ISO 20400 is here, but what is it? Construction firms already using the sustainable procurement standard in their tenders are driving cost and other benefits across their supply chain, including in waste management.
The construction industry is rightly proud of its progress in reducing the level of waste going to landfill and the introduction of more sustainable working practices. But there’s plenty more that can be done, judging by estimates that the industry is responsible for 45% of carbon emissions and a third of all waste in the UK.
That’s why ISO 20400, a new standard for sustainable procurement, is paramount to getting construction and other industries thinking more clearly — at an earlier design stage — about how they will meet their sustainability objectives, including levels of reuse and recycling.
Sustainable procurement is no longer just a box-ticking exercise that can be viewed as an add-on to the building project planning process. Many contract awards, particularly in the public sector, are now awarded as much on social factors as they are on cost and project timescales.
ISO 20400 hammers home the message that sustainable procurement also represents ‘good procurement’, particularly when the benefits can ripple through the supply chain in terms of improved behaviour and practices. For contractors, there are added bonuses in terms of reduced supplier risk and a positive impact on the reputation of your brand, as well as the general impression that your firm values innovation.
Overview of ISO 20400
Many companies mention procurement in their corporate social responsibility reports, but until recently there’s been a lack of guidance on how to implement and measure sustainability, particularly when it comes to procurement. Sustainable procurement, as defined by ISO 20400, represents ‘the most positive environmental, social and economic impacts possible over the entire life cycle’.
Released in April 2017, ISO 20400 establishes common definitions and processes. It’s a guidance standard, which means there’s no ISO certification, but it’s designed as a useful reference point for companies who want to start implementing sustainability into their procurement processes.
Construction firm Balfour Beatty has done just that, claiming a ‘world-first’ in becoming the first company to complete the process for ISO 20400. In doing so, Balfour said it uncovered areas of existing good practice in sustainable procurement as well as areas for improvement to focus upon. The success of its procurement methods has already been highlighted in some recent projects. Most notably, its contract on the Haymarket building in central London resulted in a 26% reduction in on and off-site waste generation from prefabrication, and a 10% reduction in carbon footprint.
How waste management can help
Any sustainability message has the circular economy at its heart, which means waste management should be a key part of achieving ISO 20400. Some firms prefer the term ‘circular procurement’, where their choices at the outset of a decision-making process ensure that materials are still suitable at their end-of-life for repair or refurbishment and reuse. Closing this materials loop is something that waste management companies are passionate about as they continue their pursuit of zero waste objectives.
Many firms publish annual reports detailing disposal and recovery rates on every material they handle, making it easier for construction firms to compare performances and ensure that the right waste contractors are chosen at the procurement stage.
This approach has cost advantages for building projects, particularly as the rate of the UK’s Landfill Tax has risen sharply in recent years. There’s also an opportunity for builders to meet the sustainability benchmarks BREEAM and WRAP, both of which aim to encourage the efficient use of resources.
What is sustainable procurement?
Sustainable procurement isn’t just defined through ‘green’ credentials. It involves planning ahead to manage demand, alongside effective contract management and the handling of supply chain risks. Society and the environment should be no worse off from the decisions made by an organisation, and if done properly, sustainable procurement will always make sound business sense.
This is particularly relevant for the construction industry when up to 80% of the spending by major contractors is passed through to their supply chain. That’s why a collaboration of clients, contractors and first-tier suppliers have set up the Supply Chain Sustainability School to provide practical support in the form of CPD accredited e-learning modules and training workshops. Its ultimate aim is to help the industry meet the challenging sustainability and efficiency targets set by the UK Construction Strategy 2025.
Getting the procurement process right makes it more likely that sustainability goals are achieved in a way that delivers value for money. A recent survey in the United States found that 50% of sustainable procurement leaders experienced increased revenue from sustainability initiatives. Respondents also highlighted the benefits of improved brand reputation — named by 76% — and stronger supplier relationships, cited by 55%.
Waste management in sustainable procurement
The tender document is the project manager’s opportunity to highlight the standards expected in waste management across the supply chain. This includes the efficient use of materials and the potential for reuse and recycling. There should be forecasts for waste, details of how waste will be reduced, and the plans for waste recovery, such as segregation. WRAP offers model wordings for procurement managers who are thinking about how to incorporate these requirements into their invitations to tender and Site Waste Management Plan.
It’s also important to establish how suppliers of waste services will report back on the benchmarks. Specific, clear and challenging sustainability targets are essential, but so too is making them as public as possible, so it becomes harder for sustainability to be given up on cost grounds. It’s helpful if everyone in the supply chain knows what’s required of them so as to avoid conflict later on.
Harmony between contractors and all stakeholders should extend across the site so that procurement decisions — such as the type of concrete to be used — are aligned with the best choice in terms of waste management.
Cost savings benefit
This approach highlights the benefits of thinking about waste reduction at an early design stage, rather than leaving it until later when much of the opportunity to reduce and reuse waste materials and secure cost savings will have been missed.
When the right decisions are being made at the right moment, ISO 20400 and sustainable procurement have the potential to give your business a competitive edge. Only when sustainability is done badly will it end up costing you more.