The public procurement market in Europe seems set to adopt new EU directives that give a higher status to product labels, standards and certifications, including sustainability labels and ecolabels. The new directives were adopted in February 2014 and EU members are now in a two year phase-in period as the New Procurement Directives are transposed into national legislation by early 2016.
The new directives make explicit reference to the role of labels, including sustainability labels, in technical specifications, award criteria or contract performance conditions in the tendering process. This is recognition of the important role of labels in achieving sustainability aims.
The importance of this development has been brought to notice recently by ISEAL, the global alliance of environmental accreditation and labelling organisations. ISEAL has released a draft guidance document for its members and similar schemes to help them best position their labels and take advantage of the new EU directives. Public procurement in the EU is nearly 19 per cent of its GDP and companies and organisations that are compliant with ISEAL’s code of good practice are expected to fulfil the requirements of the EU directives and thus can directly tap into this huge market.
Europe has always been the trendsetter on the sustainability front, and so apart from direct implications for public procurement in Europe, this is a good indication of the things to follow in other sectors in Europe and around the world.
Parallel activity at an international level can also be observed with the International Standards Organization in the process of developing an ISO standard on sustainable procurement (ISO 20400). The standard is intended to bring value beyond the procurement and purchasing community by helping to disseminate CSR practices contained in ISO 26000:2010, Guidance on social responsibility, throughout supply chains, and ultimately the entire economy.
A project committee has been set up to develop the standard and 20 countries, including Australia in an active role, are currently participating in its work. It is estimated that the standard will be released in 2016 and is expected to significantly influence the way procurement practices are undertaken in Australia. Sustainability labels, certifications and standards again have a high visibility in the ISO standard too.
With a dearth of regulations on the products front, the emergence of these initiatives is most welcome for triggering a much needed change in this area. With growing concerns over the hordes of non-compliant products entering into Australia, labels and certifications offer a level of assurance on the quality of the product, including its sustainability credentials.
These initiatives encourage the specification of sustainable materials by either including the labels themselves, or the label criteria, into the technical requirements. The former option is ideal, but the second option is included because currently the percentage of certified sustainable products in the market (worldwide generally) is still a small proportion of the total number of products available. However, it is important to note that procurement professionals need to take sufficient caution in assessing the evidence provided by companies to meet these requirement as such information may not necessarily come from an independent third party.
In regard to using sustainability labels themselves as a technical requirement, it might be useful to know the various attributes of labels that need to be kept in mind when evaluating their suitability for a particular situation before making any decisions, as they can vary greatly. These aspects or attributes can be essentially classified into two broad categories: the scheme itself and the technical requirements.
The scheme category deals with issues of governance, transparency and the standards development process of the scheme. Some questions to ask in this regard are: to what extent have multiple stakeholder interests, stakeholder and public consultation been considered in the standard development process? Is there easy and free public access to the standards? How much commercial interest does the certifying organisation have in the outcome of certification? How much independence is there between the certifying organisation and the auditing body (or bodies)? How rigorous is the certification process, i.e. how much quality assurance is there for the auditors themselves? Who is the owner of a scheme – is it an industry body, a private organisation or an NGO? How old is the scheme and what is its track record? Answers to these questions can shed a lot of light on the credibility and robustness of a scheme.
Coming to the technical aspects, labels can be of two types. The first type provides information on the product performance in certain impact categories (generally environmental), similar to a nutrition label on food products. This recently emerging type of label is known an Environmental Product Declaration or EPD. This encourages transparency in the product supply chain and is expected to drive continuous improvement; however, it does not directly tell a procurement professional if the product is, in fact, sustainable.
Then there is the second type of label, a certification mark that tells a specifier that the product meets certain sustainability standards and thus offers a level of assurance about the sustainability performance of the product. Questions worth considering for this second type of label are: how much of the “product system” is within the scope of the label – product or product and packaging? What are the range of issues or criteria covered – environmental, health, social and ethical, legal, fitness for purpose (which is often overlooked for sustainable products)? Are impacts limited to a particular life cycle stage, a few stages, or cover the complete life cycle of the “product system” from extraction of raw materials to retirement and closing the loop? Are the standards based on any international standards, such as ISO 14024 for Type 1 (third party) environmental labelling? How stringent are the set requirements? How much robust scientific knowledge underpins the standard? Answers to these can give an idea of the comprehensiveness and rigour of the standards used for certification.
Finally, the alignment of a scheme with other similar schemes is also an important consideration, particularly at the international level (for example ISEAL alliance, GEN or Global Ecolabelling Network) as this further contributes to the credibility, robustness and rigour of the label.
Dr Shaila Divakarla is standards and technical manager at Good Environmental Choice Australia.