Environmental and social criteria in supplier evaluation - Lessons from the fashion and apparel industry

Due to environmental and social problems with suppliers, companies have included sustainability criteria in their supplier evaluation. However, there is little research on the application of environmental and social criteria and related purchasing practices. Therefore, the objective of this study was to examine how companies apply environmental and social criteria in supplier evaluation. Interviews with purchasing experts from the fashion and apparel industry were conducted. The results indicate that no child labour, working hours, no forced labour, no discrimination, employment compensation, freedom of association, and health and safety practices are commonly used as social criteria, whereas end-of-pipe control (wastewater treatment systems) and environmentally friendly materials are used as environmental criteria. New criteria, for example, housing conditions and home worker conditions, were identified as not having been suggested in the literature on supplier evaluation. The discussion herein examines the application and the importance of sustainability criteria in the supplier evaluation process. Environmental and social criteria are applied in pre-qualification as well as verification of the compliance of the purchasing requirements in supplier controlling. However, these criteria are not important in the final selection of a supplier for an order as is often recommended in the literature. Consequently, sustainability criteria are indeed important for supplier evaluation but do not carry the same importance that many papers assign them. The research findings contribute to the literature on sustainable supply chain management with empirical insights about the application and importance of environmental and social criteria in supplier evaluation. Furthermore, the identified sustainability criteria can be used by practitioners to improve supplier evaluation efforts.