About laws, guide-lines and standards for more sustainability

In Switzerland, the revision of the Federal Law on Public Procurement (BöB) is currently under discussion, and the Commission for Economic Affairs and Taxation has just continued its detailed consultations. The aspect of sustainability is to be included more strongly. A clear commitment to sustainability in public procurement offers the opportunity to strengthen the Swiss economy and in particular those companies that distinguish themselves through high quality and sustainability standards. Upgrading the role of sustainability criteria in public procurement is also in line with the Sustainable Development Strategy 2016-2019, in which the Confederation states that it acts as a role model in its consumption behaviour.

With the current draft revision, there would still be sufficient leeway to define individual criteria and targets depending on the contract. On the one hand, this would favour companies that are progressive and already apply effective sustainability criteria. On the other hand, companies that are only beginning to deal with sustainability would also have an incentive to comprehensively review their supply chain and set their own sustainability targets.

Reputational and compliance risks
Sustainable supply chain management can not only strengthen your competitive position in public tenders, but can also minimize reputational risks and reduce regulatory and compliance risks. There is particularly high risk potential in the following areas:

Greenhouse gas emissions: High GHG emissions in the supply chain lead to regulatory and cost risks. In addition, physical risks can also arise from changing climate conditions - for example, if extreme weather events occur in regions where (upstream) suppliers operate.

Air pollution: For companies, regulatory risks arise primarily along their value chain, e.g. due to stricter requirements for air pollution control. In China, for example, legal regulations on particulate matter pollution have been tightened.

Water consumption: Acute water shortages lead to production downtime risks for suppliers. In addition, future legislative measures may lead to restrictions on water consumption or to rising water costs in the supply chain. Finally, there are reputational risks in the event of social conflicts due to water shortages in regions where (upstream) suppliers operate.

Land use: Regulatory risks also exist for companies in the area of land use. In addition, the loss of natural areas and the restriction of habitats can lead to reputational risks for those companies whose supply chain has a high level of land use.

First ISO standard for sustainable procurement
There are various standards and labels that certify certain sections of a supply chain, but never cover the entire supply chain. In order to promote cooperation with suppliers who work sustainably according to social, economic and ecological aspects, the ISO/PC 277 committee therefore introduced a new standard in 2017.

ISO 20400 is the world's first standard for sustainable procurement and aims to help organizations develop and implement sustainable procurement practices and policies.

"The sustainable procurement standard is a guidance standard."

Similar to ISO 26000 on corporate social responsibility, the standard on sustainable procurement is a guidance standard and therefore cannot be certified. Rather, it shows the applying companies the process for continuous improvement. Due to the lack of certification, it is not very suitable as an instrument for external communication.

Whether a company follows a standard, label or norm depends on the purpose of its commitment. For a strategic, well-founded revision of supply chain management according to sustainable criteria, a standard such as the new ISO 20400 is recommended. In addition, it can be worthwhile for the company to adhere to certain standards and labels.

On the one hand, they serve as a source of information for the formulation of a procurement strategy or codes of conduct and simplify the process of evaluating suppliers or products through audits. On the other hand, they are indispensable for measuring sustainability performance in the supply chain - and finally for communicating performance to customers. This last point should not be neglected. The growth rates of the market for certified products and products produced in accordance with voluntary sustainability standards have been outstripping the growth of the market for conventional products for years.

Turning the cocoa supply chain around
Apart from the available information, tools and certification options, there are also industries that are breaking new ground. One example of this is the chocolate industry. CHOCOSUISSE, the Association of Swiss Chocolate Manufacturers, launched the Swiss Platform for Sustainable Cocoa in 2017 together with the State Secretariat for Economic Affairs SECO and non-governmental organisations such as Swiss-contact and Helvetas. The Cocoa Platform aims to use this multi-stakeholder approach to substantially improve the living conditions of producers and to create an attractive cocoa sector for current and future generations.

In short, the platform aims to sustainably transform the chocolate value chain. In addition to networking the stakeholders - from the players in the producing countries to the chocolate manufacturers in Switzerland - the sponsoring organisations also promote innovation and develop best practice guidelines.

This example shows that there is no silver bullet, but that depending on the industry, different roads lead to Rome. Not every company can and must be certified. What all these approaches have in common is that transparency in the value chain and increased communication with customers are absolutely central to sustainable supply chain management.