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Why Is Sustainable Sourcing Such a Big Deal?

Image via Flickr everyoneisgone
Image via Flickr everyoneisgone

Most companies around the world do not have supply chain practices in place to promote sustainable sourcing. As customers push for sustainability, however, this issue is becoming a big deal. Take a look why consumers are demanding more sustainability and the steps companies are taking to improve.

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Sustainable Sourcing Is Not a Common Practice for Companies

According to a World Wide Fund for Nature (WWF) study, only 14 percent of companies around the world have pledges towards the sustainable sourcing of key commodities, such as palm oil, sugarcane, soy, paper, and farmed fish. The study analyzes 256 high-grossing companies, including Unilever, Kimberly-Clark, and Royal Ahold. Only 22 of those companies have measurable, time-bound commitments to source commodities sustainably.

The study also identified a major transparency issue across the board. Less than half of these companies provided sustainability information in their annual reports or created separate sustainability reports. Sustainable sourcing from smaller companies may prove to be much worse.

As Stephen Watson, Head of Corporate Engagement at WWF, states, “Sourcing credibly certified commodities is an essential first step for companies to implement a sustainable sourcing strategy, ensuring that they have been produced sustainably and also that social issues have been addressed.” WWF is urging all companies in the Consumer Goods Forum to take action to improve their sustainable sourcing and to publish the results for consumers.

Consumers Want Companies to Have Sustainable Practices

One of the biggest reasons that companies want to implement more sustainable practices into their supply chains and make changes to the way they source goods is that consumers are demanding more transparency. According to the 2015 Cone Communications/Ebiquity Global CSR Study, nine out of 10 consumers expect companies to operate responsibly and do more than make a profit. Additionally, 84 percent of consumers say that they actively seek out products that are sourced sustainably. The study took into account the responses of 10,000 people from the United States, Canada, China, India, and others.

The main way that consumers interact with companies is by purchasing products. Companies cannot overlook what consumers want in terms of sustainable sourcing because consumers may switch brands or boycott a product because of this issue. Businesses that do promote their sustainable sourcing practices are seeing an increase in sales as a result.

Companies Must Improve Their Sustainability

It isn’t easy for companies to make changes to the way they source commodities. This process often means taking an in-depth look at current supply chain practices and adding costs. After all, sustainably sourced commodities usually cost more than other commodities. Increasing costs isn’t generally a goal for most companies, but some see benefits to making the changes.

Corporate responsibility is something that all companies need to address. Looking for ways to source commodities sustainably is an important step in the process. Major corporations need to lead the way to improve the supply chain practice for other companies. As more and more companies demand sustainability, sourcing will become easier and consumers will be more satisfied.[/show_to]

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