What does ethically sourced mean? Ethical sourcing definition | Sedex (2023)

Ethically sourced means that products and services from each point of a business’s supply chain are obtained in an ethical way, which includes upholding rights, decent working conditions, health and safety, good business ethics and more.

What does ethically sourced mean? Ethical sourcing definition | Sedex (1)Whether you are a manufacturing company, a food processor, a retailer, or any company that sells a product or service, you rely on a supply chain to source the things you need to deliver what you sell.

Ethical sourcing definition

Ethical sourcing is an approach to sourcing and supply chains. Sourcing ethically means that when businesses purchase products from suppliers, they consider the impacts those products have on the people and communities who create them.

Often, the further you go down the supply chain, the less visibility you have over ethical risks, like poor working conditions and child labour. So, it is important to have complete visibility and responsibility for each phase of your supply chain. For your product or service to be ethically sourced, it means meeting certain ethical standards – for example, that your organisation, your direct suppliers, and your entire supply chain have decent working conditions, good business ethics, and fair wages.

Companies that prioritise sourcing ethically take responsibility for the impact that their business decisions may have on the people and communities of their supply chains. It is their due diligence to not only ensure that their business has a positive, rather than a negative, impact on the world, but that the businesses they source from do as well.

(Video) Ethical Sourcing

How does it differ from responsible or sustainable sourcing?

There is not an official, agreed-upon differentiation between the terms responsible sourcing, ethical sourcing, and sustainable sourcing. Many people use these terms interchangeably to mean that the products and services from each point of a supply chain have been obtained through ethical, environmentally sustainable, and socially conscious ways.

However, the term ethical sourcing tends to have more of a stress on the social impact and humane working conditions within supply chains over the environmental side. Sustainable sourcing tends to emphasise the environmental impacts of a supply chain. Responsible sourcing is an umbrella term that refers to all aspects of both ethical and sustainable sourcing.

Ethically sourced products vs. Fairtrade, organic, and cruelty free

What does ethically sourced mean? Ethical sourcing definition | Sedex (2)It has become increasingly common to see companies marketing their products and services as ethically sourced, especially in industries like clothing, diamonds, coffee, and palm oil, which have well-known histories of unethical practices. But with so many product labels that have similar meanings to “ethically sourced,” it can be hard to keep track.

A makeup product may be labelled as cruelty free, which usually means that they are not testing on animals to make the product, but that does not cover labour rights and the conditions that the human beings involved in making the products experience. It is important to know the difference between each of these labels, scrutinise what companies are saying, and hold them accountable for all kinds of ethical considerations when creating the products and services that you pay for.

Here is what each of these terms mean and how they are typically used:

(Video) ETHICALLY SOURCED CRYSTALS | What ETHICAL GEMSTONES means and why it matters for SELLERS and BUYERS

  • Ethically sourced is not a coined label with a standard legal definition. There is no official institution approving its use in consumer marketing. Because ethical sourcing is not a term from an institution with a specific set of standards, it can encompass a wide range of ethical considerations.
  • Fairtrade is a global certification system of farmers and workers used in almost 80 countries. Companies can receive the Fairtrade certification for their product when they meet the Fairtrade social, economic, and environmental standards for the production and supply of the product.[1] When a product has met this standard and received the Fairtrade certification, the Fairtrade label will appear on their products packaging.
  • The term cruelty free is most widely used by cosmetic companies to say that the product and the product ingredients were not tested on animals when being manufactured. It does not necessarily mean that the product is vegan, which refers to whether there are ingredients from animals in the product. In many countries, like the United States, there is no standard legal definition of cruelty free, and no institution approving its use in consumer marketing.[2] In the European Union, selling products that have been tested on animals or that have ingredients that were tested on animals was banned in 2013­, making the label “cruelty-free” redundant and unnecessary.[3]

Organic has many different definitions depending on the product and the source. In the US, the label “organic” is governed by the United States Department of Agriculture (USDA), and it means that federal organic standards for the growing and processing of foods are met in terms of soil quality, animal raising practices, pest and weed control, and use of additives.[4] The EU has their own certification for the organic label.[5] Unlike ethical sourcing, the term organic never refers to working conditions or labour rights.

Ethical sourcing legislation

Many countries have established their own legislation for ethical sourcing, including the EU as a whole, the UK, Australia, France, Germany, India, Italy, the Netherlands, Norway, Switzerland, and California within the US.

