Aside from basic ethical conduct, there are further ethical aspects of sustainability that apply to the supply chain. The terms “ethical” and “fair trade” are frequently used interchangeably with “sustainable” and “green.” As people become more aware of how supply chains operate, consumers and other supporters are pressuring companies to take responsibility for the actions of their suppliers and subcontractors.
Definition of Ethical Sourcing
The responsible and sustainable sourcing of products and services, which takes into account the minimal environmental impact and the fair and safe treatment of workers during the sourcing process, is known as ethical sourcing. In today’s world, consumers are increasingly dissatisfied with companies that source goods without considering the working conditions of employees across the supply chain or their environmental impact. Therefore, procurement plays an important role in shaping public perception of a company’s corporate citizenship.
Examples of Ethical Sourcing
Examples of ethical sourcing concerns include the following:
- Working conditions, such as child labor, wages and benefits, working hours, forced labor, health and safety, freedom of association, harassment and discrimination
- Environmental concerns, such as sourcing of conflict minerals, deforestation, improper handling and disposal of hazardous materials
- Community involvement, such as volunteer activities, hunger/poverty/disease assistance, disaster relief efforts
- Business management, such as safe material acquisition, general product safety, traceability processes, diversity
Nongovernmental Organizations
Organizations outside of the government, known as NGOs, including Greenpeace, the World Wildlife Fund, and Amnesty International, play an active role in monitoring the supply chain practices of corporations around the globe. They hold significant power in terms of media coverage, raising public awareness, and exerting pressure on corporations to adopt ethical behavior.
NGOs – A legally constituted organization that operates independently from any government and is usually applied only to organizations that pursue some wider social aim with political aspects, but that are not overtly political organizations.
There are currently more than 1.5 million NGOs operating in the USA alone, and an estimated 10 million across the globe.