The supply chain dynamics have transformed a great deal. Customers expect much more than just quality. When they buy from a brand, they expect a full guarantee that the products they buy are made responsibly. A study revealed that 60% of consumers globally consider sustainability to be an important purchasing factor.
Despite the long-term advantages of sustainable product sourcing, achieving it is not simple. High prices, limited supplier options, and the possibility of false sustainability claims are just a few of the many difficulties that businesses face. These issues often arise in sectors including hospitality, fashion, and furniture as they strive to achieve sustainable objectives while maintaining efficiency in operations.
In this article, we’ll explain the lesser-known challenges of sourcing sustainable products and share actionable strategies to help businesses source products responsibly.
What is a Sustainable Product?
A sustainable product is one that you create with minimal harm to the environment. Sustainability demands that during the production process you respect ethical labor practices. This approach ultimately results in long-term business stability.
Business owners also adopt sustainable sourcing to build trust in the competitive market. Key characteristics of sustainable products include:
- Eco-Friendly: Made from renewable, recyclable, or biodegradable resources.
- Energy Efficient: Produced using methods that reduce energy consumption.
- Fair Labor Practices: Manufactured under ethical working conditions. This includes providing fair wages to the laborers. Plus the working environment also has to be safe.
- Durability: Built to last longer and of more robust quality. Consequently, there’s a lesser need for frequent replacements.
The Role of Sustainable Products in Modern Businesses
Sustainable items now make up a sizable percentage of business activities. That is why businesses place greater value on satisfying customer requirements and showcasing a dedication to sustainability than they do on merely manufacturing things.
According to a First Insight report, 62% of Gen Z consumers prefer to purchase from companies that prioritize sustainability. This implies that companies that provide environment-friendly goods can draw in younger clients who value making ethical decisions.
Major Challenges in Sourcing Sustainable Products
Although it is important if your business projects itself as eco-friendly, sourcing sustainable products isn’t easy. It takes a lot of effort and time. Business owners encounter many challenges like high prices of goods and complex supply chains. These make it hard to adopt green practices on a large scale.
We’ll discuss the actual difficulties companies face when attempting to find sustainable products.
Limited Availability of Suppliers
Finding vendors who follow ethical and environmental guidelines is one of the most challenging aspects of sustainable procurement. Because there aren’t enough certified providers in several regions, businesses have fewer options. Costs may also increase and this can result in more competition in the market.
Higher Costs of Sustainable Materials
Sustainable materials often cost more than regular ones. This is because they are harder to find, and require special certifications. These increased costs may be problematic, particularly for small companies with limited resources. Businesses’ efforts to go green may be pushed back when they are forced to choose between being profitable and environmentally favourable.
Complexity of Verifying Supplier Claims
Making sure suppliers follow sustainable practices is a big challenge. Some suppliers might lie about being eco-friendly, which is called greenwashing. A study by TerraChoice found that over 95% of products labeled as sustainable had false or unclear claims.
Checking if suppliers are truthful takes a lot of work. It needs audits, certifications, and constant monitoring, which can be expensive. Because sustainability regulations and certifications vary by area, it becomes even more difficult for multinational corporations to adjust as per local rules.
Disruptions to the Supply Chain and Logistics Problems
Because supply networks tend to be complex, obtaining sustainable products can be challenging. Problems like long shipping routes, different local rules, and poor infrastructure can make it hard to get materials on time. For example, a survey report by Sedex shows that 37% of businesses are not familiar with sustainability-related regulations.
These problems don’t just cause delays; they also make commodities more expensive. To fix these problems, businesses can try getting materials locally to cut down on travel time and risks. Using smart tools like IoT tracking systems can also help them monitor their supply chains closely.
How to Overcome Challenges in Sustainable Sourcing
Making sustainable B2B sourcing work needs a good plan. Some steps mentioned below can help businesses turn problems into growth opportunities while staying ethical.
Work Closely with Suppliers
Working with suppliers is important to make sure your supply chain is both reliable and eco-friendly. Building strong connections helps everyone stick to sustainability goals and improves the whole process.
How to Work Better with Suppliers:
- Close Monitoring: Regularly review how your suppliers are doing to make sure they meet your sustainability standards.
- Set Clear Goals: Work with suppliers to agree on goals that are specific and easy to track.
