Certified Environmental Social and Governance Analyst (CESGA) EFFAS Practice Test 2026 - Free CESGA Practice Questions and Study Guide

Ethical sourcing refers to the procurement of goods in a manner that considers environmental and social impacts. This concept emphasizes not just the financial aspects of purchasing decisions but also the ethical implications associated with how goods are produced, sourced, and supplied. It encourages businesses to ensure that their suppliers adhere to certain standards concerning labor practices, human rights, and environmental sustainability.

For instance, ethical sourcing would involve evaluating whether a supplier uses sustainable practices, treats workers fairly, and does not exploit local communities. By adopting ethical sourcing practices, organizations can reduce their environmental footprint and promote social responsibility, aligning their operations with broader Environmental, Social, and Governance (ESG) criteria.

The other choices, while related to procurement, do not capture the full essence of ethical sourcing. Simply focusing on the lowest cost disregards the ethical implications of sourcing decisions. Purchasing exclusively from local suppliers or fair trade products may enhance sustainability and social equity in some instances, but they do not encompass the broader spectrum of considerations involved in ethical sourcing. It’s the comprehensive evaluation of both environmental and social impacts that defines ethical sourcing accurately.