First global standard for sustainable procurement hits the market
ISO 20400 will help companies vet their supply chains for ethical and environmental impact.
After four years of development, the first international standard for sustainable procurement was launched late last week by the International Standards Organisation (ISO).
The first standard of its kind in the world, ISO 20400 aims to help companies make better purchasing choices throughout their supply chains by establishing guidelines for companies to judge suppliers on ethical and sustainability issues.
Jacques Schramm, chair of ISO/PC 277, the committee which developed the standard, said it would help organizations avoid the financial, environmental and reputational risks associated with poor supply chain management.
"The risks of not understanding and managing practices throughout the whole supply chain are great," he said in a statement. "At best, poor quality products or ruptures of stock can result. At worst, disasters like the Rana Plaza in Bangladesh in 2013 can happen. Sustainable procurement helps to minimize risks such as these by encouraging buyers and suppliers to work closely together for a better result for all."
ISO 20400 boasts 38 participating countries and 14 observing nations, together representing 65 percent of the world's population, 85 percent of global GDP and 73 percent of carbon emissions.
As well as environmental considerations, it also takes account of social and economic sustainability when judging what sustainable purchasing looks like.
"It is no longer enough for businesses to rely on suppliers to provide them with what they want, no questions asked," Schramm said. "Organizations 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."
Unlike many other ISO standards, ISO 20400 is a guidance standard rather than a certification standard. As such, companies cannot become ISO 20400 certified, and instead the aim is to build a global consensus around the key terms and expectations for responsible procurement.
ISO said it will complement the existing ISO 260000 standard on social responsibility.
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