Sustainable sourcing: Difference between revisions
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Globalization of supply chains and pressure to lower production costs have negatively impacted environments and communities around the world, especially in developing nations where production of high demand goods is increasingly taking place[1]. Since the 1990s, awareness of these negative impacts has grown, leading stakeholders to push companies to take responsibility and actively work to improve the sustainability of their supply chains.[2] It has come to be understood that a company is only as sustainable as the start of its supply chain, bringing about the need for sustainable sourcing.[3] Sustainable sourcing refers to the inclusion of social, environmental, and economic criteria in the sourcing process.[4]
Background
Sustainable sourcing finds its roots in the concept of Corporate Social Responsibility (CSR), which gained popularity in the United States in the 1970s and internationally in the 1990s. CSR has evolved over time from a philanthropy-based strategy for responding to consumer concerns, to a decision-making process that takes into consideration the various facets of a company’s impacts.[5] CSR came to include environmental responsibility in the 1990s with the introduction of John Elkington’s “Triple Bottom Line”, which highlighted the responsibility businesses have to the environment, in addition to their economic and social responsibilities.[6] Since the introduction of the triple bottom line, sustainability has become an important topic for most organizations.
In the past, companies were often able to separate themselves from unsustainable and unethical practices within their supply chains, as long as their internal practices were considered to be sustainable. Supply chain scandals such as child labor in Nike factories in the 1990s, use of toxic lead paint in Mattel toys in the early 2000s, and more recently the collapse of a factory linked to Primark in Bangladesh, however, have worked to increase awareness of unsustainable supply chain behaviors.[7] Pressure from stakeholders forced companies to begin taking responsibility for improving sustainability beyond the organizational level.[8] As companies became responsible for the sustainability of their partners in the supply chain, in addition to that of their immediate organization,[7] it came to be understood that a company is only as sustainable as its suppliers.[3]
Defining sustainable sourcing
Sustainable sourcing can be defined as obtaining the materials, products, and services an organization needs from its suppliers in a manner that is socially and environmentally responsible, while still being economically sound.[2]
Environmentally responsible
Supply chain activities mainly impact the environment in two ways: natural resource depletion and/or production of harmful pollutants. These impacts have further implications for the natural world, leading to biodiversity loss, habitat destruction, soil degradation, and disruption of natural cycles.[9] To mitigate these impacts and meet the 'environmentally responsible' component of sustainable sourcing, a company may take steps such as requiring suppliers to use certain materials, and evaluating various environmental metrics when selecting suppliers.[2]
Socially responsible
Supply chains activities also have a social dimension. Companies often fall short in ensuring fair treatment and safe working conditions for workers, especially in developing countries where a large portion of production happens.[9] Furthermore, previously mentioned environmental impacts also have health and wellbeing implications for communities. To mitigate these impacts and meet the 'socially responsible' component of sustainable sourcing, a company may take steps such as mandating labor standards among suppliers[10], and evaluating multiple social metrics when selecting suppliers.[2]
Economically sound
In traditional sourcing practices, the focus is put on getting the best quality product possible at the most reasonable price, with little consideration given to the impacts of producing such a product.[9] Sustainable sourcing requires companies meet high environmental and social standards while continuing to provide good economic value at a competitive cost.[3]
References
- ^ Osland, Joyce S. (2016-07-22). "Broadening the Debate: The Pros and Cons of Globalization". Journal of Management Inquiry. doi:10.1177/1056492603012002005.
- ^ a b c d Lambrechts, Wim (2020), Leal Filho, Walter; Azul, Anabela Marisa; Brandli, Luciana; Özuyar, Pinar Gökcin (eds.), "Ethical and Sustainable Sourcing: Towards Strategic and Holistic Sustainable Supply Chain Management", Decent Work and Economic Growth, Cham: Springer International Publishing, pp. 1–13, doi:10.1007/978-3-319-71058-7_11-1, ISBN 978-3-319-71058-7, retrieved 2021-03-03
- ^ a b c Schneider, Lena; Wallenburg, Carl Marcus (2012-12-01). "Implementing sustainable sourcing—Does purchasing need to change?". Journal of Purchasing and Supply Management. Sustainable Procurement. 18 (4): 243–257. doi:10.1016/j.pursup.2012.03.002. ISSN 1478-4092.
- ^ Pagell, Mark; Wu, Zhaohui; Wasserman, Michael E. (2010). "Thinking Differently About Purchasing Portfolios: An Assessment of Sustainable Sourcing". Journal of Supply Chain Management. 46 (1): 57–73. doi:10.1111/j.1745-493X.2009.03186.x. ISSN 1745-493X.
- ^ Latapí Agudelo, Mauricio Andrés; Jóhannsdóttir, Lára; Davídsdóttir, Brynhildur (2019-01-22). "A literature review of the history and evolution of corporate social responsibility". International Journal of Corporate Social Responsibility. 4 (1): 1. doi:10.1186/s40991-018-0039-y. ISSN 2366-0074.
{{cite journal}}: CS1 maint: unflagged free DOI (link) - ^ Kim, Seongtae; Colicchia, Claudia; Menachof, David (2018-11-01). "Ethical Sourcing: An Analysis of the Literature and Implications for Future Research". Journal of Business Ethics. 152 (4): 1033–1052. doi:10.1007/s10551-016-3266-8. ISSN 1573-0697.
- ^ a b Veit, Claire; Lambrechts, Wim; Quintens, Lieven; Semeijn, Janjaap (2018). "The Impact of Sustainable Sourcing on Customer Perceptions: Association by Guilt from Scandals in Local vs. Offshore Sourcing Countries". Sustainability. 10 (7): 2519. doi:10.3390/su10072519.
{{cite journal}}: CS1 maint: unflagged free DOI (link) - ^ Goebel, Philipp; Reuter, Carsten; Pibernik, Richard; Sichtmann, Christina (2012). "The influence of ethical culture on supplier selection in the context of sustainable sourcing". International Journal of Production Economics. 140 (1): 7–17. doi:10.1016/j.ijpe.2012.02.020.
- ^ a b c Agrawal, Vishal V.; Lee, Deishin (2016), "Responsible Sourcing", Environmentally Responsible Supply Chains, Cham: Springer International Publishing, pp. 71–86, ISBN 978-3-319-30092-4, retrieved 2021-03-03
- ^ Wright, Chris F. (2016-08-01). "Leveraging Reputational Risk: Sustainable Sourcing Campaigns for Improving Labour Standards in Production Networks". Journal of Business Ethics. 137 (1): 195–210. doi:10.1007/s10551-015-2552-1. ISSN 1573-0697.