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Professoriate Procurement Management @Hanze University Groningen; May 2018 1/5
Measuring & Improving Sustainable Procurement
Research Project @Hanze University
Anne Staal; Gert Walhof; Jan Roelof Dries
a.a.g.staal@pl.hanze.nl; G.H.Walhof@pl.hanze.nl; j.r.dries@pl.hanze.nl
The ISO 20400: 2017 guidance standard on sustainable procurement is an excellent tool for private
and public organisations. Already 52 industry countries have adopted this new global norm,
representing 65% of the world population, 85% of the world GDP, and 73% of the CO2 emissions.
(Source: ISO20400.org).
Over the last decades we have seen several definitions on sustainable procurement and a wide array
on terms related to sustainable procurement. (To mention a few: green purchasing, circular
procurement, social return, ethical purchasing, green procurement, responsible sourcing). Each of
these terms will produce thousands of academic and practitioners’ documents on Google. Contrary,
the term “ISO 20400” still only produces 68 academic papers from 2014 onwards. So why bother?
A Better Mousetrap – a New Sustainable Procurement Definition
So far, at Hanze University we used a long and academically-sound definition from the Johnsen e.a.
text book (2014) based on Brundtland (1987) and Van Weele (2010). However, for its brevity and
positive perspective I very much like the ISO 20400 definition:
Procurement that has the most positive environmental, social & economic impacts
possible over the entire life cycle.
This definition does not explain procurement itself. Luckily the ISO 20400 text (page 3) also provides a
succinct definition which considers the entire cycle from need identification through to the end of a
service contract or the end of life of goods:
Procurement is the activity of acquiring goods or services from suppliers.
Again, CIPS, Van Weele, the NEVI, and others (cf. Callender e.a., 2009, p. 681) have offered a wide
raft of procurement or purchasing definitions. In 2006 or earlier, CIPS already included “disposal and
the end of the life” in its procurement definition (Kidd, 2006, p. 4). Miemczyk e.a. (2012) mentioned
the aspect that sustainable purchasing provides value to the [buying] organisation “and also to
society and the economy”. Note that some organisations or countries explicitly add a (fourth) cultural
dimension. For example, in New Zealand, sustainable public procurement includes the well-being
related to the Maori culture. (cf. the draft Auckland Council Sustainable Procurement Framework,
2017, p. 5). Earlier definitions also referred to a least negative impact and hence we could still
damage planet & people, although somewhat less severe.
Assuming, that in procurement practices the “most positive impact” will no longer equal the “least
negative impact” this new ISO 20400 definition on sustainable procurement promises to help the
profession move forwards.
Professoriate Procurement Management @Hanze University Groningen; May 2018 2/5
The ISO 20400 Research Project @Hanze University
The Professoriate in Procurement Management at Hanze University of Applied Sciences started a
unique project on the ISO 20400. This involves 22 student researchers, 10 regional public and private
organisations, the Dutch association of purchasing managers (NEVI) and the Dutch Normalisation
Institute (NEN). Main objectives of this 8-week project are to:
1. validate the newly developed NEVI-NEN maturity webtool ISO 20400 on Sustainable
Procurement;
2. help the 10 participating organisations with a zero measurement and a benchmark on the ISO
20400 sustainable procurement guidance;
3. define 5 opportunity statements for each participant;
4. draft 1 or 2 improvement plans or capture low-hanging fruit for each participant.
Students will conduct several structured company interviews. They also organise a world research
café (Fouché & Light, 2010; Schiele e.a. 2011) to develop and share knowledge and best-practices.
On 21st of June, they will present their research findings with a poster presentation; the best team
will win a purchasing award.
It is expected that this project
will be the first step in a
multi-year programme (cf.
Weber e.a., 2008, p. 245) to
help regional organisations
improve on their sustainable
procurement processes.
The Professoriate currently
explores funding to organise a
learning structure for approx.
25 organisations with 50
students and researchers. Increasingly, organisations depend on their supply chains for goods and
services and procurement is the linking pin. On average 50–80% of sustainable impact may come
from suppliers. Hence this programme will have a positive effect on sustainable development of
participating organisations, their (regional or global) supply chains, and other stakeholders.
