What to choose: Responsible Sourcing, Sustainable Sourcing or Ethical Sourcing?

Speaking with people responsible for purchasing supplies and for procurement in various organizations, I realize that there is some confusion between these three concepts and that they are used incorrectly in some cases. Let's try to clarify this.

Of course, it is all about sourcing supplies, but there is a huge difference between the three terms, and they should not be interchanged. The issues and implications for an organization that claims ethical sourcing rather than responsible sourcing are not the same and reputational risks can arise leading to greenwashing allegations.

In fact, each term indicates a different level of commitment and engagement towards the actors of the supply chains and the sustainability issues that we can find.

Let's briefly define each term and what level of commitment and engagement it involves.

We can define Responsible Sourcing as a voluntary commitment to take social and environmental considerations into account when managing supplier relationships. It is a commitment to open a dialogue with its direct suppliers by indicating the social and environmental issues that matter to the organization. This very often materializes in the adoption and sharing of a code of conduct for suppliers.

Sustainable sourcing incorporates practices that actively generate social and environmental goods beyond laws and standards, with a longer-term vision of continuity, conservation of resources and empowerment of supply chain actors. It is a commitment that goes beyond direct suppliers and involves tangible actions and the evaluation of their impacts.

Ethical Sourcing ensures that products and materials purchased are sourced responsibly and sustainably throughout the supply chain. It also involves responding immediately to problems when they are identified. It is a commitment to be proactive and an openness to work with all stakeholders to find solutions to address important environmental and social issues.

Once the three concepts are explained, we realize that there is a gradation, stages. We move from compliance to delivering positive impacts.

Most organizations will start by adopting a Responsible Sourcing policy and then migrate to a Sustainable Sourcing policy. Few organizations will reach the stage of Ethical Sourcing.

Because organizations should walk the talk, it is extremely important not to confuse the different levels of engagement.

In order not to tarnish your brand’s image, you must at all costs avoid the situation where your performance does not meet the expectations you have yourself created.

For a growing number of organizations, working to improve social and environmental performance in supply chains has become a natural extension of their commitment to corporate responsibility and, as such, is part of their global business model.

The benefits of these three sourcing models are:

• Better manage supply chain risks and build long-term relationships with suppliers,
• improvement of social and environmental performance,
• create a competitive advantage, especially in sectors where production is largely outsourced, such as garment, cosmetics, electronics, and food products.

Of course, the benefits for an organization increase with the depth of the approach and the more it moves towards ethical sourcing.  So are the investments and changes required.

I hope these clarifications will help you adopt the strategy that suits your business model.