When is an audit not an audit?
When it is an evaluation, says Shaun McCarthy, who explains the subtleties of the sustainable procurement standard ISO 20400.
After spending four years unpaid and travelling at my own expense to develop the new international standard for sustainable procurement, ISO 20400, I have been delighted to see the positive reaction. The standard has been welcomed around the world.
Using the resources of our social enterprise, Action Sustainability Community Interest Company, we have set up a global, not-for-profit hub to share learning (www.iso20400.org). In a few short weeks we’ve had contributions from France, Sweden, Netherlands, Australia, Argentina, US and many more.
We are also busy updating the Supply Chain School with exciting new content about the new international standard, which has replaced the British standard BS 8903.
Through our commercial business we have been proud to conduct what we believe to be the world’s first evaluation against the standard with Balfour Beatty. The announcement resulted in a flurry of questions to ask if they had “passed” or “failed” or if they are now “certified” against the standard.
The fact is, it’s not like that. This is one of a new breed of standards: a guidance standard, not a requirements standard. This means we are free to work with a client to understand how they have interpreted the guidance in the context of their business, established evidence to confirm they have done what they said they are doing and then to express our professional opinion through findings and recommendations.
It is a much more engaging and constructive process where the client builds their strategy over time and can be evaluated to gauge their approach at a time when they most need professional advice. Too many audits end up as a competition between the auditee’s ability to hide bad stuff and the auditor’s ability to unearth what they have hidden.
A guidance standard helps us to engage more openly and transparently. We can’t provide proper advice if we do not have open and free access to the client.
There are benefits for the client too. Aaron Reid, head of sustainable procurement at Balfour Beatty, said: “We weren’t after a badge or certificate when looking at how we could improve our approach to sustainable procurement; we wanted an insightful overview of where we were and how we could improve.
“We have a strong and diverse supply chain, which carries risk as well as opportunities. When it comes to sustainability, the management of those risks, and unlocking the wider potential of our supply chain, is critical if we are to have an effective approach to managing sustainable procurement.
“The removal of a ‘pass or fail’ status allowed us to have honest and frank discussions with the assessors, which in turn resulted in a much clearer picture of where we stand and what we need to do to move forward.
“Audits and certifications obviously have their place but the flexibility within the ISO 20400 assessment in applying the guidance standard to our business ensured that it was relevant and proportionate, which ultimately should ensure more meaningful and sustainable outcomes than a beautifully hung certificate in reception.
For more than 10 years, businesses and public bodies have been striving to leverage greater sustainability outcomes through their spending power. Although progress has been made, societal expectations are at an all-time high and the procurement profession needs to step up.
A truly global standard developed over four years involving 40+ countries is a very compelling solution. You just don’t get a certificate on your wall!
Shaun McCarthy OBE is director of action Sustainability