From farm to ship: Sustainable sourcing in the supply chain

In today's rapidly evolving world, sustainability is no longer a mere buzzword; it's a fundamental aspect of supply chain management. At DHL Express New Zealand, we recognise the critical role that sustainable sourcing plays in preserving our planet for future generations. Thus, this blog delves into the intricacies of ethical and sustainable sourcing, highlighting the importance of selecting suppliers committed to sustainability.

Join us as we navigate the complexities of ethical sourcing, renewable and sustainable energy, and DHL Logistics's role in facilitating express delivery while adhering to the highest sustainability standards. 

Definitions and meanings

To begin the exploration of the green supply chain, we will unpack the meaning behind terms like ‘ethically sourced’ and ‘sustainably sourced’. 

‘Ethically sourced’ means obtaining products or supplies responsibly. It focuses on protecting the environment and ensuring worker safety and fairness in every production stage. Some factors to consider may encompass the quality of working conditions, the absence of bribery or corruption, and ensuring that employees receive a wage sufficient for a decent living.

‘Sustainably sourced’ refers to considering more than just financial factors in procurement processes. It implies that all ingredients, products or materials are obtained from environmentally and socially responsible practices. From a broader business context, this means avoiding short-term gains from destructive processes that might result in long-term environmental consequences, such as soil degradation or deforestation.

Overall, ‘ethically sourced’ and ‘sustainably sourced’ prioritises the well-being of stakeholders and long-term environmental wellness over immediate profits.

Benefits of choosing ethical and sustainable suppliers

Incorporating ethical and sustainable suppliers into your supply chain brings several advantages beyond environmental conservation. Here, we outline the benefits of partnering with such suppliers.

1. Cost savings

According to an EY Teams survey in 2022, cost savings and efficiency were top motivators for 61% of surveyed companies and supply chain executives to move towards practices like working with sustainable suppliers. Choosing sustainable suppliers might not seem like an obvious way to save money, but it can lead to substantial cost savings over time. These suppliers typically use methods that reduce waste and rely on renewable energy, which can cut operational costs and boost efficiency. As environmental regulations and carbon taxes tighten, partnering with sustainable suppliers can also help avoid potential fines and extra charges.

2. Risk mitigation

By ensuring your suppliers adhere to strict environmental and social standards, you can safeguard your business from potential legal liabilities and risks associated with regulatory compliance, supply chain disruptions, or public backlash. This proactive approach helps you maintain a stable supply chain while demonstrating your company's commitment to responsible business practices that are transparent and reliable. This can be a significant advantage against competitors in today's market, allowing you to reach out to forward-looking investors and like-minded partners or clients.

3. Brand reputation

A solid commitment to sustainability can significantly enhance your business reputation and elevate your brand in the eyes of discerning consumers. In an era where people are increasingly mindful of ethical practices, aligning with sustainable suppliers bolsters brand reputation, increases consumer trust, and fosters long-term customer loyalty, thereby driving business growth.

How to choose sustainable suppliers

Selecting an ethical and sustainable supplier involves considering various criteria that align with your business goals while minimising environmental and social impacts. Here, we discuss essential criteria for evaluating suppliers and strategies for identifying and selecting sustainable partners.

Selection criteria and requirements for evaluating suppliers

To assess a supplier's commitment to environmental and social sustainability, consider the following selection criteria and requirements:

• Business alignment: Ensure the supplier shares your vision and values by reviewing their policies and awards or conducting interviews and site visits.

• Certifications: Suppliers with recognised certifications, such as ISO 14001, Fair Trade, or Rainforest Alliance, demonstrate their adherence to specific environmental or social standards.

• Third-party audits: Suppliers that undergo regular third-party audits indicate a commitment to transparency and accountability, ensuring their practices align with sustainability standards.

Strategies for identifying and selecting suitable suppliers

Implementing the following strategies can help you identify and select the most sustainable suppliers for your business:

• Supplier surveys: Conducting surveys allows you to gather information on potential suppliers' sustainability or ethical practices, which can be used to compare and evaluate their performance.

• Innovation and improvement: Evaluate the supplier's commitment to innovation and continuous improvement by examining their research, development activities, and participation in industry initiatives.

• Supplier scorecards: Develop a supplier scorecard that measures and tracks key performance indicators (KPIs) related to environmental and social sustainability. This tool can help you quantify and benchmark suppliers' performance, making sourcing the most sustainable option easier.

Start your sustainability journey with DHL Express