ISO 20400: 7 Key Principles of Sustainable Procurement

What Is ISO 20400?

ISO 20400 (published 2017) supports organisations hoping to procure goods and services responsibly. This helps them align their procurement strategies with their broader environmental goals. 

Here is what the Standard covers:

• Procurement: ISO 20400 offers clear guidance on how to refine the overall procurement process. This helps businesses become more sustainable.
• Supplier engagement: As a part of this, the Standard outlines the need to choose suppliers well. It encourages companies to avoid corrupt partners.
• Leadership commitment: As with many ISO Standards, change only takes root at the top. Strong governance is the only way for ISO 20400 to work.
• Strategic framework: This Standard does not clearly state which products are sustainable. Instead, it gives you the framework to assess this yourself.

If your company is aiming to improve its supply chain, adopting ISO 20400:2017 is a valuable way to do so. 

Why ISO 20400 is Essential for Sustainable Procurement?

In recent years, environmental compliance has become a necessity. Companies are now more aware of how their actions affect the world around them. Clear sustainability Standards are absolutely critical, across any sector.

The wrong purchasing decisions can greatly impact the environment. You might source a product that uses a conflict mineral, opt for a plastic product with no recyclability, or choose a supplier that relies too heavily on coal or oil. These actions can both contribute and boost demand for unsustainable practices.

With ISO 20400, sustainable procurement is much simpler. Companies will know how to pick their suppliers well, for example. This alone can stop their money from indirectly funding deforestation, pollution, and other environmental ills.

ISO 20400’s sustainable procurement guidance is non-certifiable—it is exclusively a series of recommendations. However, it still stands as a mark of quality. Making an effort to commit your business to this Standard shows you take environmental matters seriously.

7 Key Principles of ISO 20400 Sustainable Procurement

The ISO 20400 Standard defines seven sustainable procurement principles. These have their roots in ISO 26000, a Standard for social responsibility. Any organisation implementing this guidance must follow all seven. 

The seven sustainability tenets that ISO 20400 uses are:

1. Governance

A business needs rigid decision-making structures to ensure accountability. This can involve establishing sustainability-specific roles in an organisation. Decisions must align with the company’s sustainability goals. Stakeholders should lead the charge and commit to ethical practices.

2. Human Rights

Businesses must abide by the Universal Declaration of Human Rights and other relevant laws. Their due diligence must identify potential human rights hazards across any procurement decision. This is vital when working with suppliers from conflict-stricken areas.

3. Labour Practices

Companies, suppliers, and contractors must address any labour issues. Workers throughout the supply chain require decent working conditions, wages, breaks, and access to clean water. Workplaces must also follow health and safety laws.

4. The Environment

ISO 20400 states that companies should avoid contributing towards air and water pollution. They should use sustainable resources where possible, and aim to stay carbon-neutral. For additional guidance, ISO 14001 also covers environmental Standards.

5. Fair Operating Practices

Organisations must be ethical in how they interact with one another. ISO 20400 is clear about establishing anti-corruption, anti-bribery, and anti-fraud rules. Firms should also avoid price-fixing and anything else that harms fair competition.

6. Consumer Issues

ISO bases this principle on the United Nations’ consumer guidelines. Companies should use fair marketing and universal design to remain ethical while providing goods and services. The goods themselves should also ideally be sustainable.

7. Community Involvement

An organisation following ISO 20400 must respect the surrounding communities’ rights. They should ideally work directly with these communities. This can mean setting up initiatives that protect areas producing the goods they procure.

How ISO 20400 Helps Organisations Implement Sustainable Practices

ISO 20400’s sustainable procurement assistance can help your business in many ways. Here are the main benefits that companies can expect::

• Risk reduction: ISO 20400 helps firms anticipate and better navigate risks. They can be sure they aren’t causing environmental damages.
• Cost savings: The Standard also asks companies to be more efficient. This lowers waste management expenses and energy fees.
• Better supplier relationships: ISO 20400 encourages businesses to build longer-lasting relationships with suppliers who share their values.
• Stronger brand image: This Standard helps firms embrace sustainability as part of their image. They can then attract eco-conscious customers.
• Helping communities: Adopting sustainable practices also means helping the people you work with. This includes donating to their development.

With ISO 20400, businesses can reliably source goods ethically. This ensures they do less harm to the environment and the communities who rely upon it.

ISO 20400:2017 vs Other Sustainable Procurement Standards

This Standard intersects with a number of other sustainability guidelines. Here is how ISO 20400:2017’s sustainable procurement rules compare to them:

• GRI 204: This Standard is primarily about reporting procurement issues with regard to sustainability. ISO 20400 offers a more extensive framework.
• ISO 26000: This is ISO’s general Standard on social responsibility. ISO 20400 does take cues from it, but focuses more on procurement specifically.
• SA8000: SAI’s certifiable SA8000 Standard mainly looks at sustainable work practices. ISO 20400 also includes environmental and economic factors.
• BS 8903: This British Standard also focuses on sustainable procurement. In 2017, ISO 20400 actually superseded it due to its broader applicability.
• UN SDG 12: This UN goal looks at production issues, such as procurement. ISO supports this goal directly through its 14001 and 20400 Standards.

ISO 20400 builds upon these goals and Standards. This helps it offer up-to-date guidance on building robust sustainability measures.

Conclusion: Adopting ISO 20400 for Sustainable Procurement Success

ISO 20400 helps companies of all kinds lead sustainability policy by example. The guidance is applicable for any industry, and even small firms can adopt it.

This Standard shows your organisation is able to look critically at its own sourcing processes. It also lets your business appeal to eco-conscious clients.

However, the main reason to use ISO 20400 is that it is the right way forward. With this Standard’s guidance, your company will help build a more sustainable future for our planet.