Episode 81 - Aaron Reid – from Alfreton to Sydney

Sustainable procurement expert Aaron Reid shares his thoughts on ISO 20400 from a UK and Australian perspective.

 In this series we are interviewing as many people around the world as we can with real experience of applying ISO 20400 to their procurement operation. What works, what needs improvement. Is the standard still relevant? No consultants, no sales plugs, just honest opinions from people with a story to tell.

For more information go to https://www.iso20400.org/

Transcript

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SPEAKER_00 0:15

Hello and welcome to Sense and Sustainability, a podcast about sustainable procurement. I'm Sean McCarthy, Director of Axis Sustainability Community Interest Company, and I'm delighted to welcome an old friend and colleague to our podcast series, Aaron Reed. Welcome, Aaron.

SPEAKER_02 0:31

Hey Sean, how are you doing? Great to see you. Or should I say good day?

SPEAKER_00 0:36

Oh wow. You're getting into the language as well as the climate. Yes. So Aaron, this podcast series that we're starting to run now is all about ISO 2400, which goes nicely with our um website iso2400.org. What we're trying to do is to gather experience from people all around the world of using the standard and how it works for them. And your uh experience in the UK and in Australia is particularly valuable and relevant. But can we start by just if you'd like to introduce yourself, um, talk to us about your background and how you got involved in sustainable procurement and what you do there?

SPEAKER_02 1:17

Yeah, sure. Thanks, thanks, Sean. At the moment, I'm literally, figuratively, and all kinds of other ways, much further away from where I started. I'm I'm currently in Sydney, Australia, working for a company called Ventia, Australia's favourite infrastructure services company, doing some work around social value and trying to embed social sustainability considerations into procurement process. Really interesting times out here at the moment in terms of the whole sustainable procurement agenda, but I'm sure we'll get into that later. My my background and and how I got into this, I suppose, was uh a little bit by accident. I I started off working, or I say started off um way back when I worked in recruitment and ended up doing a lot of work around EDI, we called it at the time, equality, diversity and inclusion. And there was a project in Birmingham called Birmingham Professional Diversity, and we were funded to support organizations to manage the implications of the change in demography, which was quite a mouthful. But really, what that meant was that the population was changing, and if you keep recruiting how you're recruiting, you're going to run out of people and certainly run out of local people, and that's not going to be good for the economy. And so we were essentially asking people to recruit more ethnically diversely, and um it went really well. We had lots of people supporting us and signing pledges, but we also had some very public, high-profile people who weren't so supportive. And I remember the moment that the penny dropped for me about the power of procurement was one particular person who was very vocal about how they weren't gonna support and how they did not agree. And I I just remember walking away from that conversation thinking, if it's the last thing I do, that person is gonna and and we ended up um talking to some of their customers. And what we asked them to do was, you know, as a publicly funded government organization, Birmingham Professional Diversity, we're open to having these conversations, and they led us in and they said, Well, you know, what would you like us to do? And we said, Well, we'd like you to put this clause in that contract for that organization over there, and over a six-month period, this organization kind of gradually got a series of these similar requirements, all pushing them back in our direction to do the thing we wanted them to do. And I remember thinking, there is something in this, isn't there? Is there's lots of people, and I I would love to live in a world, and I have this conversation regularly, I'd love to live in a world where people do these things, the things that we need them to do for the benefit of all concerned for the right reason. But unfortunately, that that's not always the case. And you know, how's that going so far in terms of you know climate change? How's that going so far in terms of social justice? We've got to use the levers available to us to incentivize people, particularly private business, to do this. And so I was sold from that moment. And I think not long after that, I took a job with Boris Johnson at the time, who was mayor of London on Diversity Works for London, and very quickly got involved with his broader responsible procurement team. And I think that's where where we started to have conversations over. I think you were at it was over the United Nations Flexible Framework piece of work that you were doing at the time that really kind of certainly for me start kind of changed my thinking and the way that I structured and put a framework around this thing that we called passback and was just a loose idea that we could use the power of procurement, actually was a thing. And this thing was called the flexible framework, which then turned into BS8903, which is now ISO 2400. So I was a very early convert to the logic and and have always been kind of convinced of, you know, first the flexible framework, then BS8903, then ISO 2400. Its ability to simplify and communicate really complex and what might seem to some people diverse and separate issues into a co kind of coherent message. So yeah, that that's uh a bit of a waffle, but yeah, a bit of my background and a bit of how I got into this and a bit of why I love um sustainable procurement. I hope that wasn't too much.

