Procurement plays a large role in any organization, large or small. Who an organization buys from has just as big an impact on its performance as what it buys. Ensuring suppliers have sound and ethical practices – across everything from working conditions and risk management to their environmental impact – has the potential to not only make businesses work better, but to improve the lives of everyone in the communities where they are situated.
Sustainable procurement entails making purchasing decisions that meet an organization’s needs in a way that benefits them, society and the environment. It involves ensuring that a company’s suppliers behave ethically, that the products and services purchased are sustainable and that such purchasing decisions help to address social, economic and environmental issues.
ISO 20400, Sustainable procurement – Guidance, is the world’s first International Standard for sustainable procurement and aims to help organizations develop and implement sustainable purchasing practices and policies.
Jacques Schramm, Chair of ISO/PC 277, the project committee that developed the standard, says the benefits of sustainable procurement can be far-reaching. “It is no longer enough for businesses to rely on suppliers to provide them with what they want, no questions asked. Organizations benefit greatly from getting to know their suppliers – understanding what their requirements are as well – to ensure their demands are not unrealistic and that the suppliers they work with have good, ethical practices,” he explains.
“The risks of not understanding and managing practices throughout the whole supply chain are great. At best, poor quality products or ruptures of stock can result. At worst, disasters like the Rana Plaza in Bangladesh in 2013 can happen. Sustainable procurement helps to minimize risks such as these by encouraging buyers and suppliers to work closely together for a better result for all.”
ISO 20400 provides guidelines for integrating sustainability into an organization’s procurement policy strategy and process, defining the principles of sustainable procurement such as accountability, transparency, respect for human rights and ethical behaviour.