Home' Inclean NZ : INCLEAN NZ Nov 2017 Contents 14 INCLEANNZ November 2017
Many organisations spend a large proportion
of their revenue on their supply chain. But
unless they have the buying power of multi-
national, it can be incredibly challenging for
procurement managers to obtain accurate
data (especially from imported goods) or to
influence the outcome.
Even when the credentials are proven,
buying departments may be reluctant
to award a tender to a more sustainable
option if the upfront costs are higher, or an
innovation represents too much change.
As a result, sustainable procurement gets
put into the too-hard-basket or paid lip-
service to – an all too familiar pattern when
procuring cleaning services. For suppliers of
sustainable products and ethical services, and
even for people within the organisation, this
barrier can be very frustrating.
Because sustainable supply chain issues are
global ones, the International Organisation
for Standardisation (ISO) has developed a
new standard for sustainable procurement –
Social and environmental
ISO 20400 is a guidance standard, not a
requirements standard like ISO 14001, so
organisations can’t be certified for compliance.
The purpose of this Standard is to provide the
buying organisation with a clear framework
and practical guidance for ensuring their
expenditure matches their sustainability policy.
It consists of four sections:
1. Fundamentals: underlying
principals, considerations and drivers
(i.e. reputational risk, shareholder or
2. Policy and strategy: plan and prepare
for sustainable procurement.
3. Enablers: conditions that need to be in
place to make it happen, and
4. Procurement process: a step-by-step
guide to incorporating sustainability into
a procurement process.
Accountable, transparent and
ethical cleaning services
Topping the list of key principals for
procuring products and services are;
accountability, transparency and ethical
behaviour. This is not just wishful thinking.
The Standard emphasises the responsibility
of the procurer to conduct due diligence and
to avoid “complicity”.
That means not turning a blind eye to
bad practices in their cleaning service
supply chain. It acknowledges that it is the
client who sets the price via the tender they
accept. In fact, unless the contract price is
fair, none of the environmental and social
sustainable principals of ISO 20400 can be
Competitive bidding in the cleaning industry
has created a race-to-the-bottom without any
winners and there are no signs of it abating.
Every service provider I have spoken to lately
has expressed dismay at the number of bids
they are missing out on due to price.
If a contract is under-priced, it stands to
reason that the new contractor will need
to cut their own service costs to maintain a
profit margin. And their largest cost is labour.
This is driving illegal sub-contracting and
cleaner exploitation to new levels, and good
companies to the wall.
But any short-term gain at the purchasing
stage causes long-term pain over the life
of the contract. For a start, the purchasing
organisation and responsible individuals
are at risk of financial penalties and
reputational damage for accessorial liability,
if a breach of the Fair Work Act (FWA) is
found. But there are also multiple other
risks and hidden costs, including:
• Poor standards of cleanliness and
hygiene, increasing complaints and loss of
• Surface damage from missed periodicals
and grime build-up requiring additional
cleans and costs
• High turn-over of workers needing
retraining of security / waste / requirements
• Under-resourced supplies and cheap (or
• Overall lack of control and poor
communication chewing up
• Business continuity risk
• Security risk (who is really cleaning
Bad procurement costs more
than sustainable procurement
So how can a procurement department
use ISO 20400 to shift this deadlock and
address these risks? Cost benchmarking
during the cleaning tender evaluation
process must be able to account for the
true life-cycle cost of buying and managing
a service – to the organisation and to the
cleaners. And it must factor in the potential
added value and opportunities of having an
engaged and well-trained workforce.
The Sustainable Procurement Standard
prioritises ‘sustainable supply’ rather than
‘sustainable supplier’. In other words,
focusing on what the service delivers – not
their policies. It also provides guidance
on managing the contract including;
managing the supplier relationship,
implementing the contract, using a
contract management plan, managing
perfor mance, customer/supplier joint
initiatives, managing supplier failure and
managing end of contract.
Sustainable procurement should result in
sustainable services in every sense of the
word; environmental, social and financial.
Because bad procurement costs more than
To find out more about ISO 20040, go to:
Bridget Gardner is director of Fresh Green Clean.
She can be contacted on bridget@freshgreenclean.
A new standard for
Bridget Gardner* sheds light on the newly developed international standard for sustainable procurement.
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