Assessing Procurement Choices

Information from ISO 20121:

Four key aims should be addressed when integrating sustainable development management into the procurement process:

1) minimizing the impacts of products and/or services
(e.g. impacts on health, air quality, generation of hazardous waste);
2) minimizing demand for resources
(e.g. by using resource-efficient products such as energy efficient appliances, fuel-efficient vehicles and products incorporating recycled content);
3) minimizing the negative impacts of the supply chain itself, in particular the social aspects
(e.g. giving preference to local and/or smaller suppliers and those that meet minimum ethical, human rights and employment standards); and
4) ensuring that fair contract terms are applied and respected.

Techniques for assessing and managing sustainable development issues in procurement

The following considerations should be taken into account in defining the approach to assessing/managing suppliers and prospective suppliers:

a)    the extent to which the supplier’s products/services are critical to the purchasing organization;
b)   the level of expenditure relative to the size of the supplier, in order to establish the degree of influence that can be exerted;
c)    the significant social, economic, environmental and natural resources issues and associated risks relating to the product/service; and
d)   separating suppliers by industry, service or product type in order to develop appropriate means of communicating/engaging with them.

The organization should select from appropriate approaches, tools and techniques to assess and manage sustainable procurement. These include:

1)    weighting/scoring systems – quantitative/qualitative ways of assessing the merits of proposed solutions applied to the KPIs;
2)    life cycle assessment and whole life costing – the “true” impacts of products and/or services based on a “cradle-to-grave” approach i.e. a holistic approach which assesses the environmental aspects and potential impacts associated with the manufacture, use and disposal of a product;
3)    the environmental purchasing hierarchy – “rethink, eliminate, reduce, re-use, recycle, dispose”, an approach to minimizing natural resource impacts which is similar to the waste management hierarchy;
4)    supplier code of conduct – can be employed by the contracting organization in order to ensure that their suppliers conform with the environmental, social and ethical elements of sustainable procurement, as well the environmental aspects;
5)    industry best practice – standards for sustainable development management for specific industry sectors/areas defined by the industry and representing the industry’s assessment of appropriate performance levels; and
6)    best value – using the UK government definition, the optimum combination of whole life costs and benefits to meet the customer’s requirement; this approach enables sustainable development and quality to be taken into account when service delivery options are being considered.

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