ISO 20400:2017 (Sustainable Procurement) Awareness Training

2. © Operational Excellence Consulting. All rights reserved. 2 © Operational Excellence Consulting. All rights reserved. 2 Learning Objectives Acquire knowledge on sustainability management Gain an overview of the ISO 20400 standard and its contents Gather practical tips on how to get started with ISO 20400 NOTE: This is a PARTIAL PREVIEW. To download the complete presentation, please visit: https://www.oeconsulting.com.sg

4. © Operational Excellence Consulting. All rights reserved. 4 Projected Growth In Population & Resource Demands By 2050 With 9.7 billion people on the planet by 2050, we can expect a 54 percent increase in global food demand and 56 percent increase in energy demand. Source: The Nature Conservancy

5. © Operational Excellence Consulting. All rights reserved. 5 $1Trillion Worth of all food produced each year ends up rotting in the bins of consumers and retailers, or spoiling due to poor transportation and harvesting practices. Source: United Nations Global Compact

6. © Operational Excellence Consulting. All rights reserved. 6 Mindset Of A Non-sustainability Thinker “Impact of our effort will be so low it won’t even move the needle.” “A PR project to enhance the company image.” “It only has to do with Marketing and Operations.” “Let’s leave it to others to do it.”

7. © Operational Excellence Consulting. All rights reserved. 7 What is Sustainability? Climate Change? Conservation? Renewable Energy? Eco-friendly? Circular Economy? Green? Grassroot Activism? Sustainable Growth? Better Use of Technology? A Population Problem? Regeneration?

8. © Operational Excellence Consulting. All rights reserved. 8 What is Sustainability? § Sustainability first operates under the assumption that resources are finite § Since resources will not last forever, sustainability attempts to meet present-day needs in such a way as to not compromise resources for future generations § When making use of resources, we should contemplate long-term goals and the consequences of reaching those goals

9. © Operational Excellence Consulting. All rights reserved. 9 © Operational Excellence Consulting. All rights reserved. 9 The Three Pillars Of Sustainability – Balance Between The Environment, Society & Economy ENVIRONMENTAL A viable natural environment ECONOMIC Sufficient economy SOCIAL Nurturing community SUSTAINABLE DEVELOPMENT

10. © Operational Excellence Consulting. All rights reserved. 10 What Is A Sustainable Business? A sustainable business is one that: § generates profits for its owners, § protects the environment, and § improves the lives of the people with whom it interacts

11. © Operational Excellence Consulting. All rights reserved. 11 Why Is Sustainability Important? New Growth Opportunities Sustainability is not only essential in order to prevent negative global changes but also offers opportunities in new areas of growth. Green Investment & Societal Development Sustainability is seen as a necessary component in business; investors keep in mind the company’s environmental protection and community development efforts. Positive Business Results A reasonable degree of sustainability in business is usually responsible for improved productivity, lower debts, equity, and better financial condition. Improve Corporate Reputation Most reputable businesses believe that sustainable business strategies improve the company’s mission, reputation, and customer reviews.

12. © Operational Excellence Consulting. All rights reserved. 12 U.N. Sustainable Development Goals (SDGs) § The SDGs represent an ambitious plan to enhance peace and prosperity, eradicate poverty and protect the planet § They are recognized globally as essential to the future sustainability of our world

13. © Operational Excellence Consulting. All rights reserved. 13 ISO Standards Contribute Directly To The U.N. Sustainable Development Goals (SDGs) ISO 14001:2015 Environmental Management System ISO 20400:2017 Sustainable Procurement ISO 37101:2016 Sustainable Development in Communities ISO 26000:2010 Social Responsibility ISO 9001:2015 Quality Management System ISO 50001:2018 Energy Management System ISO 37001:2016 Anti-Bribery Management System ISO 45001:2018 Occupational Health & Safety Some examples of popular ISO standards that are adopted by various companies and organizations: This presentation will focus on ISO 20400

14. © Operational Excellence Consulting. All rights reserved. 14 Procurement in the public sector alone accounts for around 12% of GDP and 29% of government expenditure in OECD member countries. Source: 2016 OECD Survey on Public Procurement

15. © Operational Excellence Consulting. All rights reserved. 15 What is Sustainable Procurement? § Sustainable procurement entails making purchasing decisions that meet an organization’s needs in a way that benefits them, society and the environment § This is achieved by ensuring that the working conditions of its suppliers’ employees are decent, the products or services purchased are sustainable, where possible, and that socio- economic issues, such as inequality and poverty, are addressed

