Profit Through Ethics on Supporting local economies

Does your company have a policy to source goods and services from local suppliers?


We are very conscious of our local community, and how its health and vibrancy affects our business, but we are nonetheless a little short of a formal policy to support it through local sourcing.

PTE Ltd is an office-based company with the associated need for office consumables and business services, such as paper and IT equipment & support. We are based in Small Works King’s Cross, a small and unique co-working space based in an old laundry. Most of the office supplies and services are therefore not within our remit, like tea/coffee, but we do try to have our say about sourcing goods and services locally as and when we can. What makes this co-working space unique is that the organisation managing the space, Clear Village, is highly focused on generating positive impacts on the local community.

We prefer to purchase goods and services from independent or local suppliers in preference to national retail chains, where possible. However, sourcing products and services is also a balance between choosing 'close by' versus  'green'. Sometimes ’immediate need’ trumps both. Sometimes the services we require are not available locally. Sometimes we will purchase environmentally-friendly products from some distance away.

We try to support local, independent shops and traders. All new members of staff are made aware of the local, independent shops and lunch options. Staff regularly visit the local independent café at the Hugh Cubitt Centre for lunch. Sometimes by going a little further afield, it also means a healthy walk, some fresh air and investigation of the extraordinary cultural diversity and re-development of the Kings Cross area.

Answered at 05:46PM on 03 Tuesday Nov 2015

Local sourcing means that a business procures local or regional goods and services, and possibly also processes and sells them in the local or regional market, and thereby creates a sustainable business that benefits both its local suppliers and the company itself. This is a business strategy available to international companies and national chains as well as to local entrepreneurs.

When money is spent on goods and services within a local community, most of it remains in circulation within that community, usually in the form of money spent on other local products, inputs, services and staff wages (this is called the local multiplier effect). Generally, money used on goods and services that are not produced locally or spent in businesses based elsewhere will immediately leave the locality or region. Some campaigners claim national chains, such as supermarkets, siphon as much as 95 per cent of their takings out of the locality in which they are received.

A diverse local economy, providing secure employment and supporting a range of goods and services is almost certain to be more resilient, self-reliant and sustainable. Local sourcing, therefore, can be particularly important in invigorating economically depressed or vulnerable areas such as inner city neighbourhoods or rural communities. Sourcing locally may also help promote social cohesion, improve the quality of life for local people, promote customer loyalty, reduce the cost and environmental impact of transportation, and strengthen a company's relationships within the community - which is likely to be home to the majority of its employees and may also be its primary consumer base.

However, when considering procurement and local sourcing, an evaluation of both benefits and drawbacks will inevitably show that certain things are not available locally, or the quality may be inadequate or the price prohibitive.

To add further complication, sometimes the local choice isn't the best environmental one. For example, the carbon footprint of a product or commodity may be lower when produced elsewhere. Tomatoes grown in the hot sun of southern Europe and air-freighted to market may have a lower carbon footprint than those grown in an artificially heated, poly-tunnel environment in northern Europe.

As such, when considering sourcing goods and services locally, the decision generally comes down to finding a balance between local sourcing and other considerations that are appropriate for the business. Answering this question provides a business the opportunity to explain if and how it has reached such a balance.

Local suppliers

'Local suppliers' are those with operations restricted to a particular geographic area in which the sourcing business also has operations. The definition may includes suppliers operating nationally or multi-nationally if they have practices and policies to source locally, as appropriate to their various locations.


'Local' may be defined by a business. For example, businesses located in rural areas may need to use a wider radius to define 'local' than those based in an urban areas.

Answering YES

All Businesses MUST

Summarise the value chain of the business

Define 'local' relative to their operations, size, sector and value chain

Explain how their activities are focused locally, describing their approach or strategy, and providing examples

Explain any policies or practices which may have negative impacts on the economies local to their operations, and whether they have plans to scale down or mitigate any such activities

All Businesses MAY

State any philosophies or values which influence their approach to the economies local to their operations

Explain whether they have a written policy which describes their approach to the economies local to their operations, and whether it is publicly available

Describe the proportion of spend that is local or the percentage of company turnover that remains within the local community

Explain whether any of their operations are located in economically depressed or vulnerable communities

Describe if and how they influence others to support or strengthen the local economy

Provide any other relevant information

Answering NO

All Businesses MUST

Explain why they do not or cannot answer YES to this question and list the business reasons, any mitigating circumstances or any other reasons that apply

All Businesses MAY

List any practices that are relevant, but not sufficient to answer YES

Mention any future intentions regarding this issue

DON'T KNOW is not a permissible answer to this question

NOT APPLICABLE is not a permissible answer to this question

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