In today's retail landscape, sustainable sourcing is no longer just a 'nice to have' – it's becoming essential for business success. 

According to McKinsey, products making ESG-related claims averaged 28% cumulative growth over the past five years. This compares to just 20% for those that didn't.

This trend is particularly pronounced among younger consumers. Recent research shows that 73% of Gen-Zers aim to purchase from companies they consider ethical. 90% believe that companies have a responsibility to address environmental and social issues.

The retail sector's role in the global drive to net zero

Progress in the retail sector is crucial for global emissions reduction. The fashion industry alone is estimated to produce around 10% of annual global carbon emissions. This is more than maritime shipping and international flights combined. Consumers are increasingly pushing for action.

Our latest Net Zero Barometer report revealed that 25% of retailers cite consumer pressure as their main driver towards sustainability. Yet despite this demand, 18% of retail brands still haven't taken action to achieve net zero. Furthermore, 39% haven't made progress in improving sustainability across the supply chain.

As Todd Redwood, BSI's Global Managing Director – Consumer, Retail and Food, notes: “There are enormous issues across the supply chain for retail businesses. Are they using responsible sourcing, are they using less water, are they encouraging their consumers towards a lower carbon lifestyle? Where mining businesses are more business to-business centred, retail businesses are very consumer focused and are often working within tight margins.”

Tackling retail emissions starts with procurement

For retailers, the supply chain can account for up to 98% of total emissions. This means that any serious reduction must start with procurement. There is growing pressure to build an even clearer picture of emissions, and to prioritize suppliers with strong sustainability credentials.

However, 33% of retailers cited difficulty in finding suppliers with net zero credentials as the biggest obstacle to emissions reduction. Yet, for those that get it right, there are clear benefits.

The connection between social responsibility and supply chain management can have a direct effect on financial performance. Structured properly, a fair and up-to-date supply chain policy creates a win-win situation for both buyer and supplier.

The role of standards in delivering ethical sourcing

With lengthy global supply chains, it can be a challenge to unpick complexity and make meaningful change towards ethical sourcing.

Standards can provide blueprints for excellence and robust strategies for minimizing risk, ensuring safety and championing sustainability.

As Redwood says: “Without globally agreed standards on what good looks like, there's a challenge for retailers in identifying the source of every element of the products they sell.”

Useful standards for tackling these challenges include:

• BS ISO 20400 Sustainable Procurement this standard is designed to you’re your organization to practice sustainable procurement across the supply chain. It's particularly useful for industries such as construction, facilities management, hospitality, catering, clothing, food, manufacturing, and packaging.

• BS ISO 22095:2020 Chain of custody provides unambiguous definitions of the different chain of custody models and corresponding requirements for companies operating at any step in a supply chain.

• BS ISO 44004 Collaborative Business Relationship Management this international standard promotes progressive collaboration between large corporations and small businesses. It can play an important role in developing the collaboration and transparency necessary for ethical sourcing.

• BS 25700 Organizational responses to modern slavery provides guidance for managing the risk of modern slavery, including prevention, identification, response, remediation, mitigation, and reporting modern slavery in operations, supply chains, and the wider operating environment. A free standard.

• PD ISO/TS 17033:2019 Ethical claims and supporting information facilitates the communication of accurate, credible, and verifiable information about the ethical aspects of your product, process, service, or organization.

• BS EN ISO 26000:2020 Guidance on social responsibility provides a framework for your organization to build a robust and long-term corporate responsibility strategy.

• BS ISO 14068-1:2023 is a new international standard setting out strong principles and detailed and verifiable requirements on quantification and reduction or removal of GHG emissions. You’ll gain clear, best practice guidance that will allow them to make verifiable claims of carbon or climate neutrality. Note: There will be a period of 24 months from the date of publication of ISO 14068-1:2023 before the PAS 2060:2014 document, which it supersedes, will be withdrawn. This allows users to address changes that may be needed to meet the revised requirements detailed in the new BS ISO 14068-1:2023 standard.

With consumers now expecting retailers to make genuine progress on environmental and social issues, inaction is no longer an option.

Ethical sourcing is one of the most effective ways to meet these expectations and gain ground in an environmentally conscious market. While sprawling supply chains can make progress seem impossible, standards can foster the transparency, collaboration and shared best practice required for success.

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