16. © Operational Excellence Consulting. All rights reserved. 16 What is ISO 20400? § ISO 20400 is the world’s first International Standard for sustainable procurement § Aims to help organizations develop and implement sustainable purchasing practices and policies § Guides managers and directors of the procurement function to align procurement with an organization’s goals and objectives and create a culture of sustainability

17. © Operational Excellence Consulting. All rights reserved. 17 Who is ISO 20400 for? § ISO 20400 is aimed at organizations of all sizes, in both the public and private sectors § It is intended for stakeholders involved in, or impacted by, procurement decisions and processes § Applies to virtually every purchasing decision from office supplies and caterers to energy providers, building materials and more

18. © Operational Excellence Consulting. All rights reserved. 18 ISO 20400 Is Applicable To Any Organization That Wishes To… § Develop and implement sustainable purchasing practices and policies § Make sure that the products and services that it buys achieve value for money with the lowest environmental impact and most positive social results § Ensure that each stage in the supply chain meet certain sustainability targets

19. © Operational Excellence Consulting. All rights reserved. 19 Benefits of ISO 20400 § Ensures supply chain security (i.e. product recall or supplier failure) § Prevents financial, environmental and reputational risks § Fosters investor and customer confidence § Promotes employee well-being § Contributes to opening new markets for products and services

20. © Operational Excellence Consulting. All rights reserved. 20 Table of contents of ISO 20400 1. Scope 2. Normative references 3. Terms and definitions 4. Understanding the fundamentals 5. Integrating sustainability into the organization’s procurement policy and strategy 6. Organizing the procurement function towards sustainability 7. Integrating sustainability into the procurement process

21. © Operational Excellence Consulting. All rights reserved. 21 Schematic view of the contents of ISO 20400 4. UNDERSTANDING THE FUNDAMENTALS 4.1 Concept of sustainable procurement 4.2 Principles of sustainable procurement 4.3 Core subjects of sustainable procurement 4.4 Drivers for sustainable procurement 4.5 Key considerations for sustainable procurement Provides an overview of sustainable procurement. Describes the scope and principles of sustainable procurement. Examines why organizations should undertake sustainable procurement. All 5. INTEGRATING SUSTAINABILITY INTO THE ORGANIZATION’S PROCUREMENT POLICY & STRATEGY 5.1 Committing to sustainable procurement 5.2 Clarifying accountability 5.3 Aligning procurement with organizational objectives and goals 5.4 Understanding procurement practices and supply chains 5.5 Managing implementation Provides guidance about how sustainable considerations should be integrated at a strategic level within the procurement function to ensure that the intention, direction and priorities are documented and understood by all parties involved in sustainable procurement. A key deliverable is the sustainable procurement strategy. Top management 6. ORGANIZAING THE PROCUREMENT FUNCTION TOWARDS SUSTAINABILITY 6.1 Governing procurement 6.2 Enabling people 6.3 Identifying and engaging stakeholders 6.4 Setting sustainable procurement priorities 6.5 Measuring and improving performance 6.6 Establishing a grievance mechanism Describes the organizational conditions and management techniques needed in order to successfully implement and continually improve sustainable procurement. Procurement management 7. INTEGRATING SUSTAINABILITY INTO THE PROCUREMENT PROCESS 7.1 Building on the existing process 7.2 Planning 7.3 Integrating sustainability requirements into the specifications 7.4 Selecting suppliers 7.5 Managing the contract 7.6 Reviewing and learning from the contract Describes how sustainability considerations should be integrated into existing procurement processes. A key deliverable is a sourcing strategy that includes sustainability. Individuals responsible for the actual procurement 1. SCOPE 2. NORMATIVE REFERENCES 3. TERMS & DEFINITIONS Description Mainly intended for ANNEXES Source: ISO

22. © Operational Excellence Consulting. All rights reserved. 22 Getting Started With ISO 20400 § Know your supply chain • Evaluate the cost of the supply chain in your organization • What proportion of your revenue goes towards paying suppliers? • Do you know their societal and environmental impact? Source: ISO

23. © Operational Excellence Consulting. All rights reserved. 23 Operational Excellence Consulting is a management training and consulting firm that assists organizations in improving business performance and effectiveness. Based in Singapore, the firm’s mission is to create business value for organizations through innovative design and operational excellence management training and consulting solutions. For more information, please visit www.oeconsulting.com.sg

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