Products and sourcing

In this topic

What it is | Why it matters | Who it matters most for | What you can do

How to know if it's working | What the jargon means | How to learn more

What it is

Every business buys or sells something. Whether you’re sourcing office supplies, designing products, stocking shelves or fitting out your space, these decisions shape your footprint.

Small changes in the design and inputs of products you make, sell, use in your own business, or apply or recommend as part of the services you provide can lower costs, reduce waste and make everyday operations easier. This applies equally to service providers who use products in their delivery or influence what clients buy, such as architects specifying materials. This guide looks at ways to improve your product, service and sourcing decisions, from materials and suppliers to what happens when items reach end of life. It’s about considering each stage of a product's life cycle, as you can see below.

Why it matters

Most of the most severe environmental and social issues we face today, from pollution and deforestation to sweat shops and child labour, are driven by the way products are made.

In fact, the supply chains of eight key sectors are responsible for 50% of global greenhouse gas emissions, along with other impacts like water use, land clearing and loss of biodiversity. Complex global supply chains also carry risks of human trafficking and modern slavery.

Many people don’t realize the biggest impacts often happen early in the life of a product – during extraction of raw materials through mining, farming, fishing and forestry or during manufacturing. That means choosing a better product often makes more difference than how far it travels, for example.

While large corporations often come under scrutiny, small businesses also have a powerful role to play. They make daily choices about what to stock, sell or source, and those choices can either do good or cause harm.

And it's not just about doing good for the planet. Smarter sourcing can also mean fewer risks, more reliable suppliers, more return customers, and more revenue.

Sources: ILO 2022; McKinsey 2016; Ellen MacArthur Foundation 2022; Nielsen, 2015

Who it matters most for

This topic is particularly important for businesses that buy or sell physical products that rely on high-impact materials or ingredients. That includes, for example, mined metals used in electronics, meat and dairy in food, synthetic fibres and cotton in apparel, plastic and chemicals in consumer goods, and timber, steel, cement and concrete in construction.

But even if you don’t make or sell products, you’re still buying things. Office supplies, cleaning products, branded merchandise and furniture all add up. You still have the chance to make better choices and support a better supply chain.

What you can do

Here are some practical and impactful ways you can address issues with sourcing products in your business, depending on whether you design, specify, on-sell or use products.

Design products and spaces for sustainability

Choose better ingredients and inputs

Stock and sell more responsible products

Buy better for internal use

Work with responsible suppliers and partners

Consider the end of life of products

Design products and spaces for sustainability

If you have input or control over the design of products or spaces, this is one of the most impactful actions you can take. If you don’t design your own products, that’s okay; keep reading for other strategies to make a meaningful difference where you can.

Most of a product’s environmental footprint is locked in before it’s even made. Smart design can make products and spaces more energy or water efficient, longer lasting, easier to adapt, reuse or recycle, or even require less material and lower shipping costs.

Look for ways to reduce material use, build in durability, or make products modular or easy to repair. This applies to physical goods, such as simplifying packaging or designing products for longevity, modular upgrades or easier recycling.

It also applies to the design of physical spaces, like office and retail fitouts, and even buildings, infrastructure, parks and gardens. Whether you're fitting out a small cafe or working on a large infrastructure project, consider how your design choices will affect not just the initial construction, but the long-term use, efficiency, durability and adaptability of the space.

Source: McKinsey, 2022

Quick actions you can take

• Review key product designs for opportunities to reduce materials
• Look for ways to make your product or space more energy efficient
• Make your product easier to repair, refill or reuse.

Choose better ingredients and inputs

If you have the ability to choose or specify the materials and ingredients going into a product, either directly or by setting requirements for your suppliers, this is another important place to focus. If not, you can skip ahead to the next sections on product and supplier choices.

Most product impacts are in the materials that go into them. These may include deforestation, pollution, carbon footprint, or poor working conditions in harvesting or processing.

Small changes in materials can make all the difference. Certified sustainable options such as FSC-certified timber, MSC-certified seafood and Fairtrade coffee can ensure the worst impacts are avoided. Recycled content such as plastic, metal and paper can avoid the impact of producing new raw materials almost entirely.

You can also consider swapping a material for a lower-impact alternative, such as natural and renewable versus synthetic, or one produced in a different region known for having better employment conditions and environmental practices. It's also important to consider the chemicals going into your products and work to phase out any that could potentially be harmful.

Packaging is covered in the how-to guide on packaging, but the same principles apply: choose recycled and renewable inputs, as well as recyclable and minimal design.

Source: Our World in Data, 2022

Quick actions you can take

• Research your three most used materials or ingredients for sustainability risks
• Identify recycled or reclaimed materials that can be used in place of current ones
• Identify environmental or social certifications that are relevant to the materials or ingredients you use.

Stock and sell more responsible products

If you retail products you don’t design or manufacture yourself, you still have a big role to play. Choosing which products to offer and which to avoid improves access to more sustainable products and helps meet growing customer demand for better options.