SPEAKER_00 5:25

No, that's absolutely fine. It's interesting that you should harp back to the flexible framework. I was involved, as you know, in the sustainable procurement task force, the government UK government task force in 2005. Um lots of you know, very important, very clever people around the table. You you get about 40 people around the this big government, uh big government table, but only about four of them were never actually bought anything. There wasn't that much based on procurement experience in the room, although a lot of expertise and a lot of political leadership, etc. And um yeah, I uh when we were drafted a report, I I just sat there with the spreadsheet and said, Well, why don't we have like a centre volume to the report that looks a bit like this? Which, after a lot of work by a lot of people, became the flexible framework. And I kind of think that we created a monster with a flexible framework because what I didn't realize was that people would just start in the top right-hand corner and took each of the boxes. I've done this, I've done this, I've done the training, I've done the process, I've done you know, all of these things, and I get to the bottom right-hand corner, and then I've done sustainable procurement. Because what the flexible framework didn't say was you have to actually do some sustainable procurement. It was a strategic framework for enabling an organization to do sustainable procurement. But unfortunately, a lot of people using the flexible framework didn't get that, they just thought they had to keep what was, and as you say, then that led to BS803, which actually said to you you should do some sustainable procurement, um, which was quite quite helpful, and uh and then the ISO standard. So I I guess you you sort of answered my next question to a degree in terms of what you know what made you start to use um what was BS803 and then the ISO standard. And and can you talk to us a little bit about some of the challenges that we implemented that in the organizations you worked for?

SPEAKER_02 7:28

Just to close out the previous one, to be fair, you know, with without that learning of flexible framework, there would be no BS8903, and without the learning of BS 8903, there'd be no ISO 2400. And so I definitely recognise, you know, look with the power of hindsight, you know, looking back how simple it was, and absolutely, you know, we I remember getting it and and everybody being incentivized to work straight through it and and get to the end of it, and then we've won, right? But it it it got people thinking, it got the you know, it brought people to the table. But for me, these the the important point around that is this thing about process versus outcomes, and the this certainly a tendency in governance-heavy type organizations for people to want to tick this and to to process it and to evidence that they have completed it. And I suppose that's one of the reasons why I liked ISO 2400, because it's a guidance standard, and because it's a guidance standard and not a pass or fail standard, what that meant was it it was just a completely different conversation that we had within organizations, because instead of talking about okay, how do we push all of the best practice forward to the evaluators and the auditors so that we pass the the audit or the evaluation and the the outcome is passing, and you know, to not pass is is therefore failure, right? And and failure, that's not good, and we we can't have that. Whereas actually the place where we were at the time, what it needed was just an honest, genuine assessment of where are we at the moment against what is perceived to be best practice globally, and then use that as a as a baseline. And because there was no fear of failing, we could just be absolutely honest, as I'm sure everybody is anyway, about pushing all of the bad practice forward and pointing auditors towards all the dark corners, because the value for us in the process is getting the advice about all of the hard stuff. If we just got, oh, you're great, wonderful, here's a stamp, that doesn't help us at all to improve what we're trying to do. And actually, there's a thing about efficiency because it can become more expensive to try not to achieve outcomes than it is to just try and hardwire it in and do it as business as usual. And so I much prefer to solve the actual problems that we have as opposed to pretending that everything is fine and not solving this. So for me, ISO 2400 was helpful because the best brains in the world had already decided what good looks like. And so instead of having to persuade stakeholders of each individual thing that I wanted to do, and this was the case prior to ISO 2400, everything that I wanted to do, there was a business case for, and I had to explain to hundreds of different stakeholders the benefit of each because they didn't get how all these different things were connected. And then with ISO 2400, the question became Aaron, is this thing that you are describing, does it or does it not support us to further um you know progress within the ISO 2400 framework? If the answer is yes, on you go. If the answer is no, please provide a business case. And so it made it much more efficient for me just to get on with and have a mandate for delivering the things that I knew were in the best interest of what we were trying to do without having to slow down and get the individual kind of business case. So I think three reasons in there somewhere, but for for all of those reasons, uh yeah, that that's why I think.

SPEAKER_00 10:57

I think it's interesting, and and I was gonna bring this up anyway, in terms of the guidance standard versus requirement standard. I'm often asked by people when's ISO 2400 gonna become a proper standard that we can have an audit against and the certificate and all those things. And you know, as you know, I agree with you. I like the idea of it being a guidance standard because for me, I mean, I my my track recording audit goes back to BS5750 before it was ISO 9001. I was a quality auditor against uh BS5750 for a while, and for me, an audit is a competition between you know how good you are at hiding the bad stuff and how good the auditor is at finding it, and that leads to an unhealthy for me disposition. However, it's not it's not like that in other parts of the world. I mean, certainly I talk to people in developing countries uh in the Indian subcontinent and particularly in sub-Saharan Africa, where all they want is a certificate, and and and it's so important culturally to get that certificate. So I think you know that this is an ongoing debate and will be an ongoing debate, I'm sure, when the standard is reviewed, whether it should or should not be uh a requirement standard or an auditable standard. But uh and and that's part of the reason we're going to do this series of podcasts to understand from people how they see the standard. And uh, you know, you're clearly in the camp of it needs to be a guidance standard, it should be made a guidance standard, but um not in every part of the world.

