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How to Choose a Framework Among All ESG Standards
In this article, we’ll give a brief overview of ESG standards, why they are important, and how your company can pick the ESG framework most suited towards your individual goals.
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Guides & E-books
ISO 20400: Meaning, Standard and Requirements
Amidst climate change and the current state of the planet is pushing companies to take bigger strides in their efforts to improve the efficiency and eco-friendliness of their businesses, and one of the many ways to do that is to seek global accreditation to certify their efforts – one of those being one of the many certifications in the ISO series.
There are so many different types of ISO certifications in the ISO series, such as the ISO 5001, ISO 9001, ISO 14067, and ISO 14001 that seek to improve business management, environmental standards, energy efficiency, investor appeal, and ultimately fight against climate change.
Businesses are becoming more aware of the importance of sustainability if they want to attract new investors for their projects – but how do they choose between the different ISO certifications?
In this article, we'll explain ISO 20400, its main components, the benefits, and how is it different from all of the ISO certifications mentioned before.
What is an ISO 20400?
An ISO 20400 is an internationally recognized standard that can help companies to better implement sustainability into their business models: including environmental, economic, and social sustainability. However, ISO 20400 focuses most on helping companies to cultivate more sustainable practices throughout their supply chains.
Any standard seeking to improve their sustainability efforts could benefit from the sustainability guidelines provided by an ISO 20400, and as a result – can help companies to improve their efforts towards sustainable procurement.
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ISO 20400 can help companies to:
- Develop deeper supplier engagement
- Boost supply chain efficiency
- Improve sustainable procurement strategies
- Encourage other policies and strategies to be modified
- Better understand the ideals represented in ISO 26000
- Avoid reputational risks
As awareness regarding sustainability continues to grow, an ISO 20400 is more than likely to be a valuable asset for any business seeking to achieve both their environmental targets and successful business revenue.
👉 However, given the premise of an ISO 20400 – it begs the question if an ISO 20400 more valuable than other certifications in the ISO series?
How is an ISO 20400 different from other certifications in the ISO series?
In comparison to other certifications available in the ISO series, such as the ISO 14067, ISO 5001, ISO 9001, ISO 14001 – the ISO 20400 is the only certification of these other ISO certifications that can directly or indirectly benefit the main goals of these other ISO certifications.
This is because several of these ISO certifications seek to improve the management of systems of businesses – something that an ISO 20400, which helps companies who train to acquire the certification improve their knowledge upon sustainability across all areas, can help immensely to achieve.
For instance, the ISO 9001 aims to help a company improve their Quality Management System, or a QMS. An ISO 20400 can help to improve customer loyalty through efforts to improve sustainability – which will indirectly improve a company’s Quality Management System. Another example is with the ISO 14001, which is dedicated to improving a company’s Environmental Management System, or an EMS, by implementing new environmental goals.
An ISO 20400 can help a company determine which environmental goals will prove most viable, achievable, and correlate to their other sustainable development goals. A final example is with the ISO 5001, which seeks to improve the Energy Management System of a company in order to improve their energy efficiency.
💡 An ISO 20400 can motivate companies to alter their energy usage, and seek to utilize more renewable energy resources – directly improving the Energy Management System of a company.
In short, acquiring an ISO 20400 can help a company to acquire several other certifications in the ISO series – ultimately improving their customer loyalty, investor interest, and overall impact on the environment.
When it comes to the different ISO certifications, it is clear that acquiring more than one ISO certification is most optimal – as the different management systems they seek to improve can directly affect and potentially benefit one another if each is running as smoothly as they can.
👉 However, given an ISO 20400 seeks to improve all three pillars of sustainability – it could be viewed as the “ultimate” ISO certification in the series for its potential to improve all aspects of the company.
What are the 7 principles of ISO 20400?
The 7 principles of ISO 20400 include improved organization governance, human rights, labor practices, environmental circumstances, fair operating practices, adhering to consumer issues, and encouraging community involvement and development.
Ultimately, the 7 principles of ISO 20400 are meant to not only benefit the business implementing ISO 20400 – but for the surrounding community, consumers, and employees relevant to the business.
Here's a further breakdown of the 7 main principles of ISO 20400:
- Organization Governance – This principle works to ensure that clear policies, procedures, and structures are implemented to help improve sustainable procurement practices. As a result, companies may be inspired to improve their organizational skills and governance elsewhere within their business while also boosting the need for accountability.
- Human Rights – This principle refers to ensuring that humans are treated fairly across various supply chains, such as by ensuring fair labor practices, mitigating child labor, and avoiding discrimination.
- Labor Practices – In a similar vain to the previous core value for ISO 20400, this principle works towards ensuring safe and fair working conditions are consistent throughout the organization – such as with sufficient salaries and an emphasis an health and safety (or EHS).
- Environmental Circumstances – Evidently, ISO 20400 can help companies to reduce their environmental impact by boosting supply chain sustainability and improving the procurement process.
- Fair Operating Practices – This core principle for ISO 20400 helps to pontificate the importance of transparency and demonstrate the long-term benefits of ethical behavior to supply chains.
- Consumer Issues – In 2022, a whopping 90% of Europeans stated that sustainability was important to them when shopping for a new product. Luckily, one of the core principles of implementing ISO 20400 can help companies to attract these kinds of customers – as ethical sourcing and overall greater awareness in procurement can help boost sustainability.
