In 2017, an international standard for sustainable procurement will be introduced. Shaun McCarthy reveals what you can expect from it.
It is 10 years since Sir Neville Simms published his influential paper Procuring the Future. This was advice from a business-led taskforce on how to improve social, economic and environmental sustainability through public procurement. These ideas were further developed in the British Standard BS 8903, which introduced a systematic approach to delivering sustainability through supply chains. Now work is well underway on an international standard, ISO 20400. It has been three years in development and involves 40+ countries and influential international bodies such as UN Environment Programme, International Trade Union Confederation and Organisation for Economic Cooperation and Development. The expected publication date is early 2017. Like BS 8903, it is a guidance standard, so organisations cannot be certified against it but you can ask a competent organisation to perform an independent evaluation report and make recommendations.
Much has changed since 2006. Sustainability is more complex and demands are higher than ever before. International accords such as the UN Guiding Principles on Human Rights and Business and the Paris Climate Change Agreement are driving governments and businesses towards more responsible behaviour. In the USA, the Dodd-Frank Act addresses conflict minerals. In the UK, Acts related to climate change, bribery, equalities, social value and modern slavery compel us to do things differently, and corporate best practice from the likes of Unilever and M&S inspire us to.
We all rely on supply chains and the impact of supply chain failure as a result of natural disasters such as the Fukushima tragedy and man-made calamities such as the Rana Plaza building collapse have highlighted just how fragile these chains can be. Sustainability is higher on the agenda of large private and public organisations around the world but the demand is translated to the supply chain inconsistently. In addition, many suppliers have limited understanding of the subject matter and fewer suppliers are competent to deliver on the increased demand.
The inevitable consequence of this higher demand, poorly communicated to a supply chain with few competent to deliver will be an increase in prices, perpetuating the myth that sustainability costs more. If we are to succeed in delivering sustainability through our supply chains we must be consistent in our approach, develop competitive, competent supply chains and measure the results of our work.
The international standard attempts to offer guidance on how to navigate these stormy waters. It has a similar structure to BS 8903 but brings in new concepts and standards that did not exist when it was published in 2010.
It comes in four main sections:
• Fundamentals: this covers the general principles of sustainability and corporate responsibility. It also helps the user to understand what drives them to want to procure sustainably. This is very important to understand how to set targets.
• Integrating sustainability into the organisation’s procurement policy and strategy: it is vital to align the sustainable procurement goals with the high level strategy of the organisation and with the procurement strategy.
• Organising the procurement function towards sustainability: this was called ‘enablers’ in BS 8903, but this expression would not translate well into a number of languages. It covers the organisational conditions necessary to deliver sustainable procurement. This is a very important section that covers governance, setting priorities, developing people, supplier engagement and measuring performance.
• Procurement process: this has a similar title to BS 8903. It covers how to do procurement differently to deliver sustainability.
Ten years after Procuring the Future, we are on the verge of an international standard to put sustainable procurement on the world map.
Shaun McCarthy is director of Action Sustainability and chairman of the Supply Chain Sustainability School. He was awarded an OBE in 2013 for services to sustainability and the London Olympics.