ISO/PC 277 Sustainable Purchasing Norm: Off We Go!

October 1, 2013 EcoVadis

The first meeting on the future ISO norm on Sustainable Purchasing was held in Paris on September 23rd and 24th. I had the chance to talk to the participants and got feedback that this work session was a great promising start. For those who are not familiar with PC 277 Sustainable Purchasing, the objective of this standard is to support corporations integrate environmental and social issues within the purchasing process. The standards organizations of France (AFNOR Normalisations) and Brazil have recently established a technical committee – chaired by Jacques Schramm (CEO A2 Consulting) – to develop this new ISO international standard. Twenty-two other countries have signed up to participate (see list).

Large multi-nationals companies such as Alcatel-Lucent, Coca Cola Enterprises and Bayer, for instance, have all in the past 5-7 years started to implement responsible purchasing or sustainable procurement programs. The future ISO norm will increase the value of these essential emerging management practices. It will also help differentiate between the programs that are genuine efforts to tackle environmental, human rights or corruption issues within the supply chain, and the programs that are just scratching the surface and can be considered as mere window dressing. Furthermore, it will also encourage other organizations to launch similar programs, benefiting right away from the experience of early adopters and subject matter experts.

There are some discussions within the technical committee as to whether to call it “sustainable purchasing” or “responsible purchasing” or “sustainable procurement”. I would definitively vote for “responsible purchasing”. First of all, the word Sustainable is too vague, too misused. Who does not want its purchasing practices to be sustainable anyway? But more importantly the word responsible implies you have a responsibility towards someone, and that’s what the norm is all about: have buyers be responsible towards suppliers, and have suppliers be responsible towards buyers.

This new ISO standard will also bring value beyond the procurement and the purchasing community by helping to disseminate CSR practices throughout supply chains, and ultimately the entire economy. We know that the Fortune 500s are pressurized by NGOs, investors and regulators to implement sustainable practices. But they are just the tip of the iceberg. The vast majority of other companies are small and medium organizations. How can CSR reach all these companies? The best lever is through supply chains and through buyer-suppliers relationships. EcoVadis assesses hundreds of companies on a monthly basis, including in risk countries. We see them moving on CSR because their clients, the buyers in Europe or in the US, ask them to implement responsible practices. In other words, the voice of the client is much more powerful to disseminate responsible practices than any other means.

I also believe the primary objective of the norm should also be to encourage buyers to assess the environmental and social practices of their suppliers, before being held responsible towards them. For instance, one possible requirement for buyer would be to give suppliers shorter payment so that suppliers can optimize their cash flow. But what value will it generate giving shorter payment terms to suppliers who are polluting the environment or practicing child labor in the first place? Therefore the norm should help clarify and set priorities for procurement and purchasing teams.

ISO norms take two and half years to be launched on average, sometimes much longer, like the overarching principles on responsible management practices of the ISO 26000, that took almost ten years. The ISO/PC 277 will benefit from the French norm NF X50-135-1 and also from the British one BS8903:2010. Let’s hope in this context that we will not have to wait so long before ISO/PC 277 becomes a reality! See you at the next meeting in Brazil.

This article was written by Sylvain Guyoton, Vice-President of Services at EcoVadis. You can follow him on Twitter at @sguyoton

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