Holding Redlich partner, Scott Alden, provides an introduction to the world's first international standard for sustainable procurement ISO 20400.
The standard aims to help businesses meet their sustainability responsibilities by providing guidance on the effective implementation of sustainable purchasing practices and policies.
Under the ISO, sustainable procurement is defined as “procurement that has the most positive environmental, social and economic impacts possible across the entire life cycle and that strives to minimize adverse impacts.”
ISO 20400 also lists a range of principles to be upheld if an organisation is to embrace sustainable procurement, including accountability, transparency, ethical behaviour, respect for human rights and a focus on innovation and improvement.
In integrating these principles organisations must balance the following issues:
1. The triple bottom line – development that meets the needs of the present without compromising the ability of future generations to meet their own needs (Brundtland report, 1978); and
2. Social Responsibility – responsibility of an organisation for its impact on society and the environment through transparent and ethical behaviour.
Sustainable procurement is a central tenet of social responsibility and it is envisaged that ISO 20400 will complement ISO 26000:2010, Guidance on social responsibility.
This is because ISO 20400 directs organisations to minimise their environmental footprint, review their impact on human rights and act to positively contribute to society and the economy.
To this end, important practices explored in ISO 26000 such as due diligence, analysing the sphere of influence, setting priorities and avoiding complicity are all practices encouraged in ISO 20400.
The ISO is divided into four clauses which provide guidance applicable for different levels of management. Integration between these diverse industry players is critical to the ISO’s ability to achieve its sustainability objectives.
Clause 4 Understanding the Fundamentals is a generalist clause which discusses what sustainable procurement involves and its strategic goals. It also outlines fundamental practices such as due diligence, risk management and priority setting.
Clause 5 Integrating Sustainability into the Organisation’s Procurement Policy and Strategy provides guidance to top-tier management on bridging the gap between sustainable procurement strategy and organisational policy.
This clause clarifies the importance of mandating sustainability objectives within the organisation at all levels and in particular, stresses the importance of accountability and sustainable supply chains.
Clause 6 Organising the Procurement Function towards Sustainability is most applicable for people engaged in procurement management and outlines the techniques to be employed to enable successful implementation, namely enabling people, engaging stakeholders, setting priorities and measuring performance.
Clause 7 Integrating Sustainability into the Procurement Process is directed towards individuals managing sourcing activities and contracts. It provides practical guidance regarding implementing sustainable procurement at each stage of the process including planning, supplier selection and contract management and review.
About the Author
Holding Redlich partner, Scott Alden advises clients in relation to commercial contracts, procurement and probity. He has specific expertise in government and commercial law, infrastructure projects, general contractual and legislative advice and the tendering process and commercial contracts of all kinds and sizes and for all industries. Visit http://metispd.com/