There are strong business benefits to be gained by understanding and managing the sustainability issues that are significant in an organisation or industry’s supply chain.
Traditional procurement practices focus on price, product quality and on-time delivery – criteria that impact directly on the bottom line. However, through its various supply chain practices, an organisation can positively or negatively affect the local economy, the environment and people – via its labour practices, level of product responsibility and policies regarding human rights and society in general.
Some of the advantages of embedding sustainability considerations into procurement processes include:
- Reducing risks (reputation, legal, environment, safety, continuity of supply, traceability and quality)
- Achieving operational efficiencies and cost savings
- Building mutually beneficial supply chain relationships
- Demonstrating corporate social responsibility
- Achieving and retaining certification to ISO14001:2015; ISO45001:2018 and ISO9001:2015
Clause 8.1 (c) of ISO14001:2015, requires organisations to determine environmental requirement(s) for the procurement of products and services and communicate these to external providers, including contractors.
Clause 188.8.131.52 of ISO45001:2018 requires organisations to co-ordinate procurement process(es) with contractors, in order to identify hazards and to assess and control OH&S risks.
The Sustainable Procurement – Guidance ISO20400:2017 provides much needed guidance on how to integrate sustainability into the procurement processes.
But the integration of sustainability principles into procurement processes can be complex and challenging in practice. I gained some insight into this by working with a large organisation in 2017 to review their Sustainable Procurement Policy. There were clear barriers to implementation and resistance to change.
To avoid these pitfalls, I’ve summarised the 5 main ways you can start to embed sustainability into procurement practices to make the success of your efforts more likely.
1 Securing commitment from all levels of the organisation
- Preparing a business case
- Conducting senior management workshops
- Articulating a vision and long term goals
- Defining roles and responsibilities
- Building internal support for the program
2 Getting agreement about the sustainability impacts that are relevant and important
- Creating a process for determining the “materiality” or significance of each aspect
- Identifying key suppliers and other external internal interested parties
- Conducting stakeholder engagement
- Mapping issues important to stakeholders against business considerations
3 Identifying any significant issues that lie further up or down-stream
- Considering the full life-cycle of a product system
- Identifying and adjusting the organisation’s procurement practices
- Phasing out unsustainable products
- Working with suppliers to resolve issues
4 Effectively communicating expectations and requirements
- Creating a Code of Conduct
- Communicating the company’s expectations to suppliers
- Supplier’s self-assessment
- Monitoring the supplier’s performance
- Conducting supplier and contractor evaluations
5 Supporting people in procurement roles
- Developing policies to guide people in making better decisions.
- Creating assessment checklists for new or changed processes, materials and products
- Screening of suppliers and factories
- Searching for the most sustainable products
As previous National Buyer for Woolworths I’ve watched with interest the gradual evolvement of procurement practices so they become better fit for purpose in today’s complex world.
Feel free to call me, Suzy, on 0418862899 to discuss your particular needs.
This article was updated to reflect the Sustainable Procurement Guidance – ISO20400:2017 and the international OH&S standard ISO45001:2018