The product approach aims to optimize the social benefits and minimize the negative environmental impacts of a purchased product or service in every phase in its life cycle, from raw materials extraction to end-of-life management. The product approach generally involves the inclusion of environmental and social requirements in calls for tenders and contracts.
It is essential to validate the features of a product or service, and the product approach therefore often involves certification, labelling, life cycle analysis (environmental and social) and product declaration criteria or other external auditing processes. Life cycle analysis (environmental and social) constitutes a key tool in the product approach since it determines relevant environmental and social criteria and avoids shifting the impacts.
Social and environmental criteria in calls for tenders may be set out through various mechanisms, for example:
- Requirements detailed in the specifications
- Preferential margins for suppliers that meet criteria
- Qualification conditions for suppliers
- Weighted assessment grid
The product approach is a direct lever to promote social responsibility in the supply chain, and many organizations therefore rely on the method in the initial phases of their responsible procurement initiatives. Still, the approach must be carried out along with a more systematic strategy focused on supplier practices, especially when seeking compliance with labour standards at the production point.