your vision and sustainability requirements, supporting your internal teams to source sustainably and hold procurement practices to those same standards is also just as key. Providing your internal teams with the direction, KPIs, resources, and training to support them in sustainable procurement will make a huge difference. Additionally, ensuring they have any tools and software needed to track and report on their procurement and sustainability practices will help set them – and your entire business – up for success.

Ongoing monitoring and evaluation

Use ongoing audits and assessments to monitor how well your suppliers perform. Gather data from multiple sources to get an accurate look at whether or not sustainability goals are being met. Even better, implement a solution that can give you the ability to monitor your supply chain in real-time, such as BanQu, to help you reduce shoulder taps for data. Keep in mind that while spot audits, high-level shipping data, and third-party certifications can certainly help, they’re quickly becoming insufficient for truly sustainable sourcing evaluation.

Consistent reporting to stakeholders

Transparency is key in upholding trust with your stakeholders – whether investors, consumers, or other internal teams. Including consistent reports on sustainability practices throughout your supply chain with your suppliers will help keep everyone in the loop and honest.

Taking the Next Step in Sustainable Sourcing

If you’re ready to sustainably source materials, goods, and services, BanQu is here to help. Using our multi-industry suite of solutions, companies can trace and track source-level data throughout their supply chains to ensure the utmost efficient, controlled, and sustainable sourcing. Chat with us to learn what BanQu can do for you. Click here to get your free demo!

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