How Co-op and Whole Foods Market Prioritise Ethical Sourcing

An organisation’s approach to ethical sourcing forms a critical component of modern procurement.

Non-compliance with regulations concerning due diligence, modern slavery or forced labour can lead to significant consequences including financial penalties, import bans and litigation.

For many businesses, investors and lenders now expect alignment with due diligence standards, meaning that ethical sourcing performance can directly feed into ESG ratings and influence the cost of debt.

A large portion of a company's emissions and biodiversity impacts are found within purchased goods, logistics and land use. Without an ethical sourcing strategy that addresses issues like deforestation, high-emission materials and poor practices at farms or factories, corporate net zero and nature-positive strategies may fail to address Scope 3 impacts.

Ethical sourcing involves selecting, contracting and managing suppliers to ensure every product and service respects human rights, fair labour, environmental protection and integrity throughout the value chain.

This often means operationalising international standards such as the OECD Guidelines for Responsible Business Conduct within procurement processes.

Key dimensions of ethical sourcing

To meet stakeholder expectations, procurement and supply chain leaders must consider three key dimensions in their sourcing strategies.

These can be broken down into:

• People: Ensuring no forced or child labour, fair wages and working hours, safe conditions, freedom of association and the protection of vulnerable workers.
• Planet: Promoting the responsible use of land and water, reducing emissions and pollution, protecting nature and aligning with net zero and science-based targets.
• Integrity: Upholding anti-corruption principles, responsible sourcing from conflict-affected regions, transparency and meaningful engagement with stakeholders.

Putting these principles into practice presents considerable complexities.

Many of the most severe risks related to modern slavery, land rights and deforestation are located in the lower tiers of the supply chain with farms, mines and subcontractors.

The UK Modern Slavery Act, for instance, expects companies to map their supply chains beyond direct tier-one suppliers to understand their indirect relationships. With limited resources, procurement leaders must prioritise which areas of the supply chain require the most scrutiny.

Navigating regulatory and supplier challenges

The regulatory landscape is also changing. The EU Corporate Sustainability Due Diligence Directive (CSDDD) will introduce mandatory human rights and environmental due diligence across value chains.

This will be implemented in stages and includes potential penalties based on a company's global turnover.

Furthermore, the EU forced labour ban, which is set to become applicable in December 2027, will prohibit the import, sale and export of goods made with forced labour at any stage of production.

These challenges are compounded by data issues, as information from small or high-risk suppliers is often incomplete, while supplier audits can be manipulated.

To overcome these hurdles, companies are developing credible risk-based assurance systems that integrate technology, third-party verification and on-the-ground intelligence.

Platforms like EcoVadis assess suppliers across four themes: environment, labour and human rights, ethics and sustainable procurement.

Buyers receive scores that allow for a like-for-like comparison when shortlisting or segmenting suppliers, helping procurement teams make informed decisions.

Ethical sourcing in practice

Whole Foods Market, which has more than 500 stores, has built its procurement strategy on these principles.

“At Whole Foods Market, sourcing is rooted in our long-term relationships with farmers, ranchers and producers who align with our high standards for quality, sustainability and ethical practices” says Sonya Gafsi Oblisk, Chief Merchandising and Marketing Officer at Whole Foods Market.

Sonya explains how the company has set industry standards.

She adds: “We have continued to lead the industry with sourcing standards including our sustainable wild-caught seafood and animal welfare, and the 550+ ingredients we ban across food and beverages, supplements, body care and household cleaning products.”

In the UK, Co-op is taking a different approach by withdrawing from 17 countries in its supplier network.

The move is part of a phased plan to eliminate items linked to regions with human rights abuses or breaches of international law, affecting around 100 products.

Debbie White, Chair of the Co-op Group Board, says: “This policy, which has been developed over the past year as a part of our 'Hate Divides Communities Co-operation Builds Them’ campaign, is a clear demonstration of our co-operative values in action where the voices of our members have been listened to and then acted upon.”

The decision reflects Co-op's long-standing commitment to ethical sourcing and Fairtrade principles.