Companies big and small continue to face pressures from consumers, manufacturers and governments to recognize and remedy the practices that contribute to the deterioration of our planet’s health. Every year brands make promises to help maintain the wellbeing of our environment — and these (often broken) promises usually include a plan to participate in sustainable sourcing. But with global supply chain shortages for “green” materials and pressures to lower production costs, the process of and commitment to sustainable sourcing is more complicated than ever before.

 

SO, WHAT IS SUSTAINABLE SOURCING?

As stated by Ecovadis, a team that provides holistic sustainability ratings service of companies, it’s “the integration of social, ethical and environmental performance factors into the process of selecting suppliers” with the overall goal of building “strong, long-term relationships with suppliers.” In other words, incorporating morals in a company’s business model by selecting farmers, purveyors and suppliers with ethical standards that support the health of the planet and working to build lasting relationships with those partners. When companies create effective supply chains, it puts them at an advantage over their competitors, especially in industries where outsourcing is the status quo, like the food sector. Initiatives in simplifying supply chains, responsible farming and traceability in sourcing all fall under the same goal of sustainable sourcing.

While many of us read and hear about companies adding sustainable sourcing to their corporate social responsibility (CSR) programs, it’s crucial to understand the why behind the initiative. The impacts of sustainable sourcing on the environment are leading factors for transforming supply management to a sustainable practice.

As an overview, they include:

  • 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 lowers the greenhouse gases that contribute to global warming.
  • Reducing the presence and impact of hazardous materials boosts human health and creates a thriving environment.

 

THE SCARCITY OF SUSTAINABLE MATERIALS

As more companies commit to sustainable sourcing, the demand for low-CO2 products increases too — at a rate already surpassing the overall production capacity for sustainably sourced steel, aluminum, copper and plastics. With global shortages of these core commodities, companies must pay premium prices for “green” materials and products. And because brands are facing extreme internal pressures to lower production costs, their CSR initiatives often take a back seat to profit potential. But savvy companies know their investors and other stakeholders are expecting them to decarbonize and they are aware of the social and financial benefits of doing so.

 

HOW DOES SUSTAINABLE SOURCING HELP YOUR BUSINESS?

Along with offering benefits to the environment, sustainable sourcing brings positive business results to companies that implement such efforts into their strategies, including:

  • 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 willing to pay more for eco-friendly and sustainably sources products, so as companies commit to reducing their impacts on the planet and transition to sustainable systems, they meet consumer demands, build credibility with new and existing customers, and set themselves up to be more competitive.
  • By going green, companies can benefit from tax breaks and government subsidies.

 

WHY COMPANIES SHOULD ADOPT SUSTAINABILITY 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.

Consumers, especially Millennials, Gen Z and Gen X, are more committed than ever to improving the environment and believe companies should help too. As consumer expectations continue on this trend, brands will need to get on board to ensure their brand ethos matches that of their target customers as 64% of U.S. households purchase sustainable products and 69% of North American buyers are willing to pay more for sustainable products.

Businesses are in the unique position to make a long-term impact on how the world adapts to avoid climate catastrophe, while also giving back to their communities, building brand loyalty and reinvigorating the economy. And with “green” material shortages, brands should act (and invest) quickly to ensure the success of their sustainability initiatives and reap the vast benefits of going green.

 

SOURCING A SUSTAINABLE FUTURE

Transitioning your business to sustainably-source products and materials doesn’t have to be scary. Start by recognizing where you can make a change and what your business can do to contribute to a sustainable world.

With more than a decade of experience in the sustainable living industry, Kiterocket understands the complexities of the path toward cleaner and greener business practices. Whether your company is hoping to improve its commitment to sustainability, or you’d like to highlight your company’s dedication to CSR, contact us to learn more.