This article is provided by BRC Associate Member 4C.
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Exploring the latest trends and developments in sustainable procurement and what they mean for retailers
The consumer products industry is currently undergoing a significant transformation. As consumers become more environmentally conscious and governments increasingly regulate companies’ impact on the environment, manufacturers are responding by adopting sustainable procurement practices. These practices reduce the environmental footprint of their products while also ensuring fair trade and social responsibility. However, the trends and developments in this area shouldn’t be viewed in isolation as there are impacts throughout the end-to-end value chain from raw materials producer to retailers and to the end consumer.
Use of Recycled Materials
A notable trend in sustainable procurement is the increased use of recycled materials. Many consumer products companies are focusing efforts on the increased use of recycled content in both their products and product packaging. This not only reduces the demand for virgin materials but also helps minimise waste and conserve natural resources.
Companies should make certain that using recycled materials does not jeopardize product safety or increase transportation and logistics costs by necessitating more secondary or tertiary packaging. If a product's primary packaging is reduced or light-weighted to enhance sustainability, it must be durable enough not to require further protection from secondary or tertiary packaging, which could lead to negative consequences on logistics costs if this additional packaging is larger or heavier.
With retailers similarly focusing on reducing their environmental impact, manufacturers are pushing to provide goods in shelf-ready packaging that limits the need for retailers to deal with recycling or disposal.
In addition to using recycled materials, some companies are exploring how they can integrate a circular economy into their business strategy through reviewing other innovative ways to reduce waste. Some are looking into opportunities to implement zero-waste manufacturing processes, or designing products that can be disassembled and recycled at the end of their lifecycle. Others are investing in R&D to create new, eco-friendly materials that can replace traditional, non-renewable ones and reduce the reliance on plastic.
The much-delayed End Producer Responsibility (EPR) scheme that the UK government is considering implementing, encourages manufacturers to adopt more sustainable practices and materials, as they will bear financial responsibility for waste management. Consumer products companies should therefore review not just their own processes, but also look at the retailers they sell into for opportunities to work together on how to promote circular economy principles and minimise waste.
Fair Trade Practices
Fair trade practices are another aspect of sustainable procurement for consumer products companies to consider. Fair trade ensures workers and farmers are treated fairly and paid a reasonable wage. It also promotes environmental sustainability and prohibits forced or child labour. Many companies are now seeking fair trade certification to demonstrate their commitment to these principles, however, it’s crucial for consumers to understand that unlike “organic”, “fair trade” is not a protected term, meaning that standards can vary.
Retailers play a key part in this consumer education – it is up to them to decide if they want to stock fair trade products and to set location, promotion and pricing strategies that can encourage consumers to make these purchases.
Beyond fair trade practices, companies are focusing more generally on how to improve working conditions and promote social equity throughout their supply chains. This includes efforts to ensure gender equality, support local communities and adhere to human rights standards. By establishing and mandating adherence to supplier codes of conduct, retailers play a crucial role in communicating the need for high standards of environmental and ethical operations from consumer products companies.
Carbon Reduction and Offsetting
A significant number of consumer products companies have set ambitious net-zero targets as they work to reduce their carbon emissions and their overall environmental impact. A typical consumer product company’s supply chain generates much higher carbon emissions than their own in-house operations, meaning they need to work collaboratively with their suppliers and the retailers they supply into in order to develop greener sources of supply and modes of transportation across the end-to-end supply chain.
Companies may also choose to implement carbon offsetting practices to compensate for their carbon emissions by investing in projects that reduce or remove greenhouse gas emissions elsewhere. Although carbon offsetting is becoming increasingly popular, retailers should still encourage their suppliers to reduce emissions at source wherever possible. While carbon offsetting can play a part in a comprehensive strategy to increase sustainable practices, it shouldn’t be seen as an easy alternative to developing more meaningful solutions.
In addition to carbon offsetting, many companies are also investing in renewable energy sources such as wind and solar power. These investments not only help to reduce overall carbon emissions but can also provide long-term cost savings and increased energy security.
Summary
While these trends represent significant progress towards more sustainable procurement practices, there is still much work to be done, and companies need to continue innovating and pushing boundaries to further reduce their environmental impact.
This could involve exploring new materials, investing in renewable energy, developing more efficient manufacturing processes, or reviewing transportation and supply chain requirements.
To deliver this progress, transparency is key. Companies need to clearly communicate their sustainability efforts to consumers, which can be supported by retailers. This includes providing detailed information about a product’s origins, its supply chain, and its overall environmental impact.
It’s clear that sustainable procurement is not just a trend – it’s a necessity for the future of our planet. By embracing sustainable procurement practices, companies in the consumer products industry can play a crucial role in driving positive change and creating a more sustainable future.
Looking to develop more sustainable procurement practices for your business? Get in touch with 4C Associates today to find out how we can help!