- Provide Resources: Offer training, tools, or rewards to support suppliers in using sustainable methods.
For example, IKEA works with suppliers by offering rewards for using renewable energy. This lowers emissions and ensures suppliers follow sustainable practices. Strategic partnerships with suppliers build trust and keep your supply chain stable with eco-friendly materials.
Adopt Technology for Transparency
Technology can solve problems like checking supplier claims and making supply chains easier to monitor. Tools like blockchain and IoT help businesses track materials from the start to the finished product, making sure they meet sustainability goals.
Ways Technology Can Help:
- Blockchain: This creates a secure, unchangeable record of transactions. Blockchain shows where materials come from and prevents false claims about sustainability. A report by Havas says 71% of people are willing to pay more for brands that use blockchain to prove they are transparent.
- IoT Devices: These monitor location and storage conditions, assisting companies in identifying issues and maintaining supply chain operations.
Educate Stakeholders on Sustainability Goals
Getting everyone on the same page is essential to sustainable sourcing. Explain the importance to your staff and demonstrate how they may contribute. Collaborate with suppliers to achieve your objectives, and let clients know about your intentions so they understand the impact you’re having.
Steps to Align Stakeholders:
- Educate Your Team: Make sure your employees understand what sustainability means and how they can help. Train them on the steps your company is taking to protect the planet.
- Work with Suppliers: Help the people you buy from understand your goals. Provide them tools and training to meet your sustainability standards.
- Engage with Your Customers: Be open about what you’re doing for the environment. Sharing your efforts builds trust and loyalty.
For example, Patagonia gets its employees and suppliers involved in environmental projects. This creates a strong culture of responsibility that customers really connect with.
The Benefits of Tackling Sourcing Challenges
Sustainable sourcing comes with challenges, but solving them brings big benefits for businesses. Let’s look at how fixing these problems can make a real difference.
Increased Brand Reputation
Fixing end to end sourcing problems helps businesses earn trust from customers who care about social and environmental issues. Today, people want brands to show they care about the planet and are honest about how they operate. This connection leads to loyal customers, more sales, and better chances they’ll stick around.
Long-Term Cost Savings
Although it may initially cost more, adopting sustainable sourcing ultimately results in cost savings. Businesses identify methods to improve productivity and save money by addressing issues like waste and sluggish operations.
For instance, an Accenture analysis claims that automotive businesses who use circular supply chains can improve profitability 1.5 times along the value chain. Reusing and recycling resources rather than always purchasing new ones results in these savings.
Compliance with Global Regulations
Following global sustainability rules is becoming more important for businesses. Governments are implementing new laws to cut down on environmental harm and encourage fair practices. More than just following the rules, meeting international sustainability goals can lead to new markets exploration, grants, and investment chances. This smart approach makes businesses stronger in the market and builds trust.
Conclusion
Sustainable sourcing is no longer just an option in modern times, it is a vital component of doing business sustainably. Issues like rising costs, less suppliers, and complicated supply chains can present major barriers, but they also present opportunities for growth and innovation.
The future of sustainable sourcing is being shaped by emerging concepts like circular supply chains. To cut down on waste, these emphasize recycling and material reuse. Blockchain and artificial intelligence are enhancing procurement procedures by increasing their efficiency and transparency. Renewable energy in supply chains is also growing. It helps cut carbon emissions and supports global climate goals.
Sustainable practices go beyond meeting consumer demands. They are key to building a thriving and responsible future.
Legacy Worldwide is your ultimate partner in simplifying sustainable sourcing. Our customized solutions help resolve complex sourcing challenges. From streamlining supplier relationships to the use of advanced technology for adhering to sustainability standards, we handle it all. With Legacy Worldwide as your trusted ally, you can establish a sustainable footprint.
Sources
- (38 Eco-Friendly Consumers Statistics & Trends: A Must Know in 2024 – Business Dasher)
- (The State of Consumer Spending – First Insight)
- (Study: 95% of Green-Marketed Products Utilize Misleading Claims – Architect Magazine)
- (40% of procurement leaders ignoring sustainability, study reveals – SCMR)
- (Havas’ Meaningful Brands report 2021 finds we are entering THE AGE OF CYNICISM – Havas)
- (Driving Ambitions: The Business Case for Circular Economy in the Car Industry – Accenture)
