Sustainable sourcing efforts have been increasing in popularity as industries with large carbon footprints have grown. Organizations have recognized the need to commit to more sustainable practices because population growth, natural resource consumption and climate change cannot be maintained at their current levels. Sustainability "megaforces" will impact every company's performance and profitability within the next 20 years, according to a study from KPMG International. While unsustainable practices could put companies at risk of disruptions and profit losses, making the transition to greener sourcing could provide many corporations with opportunities. The switch is not easy, but businesses can ultimately achieve cost savings.
Old notions of corporate responsibility were mainly centered around reputation management rather than making a positive environmental impact. Sustainability certification is expanding into new markets and more companies are committing to sourcing 100 percent of products sustainably, according to GreenBiz. Even cattle ranching is becoming less resource intensive.
Agriculture presents challenges for sustainable sourcing because some crops such as cocoa and coffee impact climate change. To increase crop yields to meet the rise in global food demand, farmers might have to encroach on nearby rainforests. In order to prevent this, some major corporations like Nestle are working with coffee farmers to provide training on raising yields and incomes, GreenBiz said. There is also a trend of companies collaborating to increase sustainability efforts.
While many organizations are taking steps toward greener practices, the challenge in the future will be to complete sustainability projects. Consumers are more concerned with environmental impact and may avoid interacting with companies that do not commit to sustainable strategic sourcing, according to KPMG International. Organizations that harness the trend toward sustainability may have an advantage as the market continues to evolve.