Purchasing represents a significant piece of a company’s budget. In the public sector alone, procurement accounts for around 12 percent of GDP and 29 percent of government expenditure in OECD member countries.
So it makes sense that when considering sustainability initiatives, executives should take purchasing decisions into account.
An ISO standard in the final stages of development aims to help companies with sustainable procurement, and can be applied to all purchases from office supplies to energy providers, caterers and building materials.
ISO 20400, Sustainable procurement – Guidance, has just reached a second draft international standard stage, meaning interested parties can submit feedback via their ISO member on the draft before final publication in 2017.
ISO says because sustainable procurement is a key aspect of social responsibility, ISO 20400 will complement ISO 26000, Guidance on social responsibility, by enabling organizations to contribute to sustainable development efforts by minimizing their impact on the environment, tackling human rights issues and contributing to society and the economy.
“For many organizations, sustainable procurement is already featured in their sustainability reports, yet there is a distinct lack of clear guidelines on how to implement and measure sustainable procurement practices,” said Jacques Schramm, Chair of ISO/PC 277, the committee developing the standard. “Using ISO 20400 will therefore help organizations achieve their sustainability objectives, improve management of supplier relations, improve the sustainability efforts of their supply chain and give them a competitive edge.”
Moving in tandem to ISO 20400, the nonprofit Sustainable Purchasing Leadership Council is currently developing a Sustainable Purchasing Benchmarking System. SPLC’s director of outreach and operations Sam Hummel says the benchmarking system will be consistent with the ISO 20400 approach and help organizations identify high-impact sustainable procurement opportunities.
“ISO 20400 reflects growing awareness that procurement decisions have an outsized influence on the sustainability of organizations, communities, and the planet,” Hummel said. “Increasingly, leaders are applying social, environmental, and economic sustainability principles to their procurement programs and supply chains – with consistently positive results.”
Last year, following the release of its Guidance for Leadership in Sustainable Purchasing v1.0, more than 80 organizations with more than $100 billion in purchasing power tested the guidance in SPLC’s pilot program. These included Ecolab, Lockheed Martin, Office Depot, the US General Services Administration and the EPA.
“In 2017, SPLC will add a Rating System for Leadership in Sustainable Purchasing on top of the Benchmarking System, which will allow organizations implementing best practices guidance such as ISO 20400 to seek third-party recognition for their leadership,” Hummel said.
As companies increasingly move beyond the low-hanging fruit such as recycling and lighting efficiency in their sustainability efforts, expect to see attention shifting to sustainable purchasing decisions.