Use criteria such as efficiency, durability, better materials, labour protections and certifications (covered in the previous sections) to guide what you stock. Use those same principles to assess products and ask suppliers questions, and consider defining which attributes you want to prioritize in your store.

Consider finding ways to highlight sustainable choices to customers through signage and marketing, including explaining key certifications or ingredients. Online, you might use search filters, product badges or collection pages to make it easier for customers to shop their values.

Source: Our World in Data, 2018

Quick actions you can take

• Feature one ethical or sustainable brand you already stock in a prominent display
• Set basic sustainability criteria for what you buy and sell
• Use shelf talkers or online tags to highlight better choices

Buy better for internal use

The same principles that apply to what you sell also apply to what you use in-house. Think office supplies, food and drink, merchandise, uniforms, cleaning and hygiene products.

Look for certified sustainable products like Fairtrade tea, coffee and uniforms, appliances with high energy efficiency ratings, and refurbished office furniture. Just like stocking better products, medium-size businesses might even consider setting minimum standards for what they buy internally and documenting these for employees to follow.

If you lease or share your office space, you may not have control over certain choices like energy, office fit-out or even kitchen supplies. You may wish to lobby for change, even joining forces with other tenants, or choose to move office when your lease is up.

Source: Fairtrade

Quick actions you can take

• Replace one stationery cupboard or kitchen item with a more sustainable option
• Add sustainability considerations to your next internal purchase, like energy efficiency ratings for your replacement office fridge
• Talk to your landlord or office manager about sustainable purchases

Work with responsible suppliers and partners

Every purchasing decision is about both the product and the supplier. In addition to checking the materials and design of a product, consider the practices of the business supplying it. Even if your own product or venue is sustainable, unethical suppliers and partners can be a huge risk to your business.

It may feel like you're too small to influence suppliers, but you don’t have to be a major customer to ask questions. Most responsible businesses are happy to share what they’re doing. A good place to start is asking whether they have any certifications or past audit reports they can share.

For key suppliers, like those of the brands you sell, white-label manufacturers, or core ingredients, it's worth engaging in a deeper conversation. You can ask questions about their commitment to sustainability, their practices in specific areas like fair employment and carbon emissions reductions, and the actions they're taking to improve over time.

Many small businesses also choose to switch suppliers either to other small and local businesses, to purpose-led businesses, social enterprises, minority-owned businesses or others that align with their values. These may not always be able to match the low price of the big guys, but for certain purchases it may be worth it to make your purchasing dollars work double: meeting your needs and supporting the greater good!

For more on buying from local suppliers, see the how-to guide on community.

Quick actions you can take

• Ask your key suppliers to share any certifications and supplier audit reports they have
• Check out the website of your key suppliers to see what commitments they're making and any sustainability or ESG reports
• Identify any small, local, purpose-led businesses and social enterprises you might want to consider

Consider the end of life of products

Every product reaches the end of its life eventually. If it’s designed well, it can be given a second life by reselling, repairing or recycling it rather than ending up in a landfill.

Circularity means keeping products and materials in use for as long as possible. In addition to considering circularity in the design of the product, you can facilitate its return to ensure it gets a second life. Increasingly, businesses are enabling their customers to return the products they sell, offering take-back initiatives to enable reuse, repair and resale, or donation or recycling collection points.

For certain products, like electronics, tyres, mattresses and even fashion, there are producer responsibility programs that sellers may participate in that manage the collection and proper recycling of these materials.

As a small business, you can consider offering trade-in programs to give customers discounts on new products, taking back packaging to reuse, or recommending a resale or repair platform.

Source: Tari and Trudel, 2023

Quick actions you can take

• Check if any producer responsibility programs apply to the products you sell
• Set up a collection bin and perhaps a discount or incentive for customers to return used products for reuse or recycling
• Partner with a local business or charity to repurpose old materials

How to know if it's working

We know customers want to see how sustainable your products or supply chain are, and it's always good to convey details of specific actions and attributes. But how can you measure sustainability of their products as a whole to make sure you're progressing?

Some common metrics businesses use to track the overall sustainability of their product range and supply chain include:

• % of products or suppliers with environmental or social certifications or passed third-party audits
• % of products with sustainability attributes such as recycled content, designed for recyclability, bio-based, zero waste, and so on
• Return rate achieved in take-back programs: The ratio of items collected to the number sold and what happened to those items (such as % resold, remanufactured, recycled)

Targets for these metrics will necessarily depend on your starting point. You may set an ambitious longer-term goal. You can also set shorter-term goals and commitments like ‘All paper products are recycled or sustainably sourced’ or ‘Reach out to ask supplier X about their practices this quarter’. These help guide decisions and show progress over time.

For small businesses, it’s important to make sure the tracking of these metrics is simple and practical. You don't need fancy software; you can use a basic spreadsheet to log purchases, SKUs or suppliers and note key attributes, certifications and action items. Or even just keep a simple list of which products are certified.