The International Organisation for Standardisation, ISO, has recently released ISO 20400, the world’s first international standard for sustainable procurement. According to ISO, businesses that embrace sustainable procurement are “making purchasing decisions that meet an organization’s needs in a way that benefits them, society and the environment.”
The new standard “involves ensuring that a company’s suppliers behave ethically, that the products and services purchased are sustainable and that such purchasing decisions help to address social, economic and environmental issues.”
Kate Harris, CEO of Good Environmental Choice Australia (GECA), will be speaking about the ISO 20400 standard at Green + Building 2017 on July 7 and 8 at the Melbourne Convention and Exhibition Centre. According to Harris, confusion around ecolabels led to the creation of the new standard, which GECA contributed to. Many firms wanted to adopt sustainable practices across the board, but were confused about how to actually implement many sustainable practices.
“Ecolabels were created to simplify something really complex, but it got lost in translation,” Harris said. “People weren’t able to interpret or embed sustainability meaningfully in their organisation.”
That difficulty also created a significant supply-chain risk, Harris said, as companies couldn’t ensure that their suppliers embraced sustainable practices. Procurement teams have been working internally to create processes, but needed a standard that would apply across industries.
Australia’s property and development sectors have been pushing sustainable procurement solutions and products for quite a long time, according to Harris, and ISO 20400 will enable easier adoption of sustainable practices. Wide adoption of the standard will also engender more competition among firms to procure sustainably.
“With that comes an increased push of manufacturers’ expectations, needing to be more competitive and shifting their products and manufacturing processes to be able to meet those supply chain expectations,” Harris said.
Some firms also perceived a reputational risk associated with sustainability, but other firms simply wanted to do the right thing, she noted.
“The conversation has become so much about leadership, of being responsible and practising conscious consumption about everything,” Harris said, adding that without a standard, they didn’t know how to achieve that goal.
“A good lot of firms are driven by leadership and responsibility and having capacity to do something about it,” she said. “In Australia at the moment, the lack of politically mandated green public procurement policy means that business leadership must rise to it.”
That sort of organisational leadership raises the bar for all players in a sector, Harris noted.
All types of firms, Harris said, need to sort out sustainable procurement not only for their products and services, but also for their operations.
“If you look at Barangaroo, what’s in the cafeteria? What food are you serving your staff? Where does that food come from? Where is the obligation to your staff in terms of that procurement? Where is the obligation of care to the people that manufacture those things that benefit your staff?” she asked.
Harris expects demand for ISO 20400 to be strong, as third-party certifications and ecolabels are seen in the marketplace as a significant solution for developing sustainable procurement systems. Of course, they also obviate the need for companies to create their own standards, saving time and money.
“People have struggled with how to do it. Now there’s an international guideline that’s been contextualised to every nation,” Harris said. “ISO 20400 gives you a good solution of how to continue to drive change up and down your supply chain.”