The Place of Ethical Sourcing in Sustainable Procurement

We live in a world where global events and occurrences, together with human activities and their degrading environmental impact, are causing a major ecological uproar, leading to the clamour for a sustainable environment. Since demand is on the rise, manufacturing activities have negatively impacted the environment. However, consumers are increasingly becoming conscious of the social and environmental impact of their purchases and the effect of the manufacturing process. 

Therefore, the supply chain is now held accountable for its role in environmental degradation. To curb this degradation, ethical sourcing and responsible procurement have emerged as critical factors in maintaining a sustainable environment and achieving sustainable business success. 

This article will explore the concepts of ethical sourcing and sustainable procurement while considering their importance and significance.

What is Ethical Sourcing

Ethical sourcing is a supply chain management approach involving sourcing raw materials, semi-finished and finished goods from businesses that comply with Environmental, Social, and Corporate Governance (ESG) practices and legal requirements.

Here, products are sourced for and obtained ethically, including upholding rights, decent working conditions, standard business ethics, and prioritisation of health and safety of workers. Businesses are not supposed to procure goods to satisfy their clients and make profits alone, they must also consider how those products impact the people and communities who create them. This way, manufacturers are accountable for the impact of their manufacturing activities on the environment of the host communities and the world at large.

Sustainability in Procurement

Regarding procurement, sustainability is the process of making business decisions while considering not only the organisation and its benefits but also the implication of that decision on society and minimising the impact if it is negative. By implication, it is an eco-friendly sourcing process of selecting products, materials, and services through socially and environmentally responsible business ways.

Here, you don’t just consider the financial benefits to the company but also the social and environmental factors. Here, you don’t just meet fundamental criteria such as price, quality, delivery timeframes, and service levels, it is important to also meet other sustainable development and social responsibility criteria.

The Impact of Ethical Sourcing in Sustainable Procurement.

Ethical and sustainable sourcing is crucial in modern procurement, reflecting a shared commitment to socially responsible practices. In supply chain management, ethical sourcing has a significant impact.

• It ensures that standard working conditions and fair labour practices are upheld strictly in the supply chain, especially in areas like fair wages and safe working conditions.

• Ethical sourcing eliminates or minimises pollution and waste by promoting sustainable production practices.

• By promoting sustainable production practices and avoiding waste, the supply chain is kept lean, and cost is reduced.

• Also, it promotes social responsibility by supporting local communities and fostering economic development. 

• Studies have shown that by adopting ethical standards in procurement, companies tend to have more robust financial performance because of the excellent reputation that upholding ethical standards brings, and it also brings visibility for the business.

• By upholding fair labour practices, the possibility of employee turnover and employee exploitation, such as child labour, forced labour, and modern slavery, is reduced.

• Ethical sourcing with fair labour practices breeds trust and loyalty among employees and customers, enhancing the brand’s reputation and attracting socially conscious consumers.

• Adhering to fair labour practices ensures compliance with local and international laws, mitigating legal risks and potential reputational damage.

Implementing Ethical Sourcing in Sustainable Procurement

To ensure that sourcing is done ethically for the purpose of sustainable procurement, certain actions need to be taken.

Conduct supplier audit: Here, there is the need to conduct supplier audits to ensure compliance with ethical standards before selection. Assess labour practices, environmental impact, and adherence to human rights.

Establish guidelines and standards: Establish clear ethical sourcing guidelines and communicate them to all stakeholders involved in the supply chain. This way, there will be transparency and accountability throughout the process.

Effective collaboration: Collaborating with suppliers and working hand in hand with them to develop programs that will promote ethical sourcing will make the implementation process smooth and effective.

Businesses and society stand to gain numerous benefits by adopting ethical practices in their supply chain management. Embrace partners like SARA PROCUREMENT SERVICES LIMITED, which upholds ethical sourcing practices to pave the way for a successful business.

Visit our physical office space at 3 Fatai Irawo Street, Ajao Estate, Airport Road, Lagos, Nigeria, or any of our warehouse touch point locations worldwide to learn more about us and utilise our services. 

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