The UK became a leader in ethical sourcing legislation by establishing the UK Modern Slavery Act in 2015. The Act sets legal requirements for companies to identify, prevent and mitigate modern slavery in their own operations and supply chains.

While the United States as a whole is far behind Europe in this sort of legislation, California passed the California Transparency in Supply Chains Act in 2010. This Act requires large retail sellers and manufacturers who do business in California to annually disclose their efforts to eradicate human trafficking and modern slavery from their supply chains.

How businesses can source ethically

What steps should businesses be taking to source more ethically?

(Video) Supply Chain Mapping and Ethical Sourcing

What does ethically sourced mean? Ethical sourcing definition | Sedex (3)

Ultimately it comes down to due diligence. Companies should assess their suppliers and look at the inherent ethical risks in their supply chains. For example, if you are buying palm oil, it is known that there are more environmental risks in that industry. If you are buying from a particular region or country that has less legal protection for workers, that is also an inherent risk.

After identifying the parts of your supply chains that are ethically riskier, you can then focus on understanding the employment conditions and workers’ experiences at individual sites. You can do this with activities including risk assessments, questionnaires, on-site social audits like SMETA (Sedex Members Ethical Trade Audit), and surveying or interviewing workers.

Once you have collected this data, you can take the results and identify the ethical issues at individual sites and use this information to create a corrective action plan to help your suppliers improve conditions for workers.

How Sedex can get you started with ethical sourcing

Using technology to assist with your ethical sourcing program can help your activities be more efficient, which could save you money in the long run. Sedex’s tools and services allow businesses to understand and manage the risks of negative impacts within their supply chains. Here are some of the ways we can help you:

(Video) Ethical & Sustainable Sourcing- Part 1

  • Sedex’s Self-Assessment Questionnaire (SAQ) gathers data about activities, working conditions and work sites from businesses.
  • Our risk assessment tool helps you assess ethical risks across your supply chain. Study inherent risks in relevant countries and sectors and build custom risk profiles for every work site that you have data for.
  • Our ethical data exchange platform allows you to access, store, share, analyse and report on supply chain information, including data from the above tools.
  • And if you are not sure where to begin, Sedex’s Consulting service can help you identify and develop a plan.

Interested in getting started with ethical sourcing?

Contact us today

[1] Fairtrade Standards from Fair Trade America

[2] U.S. Food & Drug Administration on Cruelty Free Cosmetics

[3] Eco Mundo on Using the Cruelty Free Logo in Europe

[4] U.S. Department of Agriculture on the organic label

(Video) Ethics for Lunch: How Do We Make Decisions When The Patient's Identity is Unknown?

[5] European Commission on the organic logo

FAQs

What is ethical sourcing and why is it important? ›

Ethical sourcing is critical to ensuring that workers globally are protected from unhygienic, unacceptable, unsafe, or exploitative working conditions. That is to say, workers should be paid a fair wage for their services and not be subject to a culture of fear or violence in the workplace.

What is ethical sourcing quizlet? ›

- Ethical Sourcing is that which attempts to take into account the public consequences of organizational buying or bring about positive social change through organizational buying behavior.

What is meant by sourcing ethical and environmentally sustainable resources? ›

Defining sustainable sourcing

Sustainable sourcing can be defined as obtaining the materials, products, and services an organization needs from its suppliers in a manner that is socially and environmentally responsible, while still being economically sound.

How do you ensure ethical sourcing? ›

Here, then, are six steps they should take to successfully build ethical and sustainable supply chains.
  1. Identify Trustworthy Suppliers. ...
  2. Secure Trading-Partner Relationships. ...
  3. Digitize Your Supply Chain. ...
  4. Monitor Shipment Provenance. ...
  5. Manage Supplier Communities. ...
  6. Gather Ethical Insights.
21 Jan 2020

What is ethically sourced mean? ›

Ethically sourced means that products and services from each point of a business's supply chain are obtained in an ethical way, which includes upholding rights, decent working conditions, health and safety, good business ethics and more.

What makes an ethical source? ›

Ethical writing is writing with a level of inclusion, respect, and acknowledgement of diversity. The importance of ethical writing, then, is based not only upon the avoidance of plagiarism, but also avoiding the weaknesses of bias and exclusive language (sexist, racist, homophobic, etc.)

What is the best definition of sourcing? ›

Simply put, sourcing is the process of selecting suppliers to provide the goods and services you need to run your business. It may sound uncomplicated, but the process can be complex. Sourcing involves the following: Finding quality sources of goods and services.

