Sustainable Procurement: Standards Alert!

Richard Phillips

Can organisations be truly sustainable if the environmental and social impacts of their purchasing decisions are not considered?

The answer is no. Businesses must look across their value chain at impacts, including with suppliers.

Luckily, new guidelines have been designed to help corporations achieve a sustainable procurement strategy.

Sustainable procurement is the practice of sourcing responsibly. This means purchasing items and services that cause minimal negative impact. Better still, sustainable procurement can create positive value. Supporting renewable energy, creating jobs and paying fair wages are just some of the favourable outcomes.

Sounds simple? Well, purchasing choices have many far-reaching impacts. There are often multiple tiers of suppliers – often dealing with different issues. Visibility over the supply chain, particularly for a large multinational, can be a minefield. Achieving sustainability in procurement is therefore tricky business.

The absence of unified international guidelines hasn’t helped. This is about to change.

ISO 20400 is the new standard for sustainable procurement, to be published in early 2017. It follows a lengthy development process which started in 2013 by a committee from over forty nations.

The Standard will provide guidelines on how organisations can integrate sustainable principles into procurement practices. This is designed to create a step change in the implementation of responsible sourcing strategies.

Building on BS 8903, a British Standard for sustainable procurement, the new guidelines will consider the most recent, relevant developments in sustainability. This includes the UN Guiding Principles on Human Rights and Business, which gives businesses responsibility in mitigating and remedying human rights abuses they cause or contribute to – a key issue for many supply chains.

The standard will accompany ISO 26000, the Social Responsibility Guidance Standard. Organisations should therefore be able to incorporate ISO 20400 with existing sustainability guidelines. This allows sustainable procurement to slot into an overall sustainability strategy.

But ISO 20400 is a guidance standard only; it is not a requirements standard. It will provide a best practice framework for implementing sustainable procurement strategies. It will not certify compliance.

“So why should we bother?” companies may say. “We want our good work to be recognised”.

The sustainability arena is crowded with standards, rankings and awards – a theme explored by my colleague Charlie three years ago. The space has only become more crowded since then. It can be overwhelming for corporate responsibility practitioners. It is therefore tempting to write-off any standard that is not certifiable.

This would be a mistake.

ISO 20400 being a guidance standard only is a blessing for businesses. Companies can be selective in the elements they adopt. They can become accustomed to the Standard without the pressure of meeting requirements.

Whilst there will be no shiny certificate to wave, a conscientious business will recognise the opportunities of ISO 20400 and sustainable procurement.

For one, organisations will be able to demonstrate their responsibility across the supply chain. This could help to satisfy growing stakeholder demands. It would also contribute to a sustainable image whilst having substance. This is increasingly important in attracting customers. A report (2015) by Nielsen revealed 66% of consumers are willing to pay for sustainable brands, up from 50% in 2013.

With the imminent arrival of ISO 20400, sustainable procurement is now on the agenda at a global scale. But like any standard, index or assessment – the guidance is only as good as the implementation. Companies need to ensure they get business value out of the standard – rather than using it as a tick box exercise. Businesses can then identify the opportunities and start integrating the principles into their sustainability strategy.

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