1. Sourcing Sustainably Puts You Ahead of the Competition
You might already have a good handle on the sustainability of your own operations, like reducing emissions within your company. But if you’re not tracking the emissions produced by your suppliers or those created when distributing your products, you could be missing out on big opportunities to improve your sustainability efforts.
While some businesses are focusing on reducing emissions within their own operations, very few are looking at the emissions created across their entire supply chain (known as Scope 3). However, smart companies are starting to invest in tools that help them source more sustainably, recognizing that sustainability is no longer optional – it’s key to staying competitive in today’s market.
2. Appeal to Customers Who Prioritize Sustainability
There’s growing consumer demand for businesses to be more sustainable, especially among younger generations who are actively choosing brands that align with their values. Companies that embrace sustainability are not only cutting costs but also attracting more customers who prioritize eco-friendly products and services.
3. Forge Stronger Partnerships With Your Suppliers
Tracking your supply chain’s emissions is also a chance to strengthen relationships with your suppliers. By working together to reduce emissions, you can turn traditional buyer-supplier relationships into true partnerships. This means collaborating to find better ways to operate, making sustainability a shared goal for everyone involved.
While sustainable sourcing offers many benefits, it also presents some challenges that businesses must address to ensure successful implementation. Here are some of the key challenges:
1. Cost and Investment
Transitioning to sustainable sourcing often requires upfront investment. Whether it's adopting new technologies, sourcing eco-friendly materials, or conducting supplier audits, these efforts can lead to higher costs in the short term. For businesses with tight budgets, this can be a significant challenge. However, long-term cost savings and improved efficiencies often make these investments worthwhile.
2. Complex Supply Chains
Many businesses have extensive and complex supply chains, making it difficult to trace every step of the production process. Ensuring that all suppliers meet sustainability standards can be time-consuming and resource-intensive, particularly when dealing with suppliers in different regions or industries. Building transparency and traceability in such a complex system takes significant effort and collaboration.
3. Limited Supplier Options
Not all suppliers have adopted sustainable practices, and businesses may struggle to find suppliers that align with their sustainability goals. In some industries, there may be limited options for eco-friendly or ethically produced materials, forcing companies to either compromise on certain standards or invest in developing new supplier relationships.
4. Measuring Sustainability Impact
Tracking and measuring the impact of sustainable sourcing can be difficult. Companies need to rely on accurate data to assess their environmental and social performance, which is not always easy to obtain. Additionally, measuring long-term benefits like reduced environmental impact or improved social responsibility can be complex and require consistent monitoring.
5. Regulatory and Compliance Issues
Businesses operating in multiple countries may face differing regulations regarding environmental and social standards. Navigating these regulations and ensuring compliance with local laws can add to the complexity of sustainable sourcing efforts. Non-compliance can lead to legal and financial risks, making it crucial to stay updated on global standards and ensure that suppliers do the same.