How do you explain sourcing? ›

Sourcing is the process of vetting, selecting, and managing suppliers who can provide the inputs an organization needs for day-to-day running. Sourcing is tasked with carrying out research, creating and executing strategy, defining quality and quantity metrics, and choosing suppliers that meet these criteria.

What is a example of sourcing? ›

Collecting data on good quality sources of goods and services. Negotiating contracts. Market research.

What is an ethical resource? ›

Ethically Use of Resources

This means that you need to correctly cite them both in the text of your paper and in your references, works cited, or bibliography. Even though information, words, and ideas are not concrete, they still can be stolen by them not being cited and those who commit plagiarism get in trouble.

What does ethical mean simple? ›

: conforming to accepted standards of conduct.

What is unethical sourcing? ›

Unethical conduct in the supply chain

Forced labour is the taking of labour without consent through threats or coercion, while human trafficking is the purchase of individuals by deception, threat, or coercion into slavery, forced labour, or other forms of exploitation.

Is ethical sourcing is a good practice? ›

Not only has ethical sourcing become a mantra for mitigation of operational risk and protection of brand reputation, but it also represents a means to gaining competitive advantage. If you are deploying best practice, your competitors' failure to source ethically can result in your competitive gain.”

Is ethical sourcing good or bad? ›

More positive reputation

Ensuring the moral credentials of your business can mean an advantage in overtaking competitors on a reputational basis. Likewise, a business with a poor social or environmental reputation may lose potential sales or damage customer loyalty.

Which of the following best describes ethical sourcing? ›

Q: Which of the following best describes ethical sourcing and procurement? A: It refers to dealing fairly with one's suppliers, including those in third-world countries.

What does ethically sourced mean animals? ›

'Ethical sourcing' means obtaining exotic animals to be kept in captivity in an ethical way. This means it is done in a way which is not harmful to the animal- for example removing a baby monkey from it's mother. Exotic animals may be bred in captivity, or collected from the wild.

What does ethically sourced beans mean? ›

Ethical sourcing means that farmers and their laborers are compensated fairly for their time and land and that they are provided the partnerships and tools they need to continue to produce coffee in a competitive market.

What does ethically sourced wool mean? ›

The sheep producing the wool for your favorite Smartwool® socks or base layers are treated humanely, are well-fed, live natural and healthy lives, and are not subjected to harmful practices like mulesing. This means, you're getting the highest-quality ethically sourced products and Merino wool.

Why are ethical resources important? ›

Firstly, they help to promote the general aims of research, such as the search for knowledge and the intention to avoid error. Secondly, ethics promote values that are central to successful collaboration, including respect, trust and accountability.

Why is it important to use ethical resources? ›

There are several reasons why it is important to adhere to ethical norms in research. First, norms promote the aims of research, such as knowledge, truth, and avoidance of error. For example, prohibitions against fabricating, falsifying, or misrepresenting research data promote the truth and minimize error.

What is the definition of sourcing in history? ›

SOURCING: Identify where the source came from and. its intended purpose. CONTEXTUALIZATION: Place the source in its historical context.

What is another word for sourcing? ›

illustrating, naming, referring (to), specifying, touching (on or upon)

What is the definition of sourcing quizlet? ›

Sourcing is continually gather information on availability of suppliers and goods, prices, and new products and technology. Maverick Buying. Practice where internal users attempt to buy directly from suppliers and bypass the sourcing function.

What is characteristics of sourcing? ›

Sourcing involves the whole process of evaluating and selecting the suitable suppliers who help the organization in maintaining its competitiveness in the market. Quality of goods and cost savings are necessary criteria to consider before choosing a sourcing partner.

What does it mean to work in sourcing? ›

Sourcing is the proactive searching for qualified job candidates for current or planned open positions; it is not the reactive function of reviewing resumes and applications sent to the company in response to a job posting or pre-screening candidates.

What are sourcing skills? ›

Strategic sourcing skills play an important role in the cost structure and competitiveness of small and large businesses. These skills involve analyzing high-volume purchases and developing long-term partnerships with a select group of suppliers that are capable of providing quality products and services at low costs.

What are three types of sourcing? ›

Some sourcing strategies to consider:
  • Outsourcing. Having suppliers provide goods and services that were previously provided internally.
  • Insourcing. Delegating a job to someone within the company.
  • Nearsourcing. A business places some operations close to where its end products are sold to save time and money.
4 May 2017

How many types of sourcing are there? ›

The two broad types are in-house model or Insourcing, where a company does its own sourcing with in-house staff or through a group company; and the outsourced model or Outsourcing where it relies on an external agency to fulfil the requirements.