This sustainable procurement programme will have similarities with earlier procurement excellence
programmes as based on the Michigan State University model (Trent, Monczka 1991, 1999, 2003). In
the Netherlands at least this programme has stimulated procurement maturity and also performance
(cf. PEP programmes, NEVI 2004; 2009; 2014; cf. essays on purchasing development, Van Poucke,
2016). The difference with previous programmes is that the drivers or motivations for once do not
primarily come from procurement or finance departments.
Contrary, the key considerations for sustainable procurement are:
1. managing opportunities & risks,
2. addressing negative effects through due diligence
3. setting priorities for sustainability issues
4. exercising influence, and
5. avoiding complicity.
Professoriate Procurement Management @Hanze University Groningen; May 2018 3/5
The organisations in the project will benefit in several ways (ISO 20400, p. 16). They will get a
practical framework in which the organisation’s key functions work together; they will improve on
risk management; they can get ahead of future requirements from clients and regulators; they can
obtain a competitive advantage and demonstrate real supply chain engagement. Moreover, applying
the guidance helps in annual reporting for both private and public organisations.
An annual survey by CIPS,
EcoVadis and the French HEC
Grande École (2017, p. 7) among
120 large multinational
corporations shows that costs
savings is only on the fourth
position as a driver. (See right
Figure).
In a related report, EcoVadis
(2017) found that smaller
organisations (< 1000 staff) generally do better on corporate social response supply chains than
larger (≥ 1000 staff) organisations. Also, that European companies do somewhat better than
companies from the AMEA region or the Americas.
It becomes clear, that the ISO 20400 guidance necessitates a change in buyer-seller relationships.
(See also the free ISO brochure, p. 3). This is confirmed by recent research. For example Rentizelas,
De Sousa Jabbour e.a. (2018, p. 28) found that coercive pressure can “quickly force an industrial
sector” to attain a level of sustainable procurement. However it is not sufficient to develop
sustainable practices in suppliers if these organisations themselves do not show initiative. Coercion
will lead to compliant rather than innovative practice. Moreover, such coercive pressure alone does
not lead to continuous improvement due to ceiling effects, i.e. suppliers will only meet the minimum
requirements. (Rentizelas e.a.
ibid, 2018).
The nature of supplier audits also
may have to change from ticking
boxes into joint development and
cooperation on improvements or
innovations.
This will pose new contractual
and relational challenges. A
framework by Legenvre (2017)
could help as it distinguished 6
types of procurement organisation, depending on the complexity or speed of change at the buyer
versus the seller slide. In each type sustainable (or likewise innovation) procurement should be
organised differently. From a Brazilian survey (N = 54) Delmonico e.a. (2018) suggest that cultural
changes are necessary to advance sustainable public procurement. This confirms earlier research by
Brammer & Walker (2009, 2012) who additionally found that acquisition costs and budget
constraints are critical barriers.
Professoriate Procurement Management @Hanze University Groningen; May 2018 4/5
The Process of the ISO 20400 Project
To start with sustainable procurement requires 5 simple steps. (1) Start with selecting sustainability
objectives. (2) Select sustainable procurement objectives & priorities. (3) Ensure governance and
alignment in procurement policy. (4) Apply sustainability in your procurement processes; AND (5)
Measure outcomes. (Based on NEVI).
Following leadership & governance principles (as also
applied in ISO asset, quality, and safety management
standards), students will start their inquiry with
investigating the alignment of general policies & strategies
with sustainable procurement strategies & policies.
(Discussed in Clause 5 of the Guidance). The guidance
(Appendix A; p. 41) offers improvement suggestions based
on ISO 26000:2010 on social responsibility. Students will
mainly interview general (top) management.
Students will then investigate enabling management
aspects of sustainable procurement (Clause 6). This is
similar to the enabling MSU cycle but additionally helps
the organisation to prioritise on their sustainable
procurement and conduct stakeholder analyses. Students
will interview procurement management and possibly
budget management.
