Sustainable Procurement Standard - What Really Drives An Organisation To Get Assessed

By Nancy Clinton posted 12-13-2017 05:12

  

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Last month we wrote about the world’s first international guidance standard for sustainable procurement best practice, ISO 20400, which aims to help organisations develop and implement sustainable purchasing practices and policies. Any organisation, in any sector, wishing to embed sustainability into its procurement processes can adopt this to increase transparency in the supply chain. Organisations can carry out a self-assessment, or bring in independent experts, to measure how well they comply with the standard, then take steps to improve and comply more fully. So why bother?

Procurement plays a large role in any organisation, regardless of size. And the impact of its purchasing decisions can have far-reaching effects, not only on the performance and reputation of the company itself, but on everyone it touches in the supply chain. As the ISO website says: “Sustainable procurement entails making purchasing decisions that meet an organization’s needs in a way that benefits them, society and the environment. It involves ensuring that a company’s suppliers behave ethically, that the products and services purchased are sustainable and that such purchasing decisions help to address social, economic and environmental issues.”

London Universities Purchasing Consortium (LUPC) was the first public sector organisation in the UK to complete an assessment against the standard, and the first worldwide in the education sector to do so. We caught up with its Director, Andy Davies, to find out what really drives an organisation to be assessed, and what it means to them.

A bit of background

In 2006 the Sustainable Procurement Task Force was set up by Defra. They came up with the Sustainable Procurement Flexible Framework by which public authorities could measure their effectiveness in terms of sustainable procurement. There were five levels, and those operating at level 5 were considered to be performing extremely well. However, the world has moved on in 11 years, and while Defra no longer maintains the Flexible Framework, it is still the sustainability benchmark in the education sector.

LUPC were striving to reach the top level, but felt that the Framework, while supporting the environmental side well, was lacking in some other areas, like social responsibility. This being an area of utmost importance to LUPC’s 75 members, they wanted to find something that went broader and deeper. So when they heard about the new international guidance standard, they realised it was just what they needed.

Why is responsible procurement so high on the LUPC agenda?

“In a nutshell,” said Andy, “it’s because it reflects the values of our organisation and of our members. Our members’ values are very clear and prominent, and we want to reflect those in our purchasing agreements, for our members, for ourselves, and for the supply chain. Those values cover not just environmental concerns, but social and ethical performance.”

Since 2014, LUPC has been affiliated to Electronics Watch, which monitors the electronics global supply chain. Two years ago, LUPC became the first collaborative procurement organisation in UK public service to publish a statement of the steps it had taken against human rights abuses and modern slavery in its supply chain, even though it was not legally obliged to under the UK Modern Slavery Act. “This kind of transparency is essential for anyone,” said Andy, “but especially if you work in the public sector as we do – you have a moral obligation to be transparent.” LUPC is about to publish its third annual anti-slavery statement.

How do you get assessed and what does it involve?

“To be assessed against the new guidance standard we engaged a third-party assessor. We called in Action Sustainability as they had been involved in writing the new guidance standard -- we knew we’d have a lot of work to do, so we braced ourselves! Action Sustainability is headed up by Shaun McCarthy, who had been involved in drafting the original Flexible Framework 11 years ago, so we were keen to have his personal encouragement.”

As it turned out, LUPC did rather well, scoring 3.7 out of 5 in their first assessment. They were provided with a report detailing everything they do well, and recommending things they could do to improve, like updating the ‘Guide to Sourcing and Managing Contracts’ to bring it into line with the new ‘Responsible Procurement Policy’ and producing an index of policies and procedures, setting out the purpose of each and their interrelationships and dependencies. They also received guidance on how to go about doing that.

What value does the assessment bring to your organisation?

“The assessors measured us against quite a long list of benchmarks: policy, leadership, governance, tools, techniques, practices, to what extent they are embedded and measured, and how effective they are. You can see from that where you are and where you could be. It’s not an accreditation, it’s a guidance standard. There’s no pass mark. But it gives our members the confidence they’re looking for from us. They can trust that the processes we use to award contracts and represent them in business is as socially responsible as possible. They can see we are manging the risks and doing our best to implement responsible procurement on their behalf to see that their goods and services are sourced ethically.”

“Of course, no one can claim that every single product is sourced 100% ethically, but the point is, we can assure our members that we are taking the right steps towards that, through good practice and by identifying, preventing and mitigating the risks. And we can show we are working with our supply chain, our manufacturers, to manage that risk.”

This is something reiterated by the Chair of ISO/PC 277, the project committee that developed the standard. “The risks of not understanding and managing practices throughout the whole supply chain are great. At best, poor quality products or ruptures of stock can result. At worst, disasters like the Rana Plaza in Bangladesh in 2013 can happen. Sustainable procurement helps to minimize risks such as these by encouraging buyers and suppliers to work closely together for a better result for all.”

How has this value been borne out for you?

“We have already witnessed what we believe to be a major success story through this level of collaboration, and particularly through the cooperation of our suppliers. We had a report come through to us from a media channel that said it had reason to believe a factory manufacturing servers in China was using student labour to undertake final assembly. And that they were producing our kit.

A significant number of students had been told by their vocational school, that they would have to do an ‘internship’ at the factory in order to graduate. (Local authorities in China are known to support and encourage local industry in this way, it’s seen as ‘patriotic duty.’) These young people were reported to be working long hours, without access to the social benefits they would be afforded under Chinese labour legislation. Making students work under menaces like this is forced labour, contrary to ILO Conventions.

We wrote to the suppliers on our framework agreement asking them to confirm whether any of our goods were being assembled at this factory.  To their credit, they acted very quickly.  And we value the cooperation they provided on this.

Electronics Watch provided us with the information we needed, including a comprehensive list of ILO Conventions and local labour laws that may have been breached. This we included in a letter to our manufacturers, asking them to verify the situation and take appropriate action. The manufacturers sent in their auditors and put a stop to the practice. Once we were informed of the cessation of the practice, we sent in our own auditors, through Electronics Watch, to verify that, and we are pleased to report that there was no evidence of such labour.”

What would you say to other organisations interested in this assessment?

“Last year 89,000 Chinese students studied with us in the UK. We will not tolerate any kind of forced labour, especially that of our own potential students.  As well as having good strategies and policies in place, the value for us is this kind of outcome. It proves that collaborative monitoring of supply chains works and that we can make a difference.

The key to all of this is collaboration, and we collaborate on behalf of our members. While ours is quite a small purchasing consortium, collaboration through organisations like Electronics Watch gives us the strength and power we need by working together. All PBOs need to up their game in responsible procurement, it is no longer an option. It is something that should become second nature to procurement professionals. Working with our suppliers to help them improve their practices should come as naturally to them as any other aspect of the job.”

We thank Andy Davies of LUPC for his candid response to our questions. And we hope this will encourage more organisations to take on the sustainable procurement mantle.

For a final word, let’s go back to ISO: “Picture a world where every product and appliance is environmentally friendly, where every supermarket item is fair trade, where corruption is an urban myth and poverty a long-distant memory. Hard to imagine? Technically, it is possible … if everyone adhered to sustainable procurement.”


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