Shopping ethically can be a challenge in the modern age, with so many confusing labels and eco-friendly jargon to understand.
So, what exactly does ‘ethically sourced‘ mean?
Or rather, what does it mean for a product to be ethically sourced, and why is ethical procurement such an important issue today?
Let’s take a closer look at the terminology and help to demystify the various labels that can make sustainable shopping habits a little difficult to uphold.
Exploring Ethical Sourcing Examples & Definitions
1. The Definition Of Ethical Sourcing
Before we can boil down an ethically-sourced definition, it’s important to consider one core question: what does ‘ethical’ mean?
Being ethical means making choices that are guided by a deep consideration for the well-being of others, a commitment to honesty and transparency, and a dedication to sustainable and responsible practices.
In essence, ethical behavior signifies a conscious effort to uphold a higher standard of conduct that benefits society, fosters trust, and contributes to a more equitable and harmonious world.
If we apply this to ethical sourcing, it encapsulates the same principles.
Ethical sourcing practices ensure products and services are obtained in a way that upholds human rights, decent working conditions, health and safety, and good business ethics.
Basically, it’s about making sure that every step of a company’s supply chain is managed in an ethical and responsible manner.
When we talk about something being ethically sourced, we’re not just talking about the end product.
It starts right at the beginning, with the suppliers a company chooses to work with. These suppliers are the ones who ultimately decide how the raw materials used in a product are sourced.
For example, let’s say a company wants to produce confectionery and chocolate products. They need to work with a manufacturing company that uses ethically sourced ingredients because they are responsible for sourcing where the ingredients come from. So, in this example, working with a factory that uses sustainably sourced palm oil (or alternatives) and cacao would be crucial.
It’s important to note that being ethically sourced goes beyond just the materials used in a product. It also includes considerations for the workers involved in the production process.
This means ensuring that workers are treated fairly, paid a living wage, and provided with safe working conditions.
It means no child labor, no exploitation, and no unfair treatment—especially in developing countries that lack strict labor laws and enforcement of their own.
Ethical sourcing, then, can also be defined as ethical supply chain management since it’s about creating a positive impact throughout the entire supply chain.
2. Why Is ‘Ethically Sourced’ Important?
Ethical sourcing isn’t just a buzzword; Using ethically sourced materials in the supply chain is a crucial aspect of any company’s sustainability and success.
Let’s take a closer look at why ethical and responsible sourcing is important.
1. Climate Change And Environmental Responsibility
With climate change becoming an increasingly urgent issue, companies are realizing the need to take action. Customers and investors are prioritizing environmental responsibility, ethical goods, and sustainable practices.
Ethical sourcing is a way for businesses to demonstrate their commitment to sustainability, and appeal to the growing number of eco-conscious consumers.
2. Protecting Workers’ Rights
Ethical sourcing practices aren’t just about protecting the environment.
They’re also about fair labor practices. It ensures that employees are not subjected to unhygienic, unacceptable, unsafe, or exploitative working conditions.
Fair trade ethics go hand in hand with sustainable sourcing: workers should be paid a fair wage for their services and should not be subject to a culture of fear or violence in the workplace.
3. Creating An Engaged And Committed Workforce
By prioritizing ethical sourcing, companies can create a positive work environment that keeps employees engaged and committed to the company’s goals. When workers feel valued and protected, they are more likely to be loyal and productive.
Ethical sourcing practices are crucial to ensuring that workers globally are treated with dignity and respect.
4. Gaining Competitive Edge and Increased Revenue
Ethical sourcing goes beyond avoiding business risks and protecting a company’s reputation. Companies that prioritize ethical sourcing can actually gain a competitive edge in their industry, leading to increased revenue.
In fact, 81% of consumers “prioritize buying from companies that have ethical sourcing strategies” and 83% of them would pay more for products that come from ethical sources.
Customers are increasingly choosing brands that align with their values, and ethically sourced products can attract these customers and build brand loyalty.
5. Championing Procurement And Supply Chain Responsibility
Proper procurement is crucial for ethical sourcing. Procurement teams are responsible for ensuring that supply chains are free of unethical and unsustainable practices at every level.
Ignorance of supplier practices is no longer an acceptable excuse for unethical behaviors going unchecked. Companies need to take proactive steps to ensure their supply chains are ethical and sustainable.
3. What Is Another Word For Ethical Sourcing?
There isn’t a one-size-fits-all ethical sourcing definition. Different people and companies have varying interpretations of what it means to source ethically.
This can be a problem because what one company considers ethically sourced may be completely different from another. What’s more, there are some terms that are often used interchangeably with ‘ethical sourcing,’ such as ‘responsible sourcing’ or ‘sustainably sourced.’
Let’s take a closer look at these terms and how they differ.
- Responsible sourcing is a term that is often used alongside ethical sourcing. It refers to the practice of ensuring that products are sourced in a way that takes into account social, environmental, and economic factors.
- Sustainable sourcing, on the other hand, goes beyond just ethical considerations. It encompasses a broader range of factors, including environmental sustainability and long-term viability. Sustainable sourcing takes into account not only the social aspects of ethical procurement but also the ecological and carbon impact. It aims to minimize harm to the planet and promote the well-being of future generations.
While ethical sourcing, responsible sourcing, and sustainable sourcing are often used interchangeably, it’s important to note that there are other terms that can be thrown into the mix as well, like Fairtrade, cruelty-free, and organic.
This can cause further confusion when trying to make more sustainable choices and choose ethically sourced products.