- Encouraging the Surrounding Community – As a ripple effect, ISO 20400 can help to encourage sustainable initiatives beyond sustainability within the organization, such as helping to boost local sourcing and develop green infrastructure.
👉 Remember, the 7 main principles of ISO 20400 all help companies work towards greater sustainable development. Sustainability is often referred to as the three pillars of sustainable development: economic sustainability, environmental sustainability, and social sustainability. All three pillars of sustainability are crucial for any company seeking to achieve global recognition for their efforts towards sustainability – and an ISO 20400 can help to make that possible.
What are the benefits of acquiring an ISO 20400?
There are numerous benefits to be had for any company that seeks an ISO 20400 – such as helping to reduce the environmental impact created on behalf of your supply chain and attracting new customers or stakeholders.
Given awareness and importance on implementing sustainable business practices is growing by the day worldwide, due to both new legislation and worrisome fears over the current global predicament of climate change – improving upon sustainability can reap a multitude of rewards for everyone involved.
💡 Becoming a sustainable company doesn’t just mean keeping the environment in mind, but it could help your business become more stable both economically and socially.
It is easy to use convenient marketing tactics, like greenwashing, to convince consumers and potential investors that a business is more sustainable or eco-friendly than they actually are – but acquiring a globally recognized certification like an ISO 20400 can put any doubts on the validity of a company’s efforts towards sustainability to rest.
Holding an ISO 20400 certification will ultimately allow businesses to improve their sustainable procurement system with newfound knowledge on the three pillars of sustainable development, acquire newfound expertise on the importance of economic, social, and environmental aspects, better understand the intent behind the 30 sustainable development goals as delineated by the UNGC, improve their supply chain management, improve resource management and improve the life-cycle of their products, carefully consider risk management, comply with new regulations, and gain international recognition.
👉 In short, acquiring an ISO 20400 is a great way to maintain the three pillars of corporate sustainability and a great way to maintain the three pillars of corporate sustainability. This is because the training sessions in order to receive an ISO 20400 in the first place often require the person in training to study the most sustainable protocols on worker rights, environmental regulations, and economic prosperity – all in order to ensure that every working part of the supply chain continues to operate as efficiently as it can.
What are the four main components of an ISO 20400?
The main goal of an ISO 20400 is to provide companies with assistance on sustainable procurement, and in order to help other businesses accomplish this – the ISO 20400 operates on four main principles to adhere to its varied goals towards sustainable development.
The four main principles of ISO 20400 are:
- Understand the basics of sustainable acquisition and social responsibility
- Incorporate sustainability into the entity in question through the use of both policy and strategy
- Organize all moving parts of the organization to improve sustainability
- Implement sustainable practices throughout the entire process
An ISO 20400 is multi beneficial for all components of any aspiring business, but does that mean it’s difficult to qualify and receive an ISO 20400?
How can your company get an ISO 20400?
Similar to many other certifications in the ISO series, many companies or stakeholders looking to acquire an ISO 20400 will often seek the help of a third party to ensure proper training and documentation is in order to adequately follow the guidelines provided in the certification.
💡 However, this is not necessary in order to procure sustainability – as an ISO 20400 is more of a guidance document than it is a requirements standard.
Remember, an ISO 20400 encourages stakeholders and companies seeking to follow the guidelines of the certification to build better strategies to improve upon their sustainable development.
Therefore, the best steps to take for those seeking an ISO 20400 certification are to develop new, sustainable management policies for their supply chains, encourage the engagement of their employees (especially the procurement team or those who have the largest impact on sustainable procurement activity) through the use of workshops and trainings to solidify the importance of sustainability, and develop improved procurement infrastructure.
This includes revamping the method of developing new policy and strategy creation, improving risk management, seeking to measure KPIs and other various progress, reorganizing each strategy towards sustainability into the appropriate categories, and seeking third-party support when necessary.
👉 It may seem time consuming to follow the guidelines provided by an ISO 20400, but it’s one of the best things any organization looking to improve upon the three pillars of sustainability can do.
Why is an ISO 20400 worth the time and effort to acquire?
Out of all of the ISO certifications we’ve mentioned on our blog at Greenly before, an ISO 20400 may be one of the most valuable ISO certifications to acquire. This is because an ISO 20400 can help open the doorway to achieve almost all of the other ISO certifications previously mentioned, and simultaneously – help to improve the requirements necessary to maintain many of the ISO certifications mentioned above.
Procuring sustainability is a goal for many in this day and age, but it’s nearly impossible to implement sustainability, let alone maintain it – without the proper guidance. Think of incorporating sustainability to be a lot like weight loss. Sure, it’s easy enough to go to the gym and change your diet for a few weeks – but changing your lifestyle over the long-term can prove to be more challenging.
💡 The same goes for sustainability, and with an ISO 20400 – companies can receive the guidance they need to take and maintain this monumental step towards sustainability to reap the benefits for themselves, as well as the planet.
What about Greenly?
If reading this article about ISO 20400 has made you interested in reducing your carbon emissions to further fight against climate change – Greenly can help you!
At Greenly we can help you to assess your company’s carbon footprint, and then give you the tools you need to cut down on emissions. We offer a free demo for you to better understand our platform and all that it has to offer – including assistance with boosting supplier engagement, personalized assistance, and new ways to involve your employees.
Click here to learn more about Greenly and how we can help you reduce your carbon footprint.
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