Ethical sourcing: A driver for a responsible value chain

Summary:

Ethical sourcing incorporates social, societal and environmental issues into procurement decisions to secure and future-proof the supply chain. Built on robust requirements for suppliers, it helps reduce risk, increase transparency and strengthen sustainable performance. Its success rests on a clear framework, rigorous evaluation of partners and a collaborative approach driven by all stakeholders.

Contents:

• What is ethical sourcing?
• What are the key principles of ethical sourcing?
• What are the benefits of ethical sourcing?
• How to implement ethical procurement?
• How does Manutan guarantee ethical procurement?

As stakeholders place growing demands around sustainable development, procurement departments find themselves on the front line. Their role is no longer limited to guaranteeing quality, cost and continuity of supply; they must also oversee practices throughout the entire value chain. This is precisely what ethical sourcing addresses: incorporating criteria relating to human rights and working conditions into how potential suppliers are selected and managed. It helps build supply chains that are more sustainable, more transparent and more resilient.

What is ethical sourcing?

Ethical sourcing means purchasing goods and/or services from suppliers that meet strict environmental, social and societal responsibility criteria.

The Chartered Institute of Procurement & Supply (CIPS) describes ethical sourcing as “the process of sourcing products in a sustainable and responsible way. Ethical sourcing is also about ensuring that the workers involved in making the goods are safe and working in a sustainable environment free of fraud, corruption, and bribery. Human rights are respected, and workers are paid a living wage and treated fairly.”[1]

It therefore falls to procurement departments to ensure that their practices, across the entire supply chain, do not negatively affect the environment, people or society. This means evolving their supplier selection methods, their evaluation processes and their performance monitoring tools.

What are the key principles of ethical sourcing?

Ethical sourcing rests on a set of standards covering the protection of fundamental rights as well as working conditions, management practices and diversity. These form the foundation on which companies build their responsible procurement policies and their relationships with suppliers.

Respect for human rights

Ethical sourcing draws on major international conventions and texts relating to fundamental rights. Every company must guarantee its employees fair and respectful treatment. In practice, this means banning forced labour and child labour, and respecting freedom of association and the right to organise. Regulations in this area are multiplying worldwide: the corporate duty of vigilance in France, the Modern Slavery Act in the UK, the EU's conflict minerals regulation, and the Transparency in Supply Chains Act in California.

Health and safety

Companies must guarantee healthy and safe working conditions, in line with local regulations in force. This involves implementing appropriate prevention measures, training employees on occupational risks, and continuously improving working conditions to reduce illness, accidents and workplace injuries.

Working conditions

Ethical sourcing also rests on fair working conditions: working hours that comply with legislation, fair pay, maternity protection, a minimum legal age for workers, rest periods, and access to employee benefits.

Inclusion and equal opportunities

Organisations must also promote fair access to employment, training and career development opportunities, regardless of gender, background, disability, religion, sexual orientation or any other individual characteristic.

Well-being at work

Beyond meeting regulatory obligations, the most advanced businesses encourage practices that support employee well-being: considerate management, well-designed workspaces, high-performing equipment, a healthy work-life balance, and the prevention of psychosocial risks.

What are the benefits of ethical sourcing?

Ethical sourcing brings multiple benefits, contributing to the differentiation, competitiveness and resilience of companies.

Reducing risks

Ethical sourcing practices, and the documents that stem from them, help clarify expectations and acceptable behaviour for everyone involved in the supply chain. This reduces the risk of working with suppliers involved in unethical practices or practices that breach human rights or regulations. It also helps anticipate legislative developments, limit the risk of disputes, and ensure business continuity.

Strengthening transparency

Ethical sourcing improves transparency and visibility across the entire supply chain. Thanks to common standards, regular audits and appropriate monitoring tools, companies gain better insight into the practices of their suppliers.

Controlling costs

Contrary to popular belief, ethical sourcing can also be a lever for economic performance. Sourcing from local suppliers, optimising resource use and avoiding waste are just some of the sustainable practices that help control and reduce costs over the long term.

Improving supplier relationships

Partners who align their business practices and expectations build more transparent, collaborative relationships. This encourages dialogue and the roll-out of continuous improvement plans that benefit the entire value chain.

Protecting brand image

Consumers, investors and partners are paying increasing attention to companies' societal commitments. An ethical sourcing approach helps strengthen the standing of committed companies and meet the expectations of increasingly demanding stakeholders.

How to implement ethical procurement?

To incorporate ethical sourcing into a procurement strategy, it is important to follow a structured approach involving both internal teams and partners.

Step 1: Setting the framework

The first step is to formalise the organisation's objectives, expectations and commitments. This means defining precise ethical standards and criteria that suppliers must meet. This usually takes the form of a code of conduct, a genuine reference framework to support all stakeholders in the collaboration.

Step 2: Assessing suppliers

Next, procurement teams must assess the practices of their suppliers. This can draw on CSR questionnaires and on-site audits, as well as recognised certifications such as EcoVadis, ISO 14001, and others.

Step 3: Training and raising awareness

It is also essential to train teams on the challenges of sustainability and to raise suppliers' awareness of the company's expectations. This upskilling encourages greater buy-in to the approach.

Step 4: Collaborating with stakeholders

Lastly, ethical sourcing must be part of a sustainable partnership approach. All parties must work together to strengthen transparency, share best practices, and carry out continuous improvement actions.

How does Manutan guarantee ethical procurement?

At Manutan, we have rolled out our code of conduct to all our stakeholders. This document reflects our principles, values and commitments to integrity, respect and responsibility.

As part of our responsible procurement policy, we now require all our suppliers to sign our ethical charter and undergo CSR assessments. Partners identified as higher risk and/or located outside Europe are also subject to on-site audits. To date, no major non-conformities have been identified during these social audits.

In addition, all our procurement teams have been trained in responsible procurement. They actively help develop and expand our eco-friendly range. At Manutan, an eco-friendly product is one that: carries a recognised environmental label (for example, the European Ecolabel, Ecocert, PEFC, etc.), and/or is made from at least 25% recycled materials, and/or is second-hand (used or refurbished).

Antoine Compin, Managing Director of Manutan France, adds: “It's also really interesting to ask our suppliers how they assess us, and how we're moving forward together in the same direction. It isn't just a question of a supplier doing their part, or a manufacturer doing theirs, and a customer deciding what they consume. It's the whole chain, and the symmetry of attentions on this key issue of corporate social responsibility, that needs to be taken into account across the entire chain.”[2]

As you can see, ethical sourcing is no longer just a compliance issue. It is a genuine lever for sustainable performance, helping companies reduce risk, build resilient supplier relationships and strengthen their brand reputation.