The International Organization for Standardization has published the world’s first international standard for sustainable procurement in an effort to provide companies with a way to ensure their supply chains adhere to the same level of ethics as their shareholders have called for them to behave.
Published on April 21, ISO 20400, Sustainable procurement – Guidance, is the world’s first International Standard for sustainable procurement. Sustainable procurement is the idea that suppliers have the same ethical practices as the procuring company — dealing with ethical issues ranging from working conditions and risk management all the way through to environmental practices. In this way, procurement companies will be able to ensure that the supply companies they deal with are adhering to practices that fit in line with their own ethical guidelines.
“Procurement is a powerful instrument for organizations wishing to behave in a responsible way and contribute to sustainable development and to the achievement of the United Nations Sustainable Development Goals. By integrating sustainability in procurement policies and practices, including supply chains, organizations can manage risks (including opportunities) for sustainable environmental, social and economic development.”
ISO 20400 provides guidelines for organizations on how to integrate sustainability into an organization’s procurement policy strategy and process, as well as defining principles of sustainable procurement such as accountability, transparency, respect for human rights, and ethical behavior. “Sustainable procurement represents an opportunity to provide more value to the organization by improving productivity, assessing value and performance, enabling communication between purchasers, suppliers and all stakeholders, and by encouraging innovation,” the Introduction to the Standard explains.
More and more, companies are being herded towards ensuring their investments and supply chains are up to the same standard that shareholders expect of the company itself. It’s all very well and good for Apple, for example, to assert that all of their products are manufactured on sites powered 100% by renewable energy, but if the components of those same products are made by supply companies powered exclusively by coal — and manufactured by children under the age of 13 — then Apple’s promises mean little. A new International Standard for sustainability is a way to ensure that every step along the supply chain is adhering to a sustainable approach to business.
“It is no longer enough for businesses to rely on suppliers to provide them with what they want, no questions asked,” explained Jacques Schramm, Chair of ISO/PC 277, the project committee that developed the standard.
“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.”
“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.”