This blog will take an in-depth look at ISO 20400, its structure, principles, and benefits, as well as how organisations can effectively implement it.
Sustainability is not a new topic, however, many organisations and newly installed procurement professionals with the word “sustainable” in the title are asking themselves:
“How do I create and maintain an industry standard sustainable procurement organisation?”
Today we will explore ISO20400 the International Standard for Sustainable Procurement as a means of achieving this. In a world where environmental and social responsibility is increasingly central to business operations, companies are more committed than ever to achieving sustainability. One key area where this shift is evident is procurement. The process of purchasing goods and services has far-reaching impacts, not just on profitability but also on the environment, society, and the global economy.
ISO 20400 provides guidance to organisations on how to integrate sustainability into their procurement processes. It does not impose requirements but rather offers a framework that helps businesses of all sizes and industries ensure that their procurement practices are aligned with their sustainability goals. This blog will take an in-depth look at ISO 20400, its structure, principles, and benefits, as well as how organisations can effectively implement it.
ISO 20400, published in April 2017 by the International Organisation for Standardisation (ISO), is a global standard focused on sustainable procurement. It provides guidance for organisations seeking to integrate sustainability into their procurement processes, considering the environmental, social, and economic impacts of their purchasing decisions.
It builds on the concept that procurement decisions affect more than just financial outcomes. Every purchase an organisation makes can have environmental and social implications—ranging from resource extraction to workforce practices, and from the energy used in production to the disposal of products after their useful life. ISO 20400 aims to help organisations understand and mitigate these impacts, ensuring that they promote positive sustainability outcomes throughout their supply chains.
Sustainable procurement goes beyond traditional procurement practices, which focus solely on cost, quality, and delivery times. Sustainable procurement looks at the entire lifecycle of goods and services, from extraction and production to disposal and recycling, with the goal of minimising negative impacts on the environment and society.
Some reasons why sustainable procurement is critical:
ISO 20400 provides a framework that enables organisations to integrate sustainability into their procurement processes. The standard is divided into several sections, each of which offers guidance on different aspects of sustainable procurement:
The scope of ISO 20400 defines the standard’s applicability to all types of organisations, whether public or private, and regardless of size or sector. The standard is not meant to be prescriptive but rather serves as a flexible guide that organisations can adapt to their unique contexts and sustainability objectives.
This section outlines key terminology used throughout the standard. Clear definitions are provided for terms such as “sustainable procurement,” “life cycle,” “stakeholder,” and “supply chain.” These terms form the foundation of the sustainable procurement process and ensure consistency in interpretation.
This is a core part of ISO 20400 and includes the basic principles, drivers, and considerations that organisations should account for in their procurement strategies. The section outlines the following key concepts:
For successful implementation of sustainable procurement, organisations need to develop clear policies and strategies. ISO 20400 provides guidance on how to integrate sustainability into procurement policy by:
A sustainable procurement policy serves as a foundation for decision-making and prioritisation, helping procurement teams focus on critical sustainability issues relevant to the organisation’s operations.
This section provides guidance on how organisations can structure their procurement functions to support sustainable procurement. It emphasises the need for:
The procurement process itself is divided into various stages, and ISO 20400 offers guidance on integrating sustainability into each of these stages:
Implementing ISO 20400 is a strategic process that requires careful planning and collaboration across the organisation. Here are some steps to help guide implementation:
Start by conducting a thorough assessment of your current procurement practices. Identify areas where sustainability is already being considered, as well as areas that need improvement. This will help you establish a baseline and set realistic goals.
Based on the assessment, develop a clear sustainable procurement policy that outlines your organisation’s commitment to sustainability and the specific criteria that will guide your procurement decisions. Ensure that this policy is aligned with your overall sustainability goals.
Effective implementation of ISO 20400 requires buy-in from stakeholders at all levels, including top management, procurement teams, and suppliers. Communicate the benefits of sustainable procurement and the role that each stakeholder will play in achieving your sustainability goals.
Procurement professionals need the knowledge and skills to integrate sustainability into their decision-making processes. Provide training on sustainable procurement practices, including how to evaluate suppliers based on sustainability criteria, conduct life cycle assessments, and manage supplier relationships.
Establish clear, measurable objectives for your sustainable procurement efforts. This could include reducing greenhouse gas emissions in the supply chain, sourcing a certain percentage of goods from certified sustainable suppliers, or eliminating products that contribute to deforestation.
Sustainable procurement is an ongoing process, so it’s important to continuously monitor and review progress toward your objectives. Regularly assess supplier performance, track sustainability outcomes, and adjust
The Vizibl Supplier Sustainability Module empowers sustainable procurement professionals to digitise and streamline the implementation of sustainable procurement processes as per th eISO standard. It brings together key stakeholders, including category managers, procurement directors, heads of sustainability, and other important personas in the supply chain, fostering collaboration throughout the process. Suppliers are also actively involved, enabling them to contribute to and align with the sustainability goals. The module provides granular information on sustainability metrics by collecting data from suppliers as well as integrating to 3rd party data sources. This enables suppliers to be segmented for action. The supplier cohorts can have well defined targets over time as well as supporting information to help train and educate them. Tying the sustainability information to procurement metrics allows supplier managers to get a holistic view of the supplier as well as better understating opportunities for improvement and sustainable innovation, driving progress towards shared sustainability objectives.
Implementing ISO 20400 offers numerous benefits to organisations, regardless of size or industry. Some of the key advantages include:
As consumers and investors become more conscious of sustainability issues, organisations that demonstrate a commitment to sustainable procurement can improve their brand reputation and gain a competitive edge. By adopting ISO 20400, organisations send a clear message to stakeholders that they take environmental and social responsibility seriously.
While sustainable procurement may initially seem costly, it often leads to long-term financial benefits. By considering the full life cycle of products and services, organisations can identify opportunities to reduce waste, improve energy efficiency, and minimise resource consumption, all of which can lower operational costs.
Sustainable procurement helps organisations identify and mitigate risks in their supply chains. By selecting suppliers based on sustainability criteria, companies reduce the likelihood of being associated with unethical practices, environmental degradation, or human rights abuses. This also helps organisations comply with growing legal and regulatory requirements related to sustainability.
By fostering long-term relationships with sustainable suppliers, organisations can enhance the resilience of their supply chains. Sustainable suppliers are often more innovative and adaptable, allowing organisations to respond more effectively to changing market conditions, regulatory requirements, and consumer expectations.
Adopting ISO 20400 helps organisations contribute to broader global sustainability goals, including the United Nations Sustainable Development Goals (SDGs). By aligning procurement practices with the SDGs, organisations can support efforts to address climate change, poverty, inequality, and environmental degradation.
Conclusion
In conclusion, ISO 20400 offers a robust and globally recognised framework for managing ESG performance, enabling organisations to enhance their environmental sustainability, social responsibility, and governance practices. Its flexibility allows businesses across various industries to customise the framework to suit their specific needs, helping them meet regulatory requirements and satisfy stakeholder expectations. This adaptability also strengthens their reputation as responsible, resilient, and forward-thinking entities in the eyes of investors, customers, and the broader community. By integrating the ISO standard into their ESG strategies, organisations can effectively mitigate risks while unlocking opportunities for growth, innovation, and value creation in an ever-changing business environment
