Responsible sourcing (sustainable procurement) refers to a company’s practice of managing the procurement and production of products and services in an ethical and sustainable manner. As supply chains become more global and complex, companies are increasingly required to build more resilient supply chains by combining traditional procurement criteria (QCD — quality, cost, delivery) with ESG-related issues and requirements.

While the means and end goals of building a sustainable supply chain vary greatly depending on supply chain structure, industry, and company size, the six steps outlined in the OECD’s “Due Diligence Guidance for Responsible Business Conduct” form the foundational approach in this field.

What Sets Codo’s Services Apart

Codo works on the premise of gradually covering the elements set out in the OECD Due Diligence Guidance, ultimately aiming for (1) completing and continuously improving a PDCA cycle, and (2) identifying and creating opportunities unique to each company. The latter is especially important: a sustainable supply chain can deliver not only risk mitigation but also real competitive advantages and financial returns — such as maximizing efficiency in raw-material procurement and logistics, expanding into global customer bases, sourcing and developing alternative materials, and creating new negotiation opportunities with suppliers.

For this reason, Codo recommends establishing dialogue with suppliers and keeping communication as open as possible, conducting site visits and dialogues, and continuously disclosing results. At the same time, it is essential that a company first has its own foundation in place before setting ESG requirements and expectations for suppliers. We therefore propose support across three phases: first understanding and organizing the company’s own strategy, then establishing a structure for commitments and policy development, and finally implementing initiatives with suppliers.

Across all areas of sustainability and ESG, the supply chain is where the greatest potential risks and opportunities lie. If you are interested in support that translates sustainability activities into practice while also strengthening your supply chain, please feel free to contact us.

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