You may have seen this label on your ethically sourced coffee, chocolate, or bananas, but what does fair trade mean?
The fair trade movement is a global certification system (or rather several different ones that all more or less uphold the same values) that ensures farmers and workers are paid fair wages and work in safe conditions. It is used in almost 80 countries worldwide.
Again, different certifying bodies differ slightly but take Fairtrade for example. To achieve Fairtrade status and certification, a product must meet certain criteria, including fair prices, fair labor conditions, and environmental sustainability.
So, what does the Fairtrade label mean?
When you see the Fairtrade label on a product’s packaging, it means that the ingredients or raw materials used in that product have been ethically produced on Fairtrade-certified farms.
This label champions fair trade ethics, communicating that the farmers and workers involved in producing the product have been paid fair wages and are working in safe conditions.
By choosing ethically sourced products with a fair trade label (whether it be Fairtrade, Fair Trade USA, or others), you’re supporting a more equitable and sustainable global supply chain.
This label is often associated with makeup, natural skincare, and personal care products.
When a product is labeled as cruelty-free, it means that neither the final product nor its ingredients have been tested on animals.
However, it’s important to note that cruelty-free does not necessarily mean the product is vegan. Animal-derived ingredients may still be present in cruelty-free products, so if you’re looking for vegan options, be sure to check the ingredients list.
It’s important to note that in many countries, including the United States, there is no standard legal definition of cruelty-free, and there is no institution approving its use in consumer marketing.
This lack of regulation can make it challenging for consumers to navigate the world of ethically sourced products as they relate to animal welfare.
The term “organic” has different definitions depending on the product and the source. In the United States, the label “organic” is governed by the United States Department of Agriculture (USDA).
For food products, organic certification means that the product meets federal organic standards for soil quality, animal-raising practices, pest and weed control, and the use of additives.
In terms of ethically sourced food, organic generally means using environmentally friendly materials for farming, avoiding chemical fertilizers, antibiotics, or genetically modified ingredients, and ensuring animals are fed organic food and raised with high levels of welfare.
However, when it comes to skincare and beauty products, the definition of organic becomes more complex. The EU law on pre-packaged foods states that if 95% of the ingredients in a packet are produced organically, it can be labeled as organic.
With the increasing popularity of organically sourced products, it’s essential to read labels carefully and look for reliable certifications. Certifications like the USDA Organic seal or the Soil Association Organic logo can help you identify products that meet strict organic standards.
4. How To Tell If Something Is Ethically Sourced?
Obviously, those are just a few of the many different ways a product can manifest as ethically sourced, meaning it can be difficult to differentiate the truly ethical from the ethical-ish when shopping for ethically sourced products.
So what is ‘ethically-sourced’ from a practical, consumer standpoint? How can you tell if something is truly ethically sourced?
First, see if the company has any certifications or accreditations that demonstrate their commitment to ethical sourcing.
Look for labels like Fair Trade, B Corporation, or Global Organic Textile Standard (GOTS). These certifications (along with a host of other manufacturing specific certifications) provide third-party verification that the company meets certain ethical standards.
It’s also worth doing your own research. Check out the company’s website and look for information on their supply chain and sourcing practices.
Are they transparent about where their materials come from and where they’re turned into products? Do these facilities have ethical certifications by organizations like Social Accountability International (SA8000) and Worldwide Responsible Accredited Production (WRAP)?
If not, do they have clear policies in place to ensure ethical sources and manufacturing partners?
If a company has none of these things, it’s a red flag. At that point, you can reach out directly and inquire. If nothing else, your inquiry might signal to the brand that potential customers are paying attention to their ethics and encourage them to be more transparent.
A company that is truly committed to ethical procurement will be open and honest about their practices.
5. Ethical Sourcing FAQs
Now that we’ve seen the benefits of ethical procurement and using ethically sourced materials let’s address some FAQs about ethical sourcing.
Is Ethically Sourced The Same As Fair Trade?
No. While fair labor practices is certainly an indicator of more ethical practices, the two are not necessarily the same thing.
While fair trade is attributed to accreditation organizations that set international standards for member brands, ‘ethical sourcing’ is not as centralized or organized.
Even if an organization boasts responsible and sustainable methods of procurement or manufacturing, remember that there are no exact agreed-upon principles or requirements for a company to use the term “ethical sourcing.”
It’s always recommended to do your research and look into an organization’s specific practices.
Does Ethically Sourced Mean Organic?
Ethically sourced does not automatically mean “organic” and “organic” does not mean ethically sourced.
While organic products are grown without the use of synthetic chemicals (or use ingredients and components that are), ethically sourced products focus on fair treatment of workers and responsible sourcing practices.
It’s possible for a product to be ethically sourced but not organic, and vice versa.
Closing Thoughts On Ethical Supply Chain Management
Ethical sourcing and avoidance of unethical practices are crucial for companies to demonstrate their commitment to sustainability, protect workers’ rights, and attract eco-conscious customers.
It goes beyond avoiding risks and protecting reputation; it can give companies a competitive edge and lead to increased revenue.
Procurement teams play a vital role in ensuring supply chains are ethical and sustainable—and it’s up to us as consumers to keep pushing brands in this direction.
By making better choices and buying from ethical sources, we can create a better and more sustainable future for all.
You can also help by encouraging others to prioritize brands with an ethical sourcing policy and regular transparent reporting by sharing this article (and perhaps some ethically sourced chocolate to sweeten the deal!).