Achieving sustainability is impractical without managing all aspects of life cycle. The article reflects on the progression of sustainability dialogue in the corporate setting from the traditional CSR construct to the emerging field of sustainable sourcing.
Corporates and industries are increasingly adopting measures to demonstrate their concern and commitment towards environment and society. Typically corporates have showcased their CSR (Corporate Social Responsibility) initiatives on issues such as environment protection and health awareness programs as indicative of them being a responsible corporate citizen. However, with time the social responsibility construct expected from businesses is changing to encompass comprehensive life cycle management of their products and services. In this light, sustainable sourcing has emerged as a key dimension alongside traditional CSR to measure and track sustainability initiatives.
Corporate Social Responsibility (CSR) aims to achieve overall sustainability considering the economic, ecology and social aspects so as to maximise and safeguard “profit, planet, and people”. Traditionally CSR emerged as a form of corporate self-regulation integrated into a business model.
Over the years, such corporate initiatives have matured and are now expected to align and report to the Triple Bottom line concept. (TBL) The Triple Bottom line concept captures the range of values and criteria for measuring organizational success & sustainability performance.
Increasingly communities in which businesses operate and other stakeholders are expecting a more rigorous standard of adherence and coverage. This is getting manifested in the form of introducing these filters across the life cycle of a firm’s activities.
A comprehensive new ISO Standard on CSR, ISO 26000 incorporating these aspects is in stages of finalization and expected to be launched by end 2010.
A key starting point is sourcing and harnessing building blocks and materials in a sustainable fashion – sustainable sourcing intends to take care of the same. Sustainable Sourcing refers to sourcing of material or service in a ethical, environmental friendly and social manner. Historically these upstream activities have by and large been outside the purview of regular CSR or sustainability initiatives. However as the clamour for large and multi-national corporate support for sustainable development has increased, it has catalyzed greater gravitas and action on the aspect of sustainable sourcing.
Many corporate and industries are incorporating the sustainable sourcing practises into their business model depending on demand from their consumer and/or other stakeholders. The term sustainable sourcing is interchangeably used with Sustainable purchasing, Green Purchasing, Responsible Purchasing and Ethical Purchasing by the firms to produce good or services.
Growing awareness and ethical buying amongst consumers in some of the developed markets has triggered policy and regulations aimed at catalyzing Sustainable Sourcing of products and services. Many European nations and the United States have developed policies such as the Fair trade policy to prevent use of/or trade products which are un-ethically sourced so as to prevent/ minimise exploitation of humans, animals and the natural environment.
A few leading brands have also started adopting and promoting sustainable sourcing practices alongside their CSR initiatives like Unilever (Business Partner Code), M&S (Supplier Exchange), Walmart (Supply Chain mapping), Himalaya Salt, McDonalds, etc.
India is a preferred supplier for Engineering, Automotive, Apparel, R&D, Pharma, Machinery, BPO, IT etc. The changing ideology and mindset is forcing and at the same time encouraging the Indian firms to incorporate sustainable sourcing and reporting in their business model.
While some significant strides have been made in these past few years, sustainable sourcing initiative is still at a nascent stage, and is expected to scale up further as consumer awareness and international trade imperatives build up in the days ahead.
References:
- http://www.iso.org/iso/pressrelease.htm?refid=Ref1321
- Wood, D. (1991) Corporate Social Performance Revisited. The Academy of Management Review, Vol. 16, No. 4 (Oct., 1991) http://www.jstor.org/stable/258977
- Brown, D., J. Dillard and R.S. Marshall. (2006) "Triple Bottom Line: A business metaphor for a social construct." Portland State University, School of Business Administration. Retrieved on: 2007-07-18
- Data Monitor. Corporate Social Responsibility in UK Retail. Accessed at: http://www.datamonitor.com/store/Product/corporate_social_responsibility...
- Claire Rowan. 27 March 2009. Sustainable sourcing – a future imperative. Food & Bevrages Magzine. Accessed at: http://www.foodbev.com/article/sustainable-sourcing-a-future-imperative
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