Ethical and Sustainable Sourcing

Do you know that about 61% of business leaders believe climate change will significantly impact how they make their business strategies and carry out their operations over the next three years?

Sustainability is one of the most important topics that has been discussed recently. Global warming and climate change are some concerns that cannot be overlooked. As an eCommerce business, it becomes significant for you to abide by these regulations and curate your business strategy accordingly.

Today, for example, you must have observed some instances around you of the same. When you order something from applications like BlinkIt or InstaMart, what do you observe? Well, the packaging of your products is done with paper or degradable plastic.

These kinds of changes are what eCommerce companies are making. Even when it comes to sourcing products, you should always consider ethical and sustainable sourcing as a priority. Why? We are going to discuss this in detail.

In this chapter, we are going to cover these aspects in detail. By the end of this chapter, you will learn about:

Importance of sustainability
Sustainable and ethical sourcing practices and certifications
Marketing sustainability to customers

So, let us proceed with this chapter and understand each aspect of ethical and sustainable sourcing in detail.

What is Ethical and Sustainable Sourcing?

Before proceeding to our discussion, we must have an understanding of ethical and sustainable sourcing. What are these? Ethical sourcing refers to the practice of obtaining products responsibly and sustainably.

Moreover, it is important to consider that the workers involved in making these products have a safe environment around them. Also, they must be treated fairly, and the products should be sourced keeping environmental and social impacts in consideration.

On a similar page, sustainable sourcing refers to the practices that refer to the long-term availability of resources keeping in consideration that environmental impact is minimized and social well-being is supported.

For example, there are so many instances where we see workers manufacturing products in unhygienic conditions. It affects their health and is completely against ethical sourcing. We, as eCommerce entrepreneurs, should ensure that this is not happening at the place from where we are sourcing the products from.

What is the Importance of Sustainability?

Now, you must be thinking about why sustainability is so important for your eCommerce product sourcing. What advantages does it offer to your eCommerce business? Why should you be looking forward to ethical and sustainable sourcing? Let us understand.

Increasing Consumer Awareness

Think of yourself as a customer for a while. After getting to know about the positive impacts of sustainability, will you not demand sustainability and ethical sourcing from the brands you shop with? You will, right?

Do you know that about two-thirds of customers are willing to pay more for sustainable products? So, we see that more customers are demanding transparency and ethical practices from brands. Hence, if you want to be a priority as a brand for customers, embracing ethical and sustainable sourcing is for you.

Regulatory Compliance and Trust

Today, we see that various government organizations across the world have put clear regulations and guidelines that businesses have to follow. So, if you want your eCommerce business to run smoothly, following these practices is the right choice.

Moreover, these regulations are set with the intention of checking the environmental impact and enabling good labor practices in the industry. Also, as we discussed above, following ethical practices builds a sense of trust and loyalty among customers and they would also prefer you.

Environmental Impact

When following sustainable sourcing practices, you are making a good impact on the environment. Today, we see how everyone is talking about reducing carbon footprint, waste, and even pollution. So, by following these practices, you are contributing to the cause in so many aspects.

Some prominent examples among us are brands like H&M and Adidas. Adidas claims to make 9 out of 10 products sustainable by the year 2025 and be climate-neutral by 2030. On the other hand, H&M is already using recycled materials and aims to use recycled or more sustainable materials by 2030.

Sustainable and Ethical Sourcing Practices and Certifications

So, now as an eCommerce entrepreneur, are there some key practices that you can follow? Other than these, are there any certifications and standards that are important for you to consider while sourcing products? Well, let us talk about them one by one in detail.

What are Some Ethical Sourcing Practices to Follow?

The following are some points that you should be following when it comes to sustainable and ethical sourcing:

You need to consider supply chain transparency at all times. Where are your products coming from? What are the conditions in which they are being made? An example of this can be Nike’s interactive map that shows factory locations and details.
Always prefer sourcing products that use sustainable materials during the manufacturing process. These materials can be organic, recycled, or even biodegradable. A prominent example of this is Adidas manufacturing shoes from recycled ocean plastic.
Minimize waste during production and packaging. Make this as one of your primary targets to achieve. The waste that is produced during manufacturing and packaging is a primary concern for the environment. Aim to keep it minimal. One famous example of this is Unilever’s commitment to reducing waste in its production process.

Certifications and Standards to Consider

The following are the standards or certifications you should consider when looking forward to ethical and sustainable sourcing:

Global Certifications and Standards

Fair Trade Certification: Fair Trade certification showcases that the products were made under fair working conditions, keeping fair wages for workers and maintaining sustainable practices. Different products are covered under this such as coffee, chocolate, and handicraft.

Certified B Corporation (B Corp): Companies with this certification meet high standards of social and environmental performance, accountability, and transparency. It applies to businesses across various industries that strive to balance profit and purpose.

OEKO-TEX® Standard 100: This certification is specific to the textile industry, ensuring that products are tested for harmful substances and are safe for human use. It covers all stages of production, including the raw materials used.

Forest Stewardship Council (FSC): The FSC certification promotes responsible management of the world’s forests, ensuring that products like wood and paper are sourced sustainably.

Rainforest Alliance Certified: This certification supports sustainable agriculture, forestry, and tourism practices, focusing on environmental protection, social equity, and economic viability.

Global Organic Textile Standard (GOTS): GOTS ensures that textiles are made from organic fibers and that the processing meets environmental and social criteria.

ISO 14001: This standard provides guidelines for environmental management systems, helping organizations improve their environmental performance.

Indian Certifications and Standards

India Organic Certification: This certification ensures that products comply with the National Standards for Organic Products set by the Government of India.

Ecomark: An eco-labeling scheme by the Bureau of Indian Standards (BIS) that identifies environmentally friendly products.

GreenPro Certification: Issued by the Indian Green Building Council, this certification assesses the sustainability of products and equipment used in the building industry.

Fairtrade India: Similar to the global Fair Trade certification, Fairtrade India ensures fair wages and ethical practices in production.

Marketing Sustainability to Customers

Today, when you talk about sustainability to customers, there might be mixed reactions for the same. But, do you know about 73% of customers say that they are going to change their consumption habits to be more environmentally friendly?

So, when you, as an eCommerce business, are taking this initiative, it becomes important that you market this to your customers as well. How can you do that? By following these simple habits, you can make a big difference:

Make sure that you are communicating your efforts to the customers. Keep a sense of transparency and honesty in all of your marketing campaigns. We see that some brands they say are chemical-free. But are they? So, as a brand make sure that you stay honest with your customers.
The next important thing is highlighting certifications. To build clients’ trust and reliability in your product, use recognized certifications in product labeling and marketing for trust building.
Storytelling is one of the most effective ways to tell people about your sustainability journey and the positive impact it has brought to your business.
Involve customers in sustainability efforts, such as recycling programs or eco-friendly initiatives.

We need to take care of our mother Earth. So, why not take the initiative through your eCommerce business?

Crucial Takeaways from this Chapter

Ethical and sustainable sourcing is crucial for eCommerce businesses, emphasizing responsible practices and fair treatment of workers.

Embracing sustainability can enhance customer loyalty and compliance with regulations, while positively impacting the environment.

Leading brands like Adidas and H&M set examples by committing to sustainable practices and using eco-friendly materials.

Key certifications like Fair Trade, B Corp, and OEKO-TEX® Standard 100 ensure products are made responsibly and safely.

Marketing sustainability to customers builds trust and showcases your brand’s commitment to ethical practices and environmental stewardship.

5. Ethical and Sustainable Sourcing – Important Things to Know