Finally, students will investigate several sustainability
aspects in actual procurement processes. (This Clause 7
seems the largest in this guidance). Students will probably
prioritize on what commodities they investigate. The ISO
20400 is an international effort with contributions from
many countries. Students will interview budget
management, procurement professionals and
requisitioners. The 3 clauses are shown right, based on
material from www.actionsustainability.com)
NEVI five step procurement cycle has been integrated in the guidance. (Page 27). In fact, the relation
between the 3 Clauses is well-explained in this brief YOUTUBE video, with Dutch Wheel I, and 2.
After all scan results have been downloaded in the NEVI-NEN webtool, students and participating
organisations will discuss opportunity statements, prioritisation, and form a heat map. (See Appendix
C in ISO 20400 for an example). This is really the fun part where students apply and test their fresh
procurement knowledge.
Some final Considerations on the Sustainable Procurement Standard
1. In the past there has been criticism on organisational green washing in sustainable procurement.
Companies commonly favoured an incremental approach (cf. Collins e.a., 2010, p. 492),
harvested low-hanging fruit, or acted wrongfully only to improve on their brand image (cf. the
Berkeley study of Delmas & Burbano, 2011, p. 70). This could change. Large multinational
corporations are now said to be front-runners on sustainability (“light-years ahead”), and the
Professoriate Procurement Management @Hanze University Groningen; May 2018 5/5
material in the guidance may not be new to them. (Erickson, Neibergall as quoted on
Spendmatters.com, 2017). Nevertheless, the standard helps us in speaking the same language
and should be beneficial to many other organisations, especially in commoditized markets with
competitive supplier pools. (Spendmatters.com, ibid).
2. In their recent study, Blome e.a. (2017, p 18 - 21) concluded that ethical leadership from top
management has a positive impact on green supplier championing. Contrary, a high focus on
obedience to authority together with ethical incentives can stimulate greenwashing by suppliers.
3. Conducting ISO 20400 scans and drafting opportunity statements may seem straightforward.
However, the Blome study and other studies show that implementing sustainable supply chains
and conducting sustainable procurement in industry practice may be some tough work.
4. Sustainable procurement knowledge has increased, for instance on particular commodities or
countries (for examples see PIANOO.nl, European Commission.eu) or on ecolabels (also check
ISO14024:2018). Still, there are many things we do not yet know, or cannot correctly apply in
specific circumstances.
5. Research or industry findings are often inconclusive. How do we compare the impact of local
sourcing versus global sourcing which would greatly help a local community elsewhere? How do
we correctly apply life cycle costing in a complex supply chain? How should we use strict-step
approaches in maturity assessments on sustainable procurement? When do we need to be strict
on suppliers, and when do we need to be more cooperative? How sustainable are we in times of
crisis, or when top management wants more? What is the impact from public procurement on
stimulating radical or incremental sustainable supplier innovations? On what aspects do we need
more strict regulations? Do we need radical change and innovations in supply chains? Do we … et
cetera.
6. These are big questions. The project is based on applied research. We need good interaction
from students, researchers, and participating organisations, to solve some manageable questions
in the context of the research participants.
7. There is yet another critical note. According to Tregidga e.a. (2015, p. 1, 3) we are biased as we
only have a business perspective on sustainability. Our interpretation on sustainable
procurement would be based on embedded assumptions where economic development,
progress and profitability are still dominant. We are not aware that the concept of sustainable
procurement is affected by “politics, vested interests, power, lobbying, regulatory capture […]”.
We should be aware “about the inherent contradictions between economic growth, sustainable
development, and ecological limits”.
It is to be hoped that applying the ISO 20400 guidance will not be “business-as-usual” or “business-a-
little-less-than-usual” (Tregidga e.a., ibid, p. 4). We hope that the project participants will make
headway by jointly-developing and applying knowledge and insights on more advanced levels of
sustainable procurement.
At Hanze we begin a project on sustainable procurement with pitfalls and moments of glory. Thanks
already colleagues for putting your enthusiasm in this project. Also thanks to Erik van Assen and
Karin van IJsselmuide from the NEVI, Hans Kröder from Learn2Improve, and Rob Bonting from the
Municipality of Groningen for supporting this project. A good thumbs-up to the student-researchers
and participating organisations.
We will report on the project by the end of August 2018.
Contact us for more information.
Check this link for the 15 minutes ISO 20400 Quick Scan of NEVI-Purspective.