SPEAKER_02 12:38

Um I'm I mean I I I I definitely can you know imagine a world where a certification standard can exist, but for me it would need to exist alongside the guidance standard, because you know, if you take away the way that it incentivizes people to behave as a guidance standard, that that for me would be problematic. I would be I would be concerned about the context in which I would want to use it. So I get that it would provide a benefit to some other people in different contexts, but if you have to make a choice one or the other, then you you you're gonna take away my use case. And so I I don't know if there's a reason why why you couldn't have a universe where both exist, and so they're both based on the same framework, but actually one goes the step further and allows you to be certified against, but the other one is clear, there is equal but different value in going down this road, and potentially you do the guidance standard for if it was if it was me and I was doing it, if you asked me today and I had the choice, I'd say, okay, well, I'd start by doing the guidance standard because that's a safe place to start, and it means I can put everything on the table without fear of being embarrassed, and then get an honest appraisal, and then when I'm ready, when I feel we've made progress against it, at that point maybe I do the certification standard to demonstrate to everybody the level that I'm at. But but yeah, it would worry me having not the guidance standard, and if I had a choice, I would prefer only the guidance standard. But if if there could be both, why not?

SPEAKER_00 14:12

That's a really interesting point, actually. I'm not expert enough in standards to know whether that's possible, but it might be interesting to ask the question. I I don't know of a standard that that does both, and certainly what I do know about the ISO process is that there's like one process for guidance standards and one process for requirement standards. So I'm not sure quite how flexible the uh uh the system is, but it's certainly not flexible question. Yeah, it's a really good point. So, Aaron, getting into you know more of the the detail of the standard, can you talk to us a little bit about what works well for you in the standard? Uh you know, a slightly lower level of detail, and maybe what doesn't work and what might be able to be improved.

SPEAKER_02 14:57

A couple of things I think. I I definitely like uh uh I think as I said, kind of how it takes something very complicated and makes it very simple and is relatively easy to communicate. I mean, I caveat that with it is still quite a thick, dense, technical, heavy document, but it does at least provide a roadmap and you are able to kind of qualify things in and out depending on what's relevant or proportionate to the thing that you are doing. Relevance and proportionality, by the way. I couldn't help but but but drop drop that in being kind of one of the first things I learned in sustainable procurement, right? Well, the the the two first things that I learned in sustainable procurement, one of them was from you, Sean. It was that if sustainable procurement costs you money, you're doing it wrong. And the other was around uh r relevance and proportionality. So what what I like about the standard is uh universal application. So the fact that it is a a single standard that can apply in any different context to organizations of any different size. There is a flip of that, I suppose, which is around generalization and terminology and and language. And you know, that there isn't a standard common use of language and definition in different places. A great example is uh sustainable procurement in Australia, is not really a term that is widely used. People talk here a lot around social procurement, which is to the best of my understanding, similar to sustainable procurement, but narrower, but is uh used in at cross purposes often. And so, you know, SME, local, these definitions are different in different places. And so that I recognise as a as a challenge to the universal applicability of the standard there is, and we've certainly had that we did some work recently to uh adapt the uh global tom system for Australia. And you know, it became very clear. Well, a couple of things became very clear very quickly was that you can't just plonk something which is global into a local context because the local context matters always. And yes, there is a core and a spine of things which will be common and consistent throughout. It's it's that difficulty of dealing with the that local nuance around terminology and and you know, often I've noticed between Australia and the UK they'll do the same thing, but for a slightly different reason, and the reason matters because the reason provides the context and the justification and the way that you can incentivize people to do the thing, not just you know, the thing is done. So yeah, that that is definitely a a challenge. I don't know how you square that circle. I'm I'm sorry about that. I've I've only got a list of problems here, not not solutions. The the guidance standard we've spoken about um in terms of you know, I love that, I love how it connects the dots between disparate, so-called disparate parts of the organization, because you know, uh typically organizations don't preempt ISO 2400 in the way that they have organized the way that they do the work around sustainability or the work around embedding sustainability requirements in procurement. It's evolved over time based on you