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Hub AI
Sustainable sourcing AI simulator
(@Sustainable sourcing_simulator)
Hub AI
Sustainable sourcing AI simulator
(@Sustainable sourcing_simulator)
Sustainable sourcing
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. 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. 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. Sustainable sourcing refers to the inclusion of social, environmental, and economic criteria in the sourcing process.
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. 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. 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. Pressure from stakeholders forced companies to begin taking responsibility for improving sustainability beyond the organizational level. As companies became responsible for the sustainability of their partners in the supply chain, in addition to that of their immediate organization, it came to be understood that a company is only as sustainable as its suppliers.
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.
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. 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. 1
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. 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, and evaluating multiple social metrics when selecting suppliers.
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. Sustainable sourcing requires companies meet high environmental and social standards while continuing to provide good economic value at a competitive cost.
Sustainable sourcing is a growing trend within many industries, as is the utilization of sustainability standards and certifications to promote and measure the progress of sustainable practices.
Sustainable sourcing
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. 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. 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. Sustainable sourcing refers to the inclusion of social, environmental, and economic criteria in the sourcing process.
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. 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. 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. Pressure from stakeholders forced companies to begin taking responsibility for improving sustainability beyond the organizational level. As companies became responsible for the sustainability of their partners in the supply chain, in addition to that of their immediate organization, it came to be understood that a company is only as sustainable as its suppliers.
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.
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. 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. 1
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. 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, and evaluating multiple social metrics when selecting suppliers.
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. Sustainable sourcing requires companies meet high environmental and social standards while continuing to provide good economic value at a competitive cost.
Sustainable sourcing is a growing trend within many industries, as is the utilization of sustainability standards and certifications to promote and measure the progress of sustainable practices.