Table 1. Common approaches taken by companies to ensure that sourcing complies with sustainability commitments.

This includes a summary of how each approach addresses risks in indirect sourcing as well as their strengths and weaknesses in delivering more sustainable commodity sourcing.

Sustainable sourcing strategy	How addresses risks in indirect sourcing	Strengths	Weaknesses	Interdependencies	Examples
Increased direct sourcing	Reduces indirect sourcing	Reduces transaction costs and information asymmetries as focal company has direct contract with (or owns) the properties producing raw materials (44)	Increases market concentration; can exclude local actors; may increase costs if companies outstretch their core competencies; impact of sustainable procurement efforts are limited to own supply chain; can result in bifurcated supply chains if buyers shift supply to low-risk regions	Requires transparency or certification of on-farm activities (e.g., zero deforestation) to be externally demonstrable	Between 2018 and 2019, the soy trader Viterra increased direct sourcing in “priority municipalities” in Brazil’s Matopiba region from 42.9 to 64.9% (88, 89)
Cascading compliance	Requires direct suppliers to, in turn, engage with their suppliers and communicate sustainable procurement requirements	Low cost for focal company (41)	Passes burden of enforcing compliance to actors with (in many cases) lower capacity (41); impact remains limited to actors in own supply chain	Requires transparent third-party audits or certification to be externally demonstrable (41)	Few examples by agricultural commodity traders; more commonly used by downstream companies, e.g., Consumer Goods Forum Forest Positive Coalition of Action members that pass compliance requirements onto traders and other suppliers (77)
Certification	Provides evidence that producer meets certification standard without requiring the trader to monitor or have direct relationship with producers	Recognized by consumers; downstream companies do not necessarily need to identify product origin when buying certified products; mass-balance or book-and-claim approaches keep costs low	Low additionality (48); risks market bifurcation; book-and-claim and mass-balance approaches hinder traceability and create disconnect between product labels and content (90); low transparency leads to questions over audit quality	Can be implemented at multiple scales (farm, cooperative, or landscape), though usually implemented at farm or cooperative level	Rainforest Alliance/UTZ and Fairtrade for cocoa, RSPO for palm oil, RTRS for soy
Traceability	Seeks to track all sourcing back to farm	Increases focal company’s understanding of their supply chain and sourcing risks; makes engagement between trader and producers possible (e.g., around zero deforestation requirement, preferable contracts, and market access)	Requires segregation for commodities that are traditionally stored and processed in bulk; because of costs, often limited to direct supply chains only or to “high-risk” regions (57); where optional, it risks market bifurcation; doubts over reliability of some farm-level mapping exercises (9, 56)	In itself, traceability does not affect the mode of production of a commodity; thus requires cascading compliance or communication of sourcing standards to induce a change at the farm level; requires transparency or certification for sustainability claims to be externally demonstrable	Between 2019 and 2020, the oil palm trader Musim Mas increased traceability back to the plantation from 49 to 66% (53); in 2020, Minerva monitored 3770 direct suppliers in Brazil for deforestation (91)
Transparency	Open communication of progress (e.g., on traceability, risks, implementation measures, and outcomes) and challenges implementing sustainable procurement practices in direct and indirect sourcing	Allows companies to communicate with consumers about product origins and demonstrate progress against sustainability targets; discourages greenwashing and malpractice (61)	Data disclosures are nonstandardized; where optional, it risks market bifurcation (61); limited by data availability (e.g., may only focus on the direct supply chain)	A prerequisite for transparency is knowledge of both the focal company’s supply chain (e.g., through traceability, certification, or information on suppliers) and on-the-ground impacts (e.g., through independent or own satellite monitoring) (61)	Leading cocoa traders have disclosed which cooperatives they source from in Côte d’Ivoire (55)
Landscape approaches	Internalizes all production practices—among both direct and indirect suppliers—within the landscape where commodity originates	The only approach that captures land use dynamics outside of monitored supply chains; seeks to build capacity and identify solutions across sectors (74); avoids redundancy between overlapping certification and corporate sustainability programs; jurisdictional sourcing efforts reward jurisdictions that implement sustainable land use plans (75)	Challenging to create inclusive, consensus-led initiatives in regions that often have weak governance; for additionality, must go beyond high/low-risk rating systems; need committed buyers to support jurisdictional sourcing and expand beyond a small number of target landscapes	Requires certification and/ or transparent monitoring and evaluation to be externally demonstrable	Amazon Soy Moratorium, RSPO jurisdictions; SourceUp initiative links agri-commodity companies with multi-stakeholder initiatives in producing regions