Jane Marsh, Editor-in-Chief of Environment.co, explains how to overcome common challenges in sustainable material procurement.
As many companies embark on a mission to lower their social and environmental impacts, some are having to rethink their entire business models. Where do their building materials come from? In the midst of pandemic-related supply chain shortages, how can they obtain much-needed supplies like green steel and recycled plastic? Here are the most common challenges in the raw material sourcing business — and how to get through them.
Limited material availability
It’s hard enough finding building supplies in 2023, so finding sustainable supplies can be downright challenging.
For example, to meet the European Union’s goal of a 50% emissions reduction by 2030, manufacturers are ramping up green steel production. But even so, experts predict the demand for green steel will be twice that of the available supply in 2030.
Merchants will need to diversify their supplier base to procure enough sustainable materials. Additionally, they can buy supplies that do more with less.
For example, some types of joint compound require 80% to 90% less product per application than those of standard grades, cutting down on delivery, handling and inventory costs. Local sourcing can also improve a company’s sustainability by reducing shipping time.
Lack of traceability
Sustainable building and freight supplies must come from sustainable sources. But supply chains can be dozens of links long, making it hard to determine where a product really came from. Even if a shipment of gravel is labeled as environmentally friendly, how can merchants be sure?
Communication is key when it comes to increasing transparency along supply chains. The shorter the overall product distribution network, the easier it is to communicate with everyone involved. Supply chain audits ensure vendors comply with environmental, social and governance standards. Businesses can also use digital technology like blockchain to improve transparency among third-party suppliers.
Some businesses shy away from the switch to sustainable products — aren’t they too expensive?
Not necessarily. While it’s true that socially and environmentally responsible materials often have higher sticker prices, they can lead to greater returns in the long run. They’re often more durable, leading to greater customer satisfaction. Government regulations are also increasingly penalizing businesses for using unsustainable materials.
Plus, many consumers are willing to spend more for sustainable products. A 2022 study of U.S. grocery store customers found over 40% were willing to pay higher prices for sustainably sourced products. Therefore, merchants who spend a little more on sustainable materials can increase their prices accordingly to make up the difference.
Businesses should look beyond the initial price of sustainable materials when deciding if they’re worth purchasing. They should also consider factors like increased customer spending, the cost of regulatory non-compliance and the benefits of maintaining a loyal client base.
Benefits of sustainable material sourcing
Why should building suppliers care where their products are sourced?
1.Supporting fair labour
Socially sustainable products often come from happy, safe workers who earn a living wage. Certain building supplies — like bricks, textiles and carpeting — sometimes involve child labor or slavery. By only supporting suppliers who use fair, paid labor for workers in safe conditions, merchants can ensure they aren’t contributing to human rights abuses.
2.Growing the localeEconomy
Merchants that buy from local suppliers are directly supporting their local economy, helping more of that money come back to them. They can help create new jobs in the area and foster a sense of well-being in the community. Additionally, they can specifically choose to help small or struggling businesses to help ensure their success.
3. Helping the environment
Choosing sustainable products with lower carbon footprints conserves energy, promotes sustainable land and water use, preserves natural ecosystems and reduces greenhouse gas emissions. It’s also good for people.
Polluted air is a known contributor to asthma, chronic obstructive pulmonary disease and other health issues, so it’s crucial to choose materials that don’t contribute to air pollution. Keeping waterways clean protects the supply of fresh drinking water for surrounding communities. In general, most of the standards governing environmental protection also help people.
Making the switch to sustainability
When merchants prioritise sustainable sourcing practices, they help support fair labor, reduce their environmental impact and improve their brand reputation. Although it can be challenging, ethical sourcing mitigates the risks associated with supply chain disruptions, changing consumer expectations and regulatory compliance, making it worthwhile in the long run. It’s time for companies to take sustainability seriously.