As climate change remains a hot-button issue and as more consumers better understand what practices contribute to the deterioration of our planet’s health, companies are recognizing the importance of their actions in maintaining the wellbeing of our environment. One of those actions is sustainable sourcing, and in recent years, more and more brands are announcing how they plan to participate in sustainable sourcing to reduce their impact on the planet.
So, what is sustainable sourcing?
As stated by Ecovadis, 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 making the shift in 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, 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.
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 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.
Leaders in sustainable sourcing
For many companies, exploring sustainable practices to add to their business models is fairly recent, but some companies built sustainability into their brand ethos from day one, like:
- 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 with customers to meet the standards the family expects out of products they purchase themselves.
Evolving to meet consumer expectations
As smaller, independently-owned companies continue to make sustainable sourcing a standard in brand values, larger corporations are catching on and making strides in updating their business practices. Some of them include:
- 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.
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.
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. Building a community that works together, supports one another and are advocates for change is the best way to create brand loyalty and have a meaningful impact on customers.