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Sustainable procurement: a tipping point for suppliers?

The world’s first international standard for sustainable procurement has now been launched, with more and more companies seeking to manage environmental impacts in their supply chain.

The world’s first international standard for sustainable procurement has now been launched, with more and more companies seeking to manage environmental impacts in their supply chain.

ISO 20400, published in April, aims to help organisations of any size to develop and implement sustainable purchasing practices and policies.

It provides guidelines to ensure 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.

Accelerating trend

The move complements the increasing interest from larger companies in showing transparency and accountability in their efforts to improve sustainability. 

Almost 50 per cent of Fortune 500 firms have now made explicit commitments to reduce their environmental impact or improve energy efficiency - up from just 5 per cent only three years ago.

Many of these companies are including their supply chain in their plans. For example, retail giant Walmart has recently launched Project Gigaton - a plan to cut one billion tonnes of carbon emissions from its supply chain by 2030.

Managing risks

Jacques Schramm, chair of the project committee that developed the new standard, said: “It is no longer enough for businesses to rely on suppliers to provide them with what they want, no questions asked. 

“Organisations benefit greatly from getting to know their suppliers – understanding what their requirements are as well – to ensure their demands are not unrealistic and that the suppliers they work with have good, ethical practices.

“The risks of not understanding and managing practices throughout the whole supply chain are great. Sustainable procurement helps to minimise risks by encouraging buyers and suppliers to work closely together for a better result for all.”

ISO 20400 is understood to be most relevant for companies in manufacturing, construction, facilities management, hospitality, catering, clothing, food, and public sectors.