Sustainable procurement: The 14 indicators that everyone can agree on

Sustainable procurement
September 19th, 2019
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The strategic importance of a sustainable procurement policy has been illustrated many times. The issue of sustainable procurement involves the entire company, whose reputation and ability to stay in the game are clearly at stake.

However, sustainable procurement implies the ability to evaluate the actual policy being used in this area. For a long time, the issue with the availability of universal and practical indicators, has hampered the application of a fully credible sustainable procurement policy.

A recent article on French website Dé looks at the slow progress towards an operational measurement for sustainable procurement. It tells us that, a year ago, only 27% of companies reported having a performance measurement system in place for sustainable procurement [1]. The ability to rely on a series of indicators defined by the Observatoire des Achats Responsables (ObsAR — Observatory of Sustainable Procurement) changes the situation.

The article illustrates the thought process of buyers involved in sustainable procurement, by proposing simple answers to two fundamental questions:

Why measure the impact of a sustainable procurement policy?

Measuring specific indicators, against pre-defined objectives is the only way to carry out an in-depth assessment of the actual effect of a corporate policy. Nathalie Paillon, Director of Operations and Studies at ObsAR, articulates this principle clearly: "That which is not measured does not exist!"

Measuring the impact of a sustainable procurement policy has three benefits:

  • It drives targeted improvements based on a documented history.
  • It stimulates stakeholders at all levels of the value chain (suppliers, procurement team, internal customers etc.).
  • It highlights and quantifies the sustainable procurement policy, not only within the organisation but also to benefit the company's reputation.

On the contrary, irrelevant, unshared or entirely absent indicators limit the scope of the sustainable procurement policy. Even from a more sympathetic perspective, if no objective measurements are taken using a suitable scale, commitment to the policy runs the risk of seeing its impact disputed and its image confused. In such a context, it is difficult to solicit efforts, from internal and external contributors alike, that go beyond common sense gestures. 

On a basic level, the ISO 20400 standard, which has been dedicated to sustainable procurement since 2017, requires companies to define measurements and indicators, and perform comparative assessments.   

How do we measure the impact of a sustainable procurement policy?

ObsAR is a think tank of buyers brought together from private and public spheres. Within AFNOR [2], ObsAR led the development of the French "sustainable procurement" standard, followed by its international expansion under the ISO 20400 standard.

To transform the broad guidelines of the ISO 20400 standard into objectively measurable practices, ObsAR set out to define an operational methodology that assesses the long-term performance of a sustainable procurement policy. Procurement departments now have a concrete solution for the standard's requirement to define measurements and indicators.

The work group published a guide that included fact sheets detailing each indicator.

The 14 indicators of sustainable procurement defined by ObsAR combine both effort and results indicators:

  • Supplier management
    • Average payment deadlines
    • Number of pending litigations
    • Percentage of suppliers that have been CSR audited
    • Percentage of suppliers with whom CSR action plans have been put in place
    • Percentage of economically dependent suppliers with an accompanying plan
  • Procurement management
    • Percentage of consultations incorporating CSR specifications
    • Percentage of consultations incorporating an overall cost criterion
    • Percentage of purchases made from SMEs
    • Percentage of purchases made from the adapted and protected and/or integration sector(s)
    • Percentage of purchases for which an environmental, social and/or societal criterion is required
    • Percentage of purchases made with suppliers located in a specific territory
  • Team management
    • Percentage of buyers measured objectively on their approach to sustainable procurement
    • Percentage of buyers trained in or aware of sustainable procurement
  • Percentage of purchases made outside the procurement process

In conclusion, the guide published by ObsAR encourages companies to commit to measuring sustainable procurement in a controlled manner. Their recommendation, is to select the most applicable indicators from the list, based on the context and practices of the organisation. Four or five indicators may be enough for the first year. Incidentally, these measurements require technology to collect and analyse the results, which takes up even more resources given that companies are spread thin and the purchase volume is high.

Before you commit to a sustainable procurement strategy, take a look at the French "Mesurer les achats responsables".


[1] ISO 20400 Barometer

[2] Association Française de Normalisation (French standardisation association)