ISO 20400: Background and definition of the international standard for sustainable procurement

ISO 20400
Updated on October 15th, 2024
Share :
{{totalComments}} comments

Today, companies are aware that their procurement decisions affect much more than just their business. Purchasing criteria, supplier selection, product origin... All of these have impacts on the economy, the environment, and society. It's in this context that the concept of sustainable procurement has greatly developed in recent years. The international standard ISO 20400 for sustainable procurement provides organisations with guidelines to initiate this approach.

The origins of ISO 20400

Every organisation has an environmental, social, and economic impact. Procurement represents a powerful lever to influence these areas, whether it's performance, stakeholder relations, employee well-being, reputation... As you've understood, any company can thus contribute to sustainable development, in the broad sense as defined in the United Nations Sustainable Development Goals, by developing a sustainable procurement approach.

According to ISO 20400, sustainable procurement refers to any purchase whose environmental, social, and economic impacts are as positive as possible throughout the entire life cycle.

Until now, there were no common standards in this area. Each organisation had its own way of building its sustainable procurement policy, with its own objectives, etc. The International Organisation for Standardisation (ISO) published ISO 20400 in 2017 to support organisations in this approach. Today, this international standard for sustainable procurement, also known as the "Sustainable Procurement Standard," has become a reference.

It's worth noting that ISO 26000 on social responsibility, which was published in 2010, served as the basis for its counterpart focused on sustainable procurement. Both are founded on the same principles and core subjects in terms of governance, human rights, labour practices and working conditions, environmental responsibility, fair operating practices, consumer issues, and community involvement and development.

ISO 20400: definition and objectives

The ISO 20400 standard for sustainable procurement aims to provide organisations, both private and public, of any size, location, and sector of activity, with guidelines for integrating social responsibility into their procurement processes.

This standard is subject to voluntary commitment from organisations. It's a recommendation standard, not intended for certification purposes.

It's aimed at procurement managers and directors who want to improve their sustainable procurement approach, by leveraging expertise and best practices from around the world. It allows organisations to harmonise sustainable procurement processes by establishing general principles, sufficiently clear and versatile, that adapt to all areas of activity.

Through this standard, the idea is no longer to select a product or service based on its price, but by taking into account its total life cycle cost. Companies are then able to make informed choices, opting for products that constitute a better alternative in terms of profitability and impact on the environment in the long term, even if the upfront price is higher.

What is the total life cycle cost?
The total life cycle cost refers to all costs associated with a product or service, from its design to its end of life. This encompasses both direct costs and environmental externalities, i.e., indirect financial impacts on the environment and society. This allows for assessing its real cost in its whole.

What's included in ISO 20400?

From the introduction, the official text explains the purpose, main challenges, and methodological framework of this approach. In this regard, it's important to remember that "sustainable procurement represents an opportunity to add value to the organisation by improving its productivity, assessing its value and performance, facilitating communication between buyers, suppliers and all stakeholders, while encouraging innovation."

Subsequently, the document is structured into seven main sections:

  1. Scope;
  2. Normative references;
  3. Terms and definitions (circular economy, due diligence, ethical behaviour, life cycle approach, etc.);
  4. Understanding the fundamentals of sustainable procurement: concept, principles, core subjects, determining factors, and key points of focus
  5. Integrating sustainability into the organisation's procurement policy and strategy: how to align procurement with the company's objectives, understand practices and supply chains, manage implementation, etc.;
  6. Organising the procurement function towards sustainability: procurement governance, engaging and enabling stakeholders, setting priorities, measuring and improving performance, etc.;
  7. Integrating sustainability into the procurement process: planning, integrating sustainability requirements into specifications, selecting suppliers, managing contracts, etc.

How to initiate ISO 20400?

Before implementing ISO 20400, each organisation can prepare the ground in four main steps.

Determining your procurement philosophy

First, it's about having a clear vision of your overall procurement strategy. You need to take stock of your needs, supplier risks, requirements for suppliers... This is the starting point that will allow you to integrate a CSR dimension.

Knowing your supply chain

The supply chain plays a decisive role in deploying your sustainable procurement policy. Again, it's important to have an in-depth knowledge of your entire supply chain, including the expenditure and CSR impacts of different suppliers.

Thinking strategically

From such an assessment, it's appropriate to prioritise your actions. By studying the risks and opportunities at their disposal, companies can begin to work collaboratively with their strategic suppliers on substantive issues.

Ensuring support from your management

To successfully carry out this approach, it's essential to have the support of senior management within the company. Each member must be aware of the associated benefits, opportunities, and consequences.

By integrating CSR principles into their procurement processes, companies can not only improve their environmental and social performance but also strengthen their long-term competitiveness and resilience. In this sense, ISO 20400 offers a clear roadmap for navigating the complex landscape of sustainable procurement.

Livre blanc
white paper
Discover how to include CSR at the core of your procurement policy with our white paper