What does Sustainable Sourcing Look Like in the FMCG Industry? 

One prominent strategy within this call-to-action is “sustainable sourcing,” sometimes referred to as “responsible sourcing.” What does this concept look like in the FMCG landscape, and why is it so important?

In FMCG, sustainable sourcing is the practice of procuring goods or services throughout the supply chain in a manner that respects the trifecta of sustainability—environmental, social and economic standards. It entails examining every step of a product’s lifecycle, from the procurement of raw materials to the use phase and the end-of-life phase of that product (it’s disposal, recycling, re-use or repurposing), and ensuring compliance with sustainability norms at each stage.

Here are the pillars that form the structure of sustainable sourcing in FMCG:

Environmental Sustainability

This component is about reducing the ecological footprint of a product or service at every stage of its lifecycle. For FMCG businesses, it might involve sourcing materials or components that are renewable or have a reduced carbon footprint, adopting production methods that limit waste and designing products with their eventual recycling or environmentally-friendly disposal in mind.

Social Sustainability

This pillar ensures that FMCG products are created under humane working conditions. It involves ensuring worker rights, advocating for fair trade and eliminating any instances of child or forced labor or other exploitative practices from the supply chain.

Economic Sustainability

This dimension deals with creating sustainable economic value for all stakeholders in the FMCG supply chain. It means offering fair remuneration to suppliers, upholding ethical business practices and contributing positively to local economies. Also, it involves sourcing high-quality products that meet consumer expectations, thereby ensuring customer satisfaction and loyalty.

As consumers increasingly align their purchasing decisions with their values, FMCG companies practicing sustainable sourcing enjoy enhanced customer loyalty, a stronger brand reputation and increased market share. Additionally, sustainable sourcing offers companies a robust risk mitigation strategy, helping to navigate regulatory, reputational and supply chain risks by encouraging stability and resilience. By supporting FMCG companies that value sustainable sourcing, consumers wield the power to influence a more responsible and sustainable global marketplace. 

The conversation is rapidly moving from “why sustainable sourcing?” to “how can we source more sustainably?” Sustainable sourcing can help FMCG businesses achieve their goals of making their business activities and product impact the world in a more positive way.

ADEC Innovations

ADEC Innovations’ environmental, social and governance (ESG) business advances sustainable practices around the world and helps organizations responsibly grow and operate.