Responsible sourcing and digital intelligence are the foundation of resilient supply chains and competitive advantage.
By Mita Gupta
It’s no surprise the World Economic Forum says chief procurement officers are leading the charge on sustainability.i Procurement leaders have long known the business value of taking a responsible and sustainable approach to sourcing.
That’s especially true in manufacturing. Manufacturers’ ESG performance is scrutinized by regulators, customers, shareholders, and potential employees, making sustainability a critical competitive differentiator. In a sector with razor-thin margins, every cent of waste avoided goes straight to the bottom line, so sustainable choices can have a significant impact on the bottom line.
Procurement is a vital enabler of sustainability and responsible sourcing strategies have become increasingly essential for manufacturers for achieving ESG goals while simultaneously unlocking new sources of tangible business value. This combination of compliance risk mitigation and value creation is vital to underpinning procurement’s role as a key strategic driver within the organization.
Responsible sourcing, where traditional procurement approaches are refined to include environmental and ethical considerations, is about doing the right thing for the planet and society. But it’s also about doing the right thing for the business.
When procurement decisions are made within responsible sourcing frameworks, there’s a powerful impact on costs, risk, and brand equity.
Responsible sourcing aligns neatly with the lean operations manufacturers depend on to protect their margins. The avoidance of waste is critical throughout the manufacturing process, not just on the factory floor, but at every step of the global supply chain.
There are many factors that can affect supply chain sustainability. But to take just one example, one of our CPG clients used freight and logistics analytics to source closer to the point of need, reducing its carbon impact and cutting costs by up to 50%.
Supply chain localization can have many other benefits, including greater supply chain resilience and efficiency, faster responsiveness to market conditions, and stronger quality control.
Future-focused companies understand that the initial investments in responsible sourcing—the so-called ‘green premium’—lead to substantial long-term cost savings from operational efficiency, waste reduction, and better resource management. Unilever, for example, reduced costs by $1.5 billion between 2008 and 2021 by adopting sustainable sourcing practices.ii
Responsible sourcing can also have an impact on risk mitigation. Applying a responsible sourcing framework demands a deep understanding of every supplier in the ecosystem to evaluate their sustainability performance and identify potential risks. This raises the bar for supplier risk management, helping organizations assess numerous risk factors and build a more secure and resilient supply chain.
Many organizations find that the green premium can work both ways; consumers are often willing to switch to brands with superior ESG credentials or pay more for products that are sustainably sourced and produced.
Sustainable products also drive business growth. McKinsey research in the CPG sector found that products making ESG-related claims averaged 28% cumulative growth over the previous five years, compared to 20% growth for products that didn’t make such claims.iii
Responsible sourcing has been part of manufacturing discourse for decades. But now, AI is making it possible for organizations to progress faster toward realizing the full potential of sustainable supply chains.
AI-powered analytics capabilities allow procurement teams to make decisions in a far more dynamic manner, responding in real-time to emerging opportunities and risks. With AI rapidly analyzing vast quantities of structured and unstructured data, procurement professionals can uncover and act on previously hidden patterns and trends.
These insights allow organizations to adapt category strategies based on a deeper understanding of emerging and future conditions. From a responsible sourcing angle, that might mean pivoting to an alternative 3TG supplier based on new conflict minerals information, or continuously evaluating the sustainability performance of palm oil suppliers.
AI also introduces the opportunity to decentralize sourcing decision-making by democratizing procurement insights. Decentralization brings even more dynamism to procurement, enabling decisions to be made closer to the source of materials supply or production demand. Greater visibility of sourcing insights also removes the analyst bottleneck; buying managers can talk directly to the data and make smarter, more sustainable decisions on the fly.
Democratizing insights also frees procurement teams to focus on strategic tasks. For example, we collaborated with a global electronics manufacturer to create a single data hub for spend visibility, reducing inbound queries to the procurement function by 95%.
Alongside implementing AI-powered innovations, procurement teams can bolster the organization’s competitive advantage by embedding agility and collaboration into their operating models.
The economic and geopolitical turbulence we’ve seen over the last few years has highlighted the need for greater agility. Supply chain volatility is always painful, but for manufacturers, the ability to make informed decisions and pivot quickly is essential. One delayed move as supply chains evolve can make a huge difference to a product’s competitiveness.
For this reason, we’ve seen procurement move from ‘just in time’ to ‘just in case’. Organizations are focusing on having more options, broadening their supplier base to make smarter, real-time sourcing decisions based on ESG factors as well as fluctuations in price, demand, and lead time.
Increasing operational agility can also involve a new organizational design. Many organizations have adopted a hub and spoke model, with a Center of Excellence defining policies, frameworks, and best practices, while sourcing responsibilities are devolved throughout the business.
As noted earlier, one of the most important characteristics of responsible sourcing is a deep understanding of suppliers. By extending from understanding to collaboration, manufacturers can advance their sustainability goals and foster innovation. For example, a food and beverage manufacturer might work with suppliers to find more sustainable sources or alternatives for key ingredients.
Sustainability is a collective endeavor, so collaborating with suppliers—and giving them the insights to improve their ESG performance—is vital. Siemens, for instance, uses its Green Digital Twin application to assess the sustainability of every product across its lifecycle and work with suppliers to reduce their emissions.iv
Responsible sourcing isn’t just an ESG compliance exercise or a PR initiative; it’s a key driver of strategic value creation and competitive advantage. And by combining the latest advances in AI with human intelligence and collaborative effort, organizations can gain the supply chain visibility and insights to make responsible sourcing simpler, faster, and more effective.
Thanks to AI, the next era of responsible sourcing is here. But it will take talented and committed teams both internally and across the supplier base to bring the possibilities to life. In the future, the organizations that thrive will be those that empower these teams with the digital intelligence to put sustainability at the heart of procurement decision-making.
About the Author:
Mita Gupta is the EVP and Business Unit Head of WNS Procurement. She is responsible for the business unit’s strategy, growth initiatives and financial performance. Mita has decades of experience launching and scaling businesses within B2B services and technology domains. She has driven the rapid expansion of some of the most successful companies in the procurement and supply chain sectors across dozens of countries in North America, EMEA and APAC. Mita has sdonned multiple global and leadership roles in Cprime, a portfolio company of Goldman Sachs and Everstone Capital; Globality, an AI-powered B2B autonomous sourcing platform; GEP Worldwide and Kearney.
Read more from the author:
How Trade Tensions Are Rewiring Tech Supply Chains | Industry Today – 4/6/25Tariff Turmoil: How AI Is Addressing Supply Chain’s Latest Challenge | Supply Chain Brain – 9/17/2
i https://www.weforum.org/stories/2025/01/chief-procurement-officers-leading-charge-sustainability/
ii https://assets.unilever.com/files/92ui5egz/production/413c31587571cb8a00b446a272170b60c9f09cba.pdf/unilever-q4–and-full-year-2020-results-presentation.pdf
iii https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/consumers-care-about-sustainability-and-back-it-up-with-their-wallets
iv https://blog.siemens.com/2025/05/siemens-green-digital-twin-a-lca-software-tool-used-by-over-1-200-siemens-users-soon-available-for-external-users/
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