What sources do you use for sourcing? ›

Here is the list of five leading candidate sourcing techniques that are used by many hiring teams for effective candidate sourcing.
  • Online Job Postings. ...
  • Social Media Platforms. ...
  • Recruitment Database. ...
  • Employee Referrals. ...
  • Recruiter Network.
12 Jan 2021

What is an ethical issue example? ›

Some examples of ethical dilemma include: Taking credit for others' work. Offering a client a worse product for your own profit. Utilizing inside knowledge for your own profit.

Why is ethics important in business? ›

Business ethics enhances the law by outlining acceptable behaviors beyond government control. Corporations establish business ethics to promote integrity among their employees and gain trust from key stakeholders, such as investors and consumers.

What is the best definition of ethical behavior? ›

Ethical behaviour is characterized by honesty, fairness and equity in interpersonal, professional and academic relationships and in research and scholarly activities. Ethical behaviour respects the dignity, diversity and rights of individuals and groups of people.

What is ethics in your own words essay? ›

Essay on Ethics – Ethics refers to the concepts of right and wrong conduct. Furthermore, ethics is basically a branch of philosophy dealing with the issue of morality. Moreover, ethics consist of the rules of behavior. It certainly defines how a person should behave in specific situations.

What is ethical sourcing supply chain? ›

Ethical Sourcing is the process of ensuring that the products made are obtained through responsible and sustainable methods.

How do you know if something is ethically sourced? ›

If you are looking for more assurance if their products are truly ethically sourced, check for Fairtrade International, Global Organic Textile Standard (GOTS) , Vegan Action, Forest For All Forever, Cruelty Free Forever and other labels that can be proved that their products are ethically sourced.

Why do firms use ethical sourcing? ›

Ethical sourcing makes companies more attractive to employees. Talent quality, talent management and talent retention are top priorities and a challenge for companies. Not only does ethical sourcing make businesses more attractive to their customers and clients, but it also makes you a more attractive employer.

What is ethical sourcing manager? ›

Being a Sustainable Sourcing Manager identifies vendors and suppliers that exhibit responsible practices and develop relationships. Builds data and metrics to inform and support responsible vendor selection and procurement decisions. Additionally, Sustainable Sourcing Manager requires a bachelor's degree or equivalent.

What are some common practices or activities of ethical sourcing? ›

Ethical sourcing of ingredients. No human or labor rights abuses. Environmental sustainability.
...
Here are five steps your company can take to create a more ethical supply chain:
  • Create or update your ethical supply chain code.
  • Outline your supply chain.
  • Collaborate.
  • Transparency.
  • Commitment.
28 Jan 2020

Why is ethical use important? ›

Ethical use of information means using information ethically and properly. There are two ways that deal with this concept: They are the issues of plagiarism and copyright. It is important to give credit where credit is due and use other people's work correctly.

What is the importance of ethical procurement? ›

Ethical procurement policies provide clear guidance for sourcing supplies and establishing internal and external relationships essential for daily operations and long-term growth. Today, more companies realise that providing a high-quality product or service is not enough to gain a market advantage.

What is ethics in your own words? ›

First, ethics refers to well-founded standards of right and wrong that prescribe what humans ought to do, usually in terms of rights, obligations, benefits to society, fairness, or specific virtues.

What is the example of ethics? ›

Examples of ethical behaviors in the workplace includes; obeying the company's rules, effective communication, taking responsibility, accountability, professionalism, trust and mutual respect for your colleagues at work.

What is ethical standard? ›

Ethical standards refer to the principles that promote trust, good behavior, fairness and governing the conduct of a person.

What does ethical procurement mean to you? ›

Ethical procurement refers to a wide range of issues that can impact the ethical and sustainability goals of a business. Examples include the monitoring of unethical or illegal supplier business procedures and practices that can impact your organization's procurement efficiency and reputation.

What are ethical principles in procurement? ›

The ground rules for good ethics in procurement are simple enough. Practice integrity, avoid conflicts of interest and personal enrichment, treat suppliers equally and fairly, and comply with legal and other obligations.

What is ethical procurement policy? ›

We insist on ethical standards from our suppliers, and in turn we must exhibit the highest ethical standards ourselves. We must not only be fair and above board in our dealings, but avoid any conduct which is capable of having an adverse interpretation put on it.

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