ISO 20400 Sustainable Sourcing

WHAT IS SUSTAINABLE PROCUREMENT?

Sustainable procurement is critical to the sustainable transformation of every company because it can help reduce environmental impacts, improve social conditions, mitigate supply chain risks, enhance reputation, and create economic benefits. Procurement is a material subject for many organisations. Hence, an appropriate Sustainable Procurement strategy is crucial to act responsibly and contribute to sustainable development and the achievement of the UN SDGs. Furthermore, up-to-date information about due diligence, risk assessment, measurement, and management of non-compliance need to be mandatorily reported also to government bodies over time. Adoption of sustainable procurement policies and practices will lead to:

Demonstration of commitment to sustainability and building long-term value for the organisation and its stakeholders
Managing risks (including opportunities) for sustainable environmental, social, and economic development

Sustainable procurement ascertains the implementation of an organisation's Corporate Social Responsibility (CSR) strategy into the buyer-supplier relationship. An organisation and its procurement function should be taking into consideration seven core subjects and the sustainability issues, and their interdependence when developing its sustainable procurement policy.

The seven core subjects are as follows:

Organizational governance
Human rights
Labour practices
Environment
Fair operating practices
Consumer Issues
Community Involvement and development

WHY IS SUSTAINABLE PROCUREMENT IMPORTANT?

Sustainable procurement is one of the critical topics. A best practice guideline has been issued by ISO (ISO 20400) and it is a valid tool for organisations to develop and implement a sustainable procurement strategy, set appropriate risk methodologies, identify appropriate measures and monitor performances.
ISO 20400 provides you with:

A way to integrate Sustainability within the procurement process, at the strategic level, policies & practices and processes of your organization
Manage financial, environmental and reputational Risk
Promote Innovation
Sustainability benefits, including savings over the life cycle cost
Contribution to the Local Economy
Encourage Small & Medium enterprise suppliers
Ensure the respect of Human Rights within your supply chain
Reducing resource wastage & emission

TÜV SÜD IS A GLOBAL EXPERT IN SUSTAINABILITY STANDARDS

The increased importance of Sustainable Procurement demands demonstrated performance by organizations against global frameworks like ISO 20400. This guideline is designed to be international, flexible and applicable to any organization, anywhere. Consequently, the overall recommendations need to be translated as per your organization’s specific context and activities. TÜV SÜD has wide-ranging experience in the assessment of organisations against sustainability frameworks. Based on the suggested action points for your company, you can build a Sustainable Procurement Process to fulfil stakeholders' expectations.

TÜV SÜD'S SUSTAINABLE PROCUREMENT SERVICES

TÜV SÜD provides assessment services against Sustainable Procurement Guidance. When we work with you, you can expect:

Interaction with a team of qualified Sustainability experts
We understand your organization, customers, activities and value chain
We work with you to design assessment projects according to the needs of your organization
We can support you with ongoing ISO 20400 assessment and annual re-assessment

YOUR BENEFITS AT A GLANCE

Minimise risks – arising from the supply chain
Save money and time – with a single point of assessment that identifies the organisation's status quo of sustainable procurement up to the integration process and identifies potential threats & improvement opportunities
Gain a competitive edge – by focusing sustainability & innovation on the supply chain
Benefit from independent assessment – with our independent and impartial assessment results, Organization can use the Report for gaining stakeholder confidence

For more information about ISO 20400, or to find out more about our Sustainable Procurement services:

Frequently asked questions on iso 20400 (Sustainable sourcing)

What is an ISO 20400 certification?

ISO 20400 is a sustainable procurement guidance document. So, it is not a certifiable standard. But it facilitates advice on how to integrate sustainability into your procurement activities. TÜV SÜD validates the sustainable procurement practices implemented by the organisations.

What are the four main parts of ISO 20400?

Fundamentals	Policies & Strategies	Enablers	Procurement Process
Principles Core subjects Drivers Consideration	Leadership & accountability Aligning with organisation goal Understanding your supply chain Managing implementation	Governing procurement Enabling people Engaging stakeholder Setting priorities Measuring & improving performance Establishing grievance mechanism	Planning Integrating sustainability requirement in specification Selecting suppliers Managing the contract Reviewing & learning

What are the objectives of ISO 20400?
- The guideline supports the integration of sustainability considerations into procurement practices within organisations.
- It helps organisations to identify and address the ESG risks and opportunities associated with their supply chains.
- This guidance encourages the adoption of responsible and ethical practices in procurement to improve accountability, transparency, and stakeholder engagement.
- Fosters collaboration & innovation between buyer-supplier to improve sustainability performance and drives continuous improvement in procurement practices.
What is ISO 20400: 2017 standard for sustainable procurement?

ISO 20400: 2017 is a sustainable procurement guidance document. It helps to develop skills, policies and processes of the procurement function within the organization.
What are the seven core subjects of ISO 20400?
Social responsibility is the fundamental element of ISO 20400, which draws the same principles and core subjects of ISO 26000 Guidance on Social Responsibility as follows:
1. Organizational governance
2. Human rights
3. Labour practices
4. Environment
5. Fair operating practices
6. Consumer Issues
7. Community Involvement and development

What are the three pillars of sustainable procurement?

3 Pillars	Environmental	Social	Governance
related to impacts across business lifecycle	material sourcing, production, distribution, use, and disposal of goods and services
implementiation of sustainable procurement practices has positive impacts on	resource use, energy consumption, emissions, waste generation, and biodiversity	labour rights, working conditions, human rights, community engagement, and diversity and inclusion	ethical business practices, fair trade, and responsible sourcing

The three pillars of sustainable procurement are interlinked and mutually dependent. Implementation of Sustainable procurement practices generates value for organisations, their stakeholders, and the environment.

Sustainable sourcing in a nutshell

The ISO 20400 guidance developed by ISO is a useful framework for sustainable sourcing. It helps organisations to adopt a holistic approach to buying culture that considers the entire life cycle of a product or service. This includes the extraction of raw materials, purchase of consumables, sub-contracting/ outsourcing, production of the end product, distribution, end product use, and disposal/ recycling. Integration of the full life cycle of a product or service enables the identification of opportunities to reduce environmental impacts and improve social conditions.

ISO 20400 addresses a variety of topics associated with sustainable sourcing as follows:

Procurement policy and strategy development: The guidance helps organisations to define procurement policies and develop strategies that align with key business objectives.

Risk Mitigation in supply Chain: ISO 20400 assists in the identification and mitigation of social & environmental risks within the supplier network.

Supplier selection and evaluation: This sustainable procurement guidance advises organisations on how to select and evaluate suppliers' sustainability performance.

Contract management: ISO 20400 assists organisations to incorporate sustainability in the contractual requirements with the suppliers.

Monitoring and reporting: This sustainable procurement guidance suggests to organisations how to monitor and report sustainable procurement's performance.

SUSTAINABLE SOURCING: ISO 20400

WHAT IS SUSTAINABLE PROCUREMENT?

WHY IS SUSTAINABLE PROCUREMENT IMPORTANT?

TÜV SÜD IS A GLOBAL EXPERT IN SUSTAINABILITY STANDARDS

TÜV SÜD'S SUSTAINABLE PROCUREMENT SERVICES

YOUR BENEFITS AT A GLANCE

Frequently asked questions on iso 20400 (Sustainable sourcing)

Sustainable sourcing in a nutshell

EXPLORE

ISO 20400 Sustainable Procurement Guidance

Sustainable Procurement Validation

Sustainability Reporting Verification

ISO 26000 Social Responsibility Implementation Assessment

Social Responsibility Status Assessment

Assess the Implementation of the ISO 30415 Diversity & Inclusion Guideline

Next Steps