The evolution of sustainable procurement 18th December 2017

Sustainable procurement, responsible sourcing, ethical procurement, green procurement or whatever new phrase you want to invent to confuse the issue, has evolved from a risk mitigation strategy to being part of the core value proposition of leading organisations.

Here is a personal view of how it happened.

In the beginning

Sustainable procurement is not new. Reputation risks have always existed in our supply chains which impact the resilience of our businesses or public services. In recent years this came to light in the sportswear industry where scandals involving child labour attracted negative publicity globally and in the nascent cellphone industry where public outrage at the idea that terrorists were running the tantalum mines providing raw materials for our latest gadgets gave rise to the expression “conflict minerals”. Similar risks in the jewellery and industrial diamond sector alerted us to “blood diamonds”. These emotive expressions much loved by the media had a profound effect on the way organisations consider the risks that lie deep in their supply chains.

As stakeholders became more interested in the wider environmental, social and economic impact of the organisations they engage with, various indices emerged; Dow Jones Sustainability Index, FTSE 4 Good, Business in the Community Index and many more. They all asked slightly different versions of the question “How well are you managing sustainability in your supply chain?” The universal answer was “not very well”.

Have we seen the light?

Governments committed in some way to sustainable development started to realise they could use the influence of their huge supply chain spend to influence corporate behaviour. In the UK, the Sustainable Procurement Task Force publication “Procuring the Future” introduced us to a systematic approach to Sustainable Procurement in 2006, the Flexible Framework. Chair Sir Neville Sims defined sustainable procurement as “using procurement to address wider social, economic and environmental objectives in ways that offer real long term benefits”.

In other words, we are no longer just talking about risk, it is about opportunity. I was proud to have been part of that Task Force but best practice has moved on in 12 years and those still wedded to the Flexible Framework need to look to more up to date guidance.

Codifying best practice

In 2010 in the UK and 2011 in France attempts were made to codify best practice into more formal standards. In the true spirit of Anglo-French co-operation, there was no dialogue between the two parties and, as far as I am know, no awareness that this was happening on both sides of a small stretch of water. My colleague Cathy Berry was technical author of the British Standard BS 8903, which went much further than the 2006 Flexible Framework in expecting procurement activities to be demonstrable in consistently addressing priority impacts. Much harder to achieve than a “tick box” exercise.

BS 8903 strategic framework   Action Sustainability (Trading) Ltd

After four years of debate and discussion with a wide range of national delegations, we have an international standard, ISO 20400.

The structure is very similar to BS 8903 with the exception that the “Fundamentals” of BS 8903 are now divided into two sections “Fundamentals” and “Policy & Strategy”.

ISO 20400 strategic framework   Action Sustainability (Trading) Ltd.

Between 2010, when BS 8903 was published and 2017, much had changed in the world of sustainable development. The UN Sustainable Development Goals and UN Guiding Principles on Human Rights and Business had been introduced, along with the concepts of complicity and due diligence which require organisations to take responsibility for bad stuff that happens in their supply chains at all levels. This is continuously being enshrined in legislation such as the Law On The Duty Of Vigilance For Parent And Subcontracting Companies in France, the Dodd-Frank Act in USA and the Modern Slavery Act in the UK among others. Check out Cathy Berry’s excellent comparison between BS 8903 and ISO 20400 on our global not for profit site www.iso20400.org.

Raising the bar

ISO 20400 is a guidance standard, not a requirements standard. This means you can’t be certified but you can be evaluated. The standard works well with ISO 14001 and ISO 26000 so if you are working with either or both of these standards, ISO 20400 will help you. If you are still hanging on to the old Flexible Framework from 2006 you may be in for a shock. Actually, if you think about how your computer, your car, your TV or your phone looked in 2006 and you may not be so surprised.

We recently conducted an evaluation of a client who claimed to be at Level 5 (the highest level) of the Flexible Framework (not evaluated by us), our assessment against ISO 20400 using a similar five-point scale saw them between levels 2 and 3. To align fully with ISO 20400, you need to be fully committed to due diligence throughout your supply chain for your prioritised impacts and categories and demonstrate consistency in your approach to procurement. Adopt the mantra “every red impact, every time” and you won’t go far wrong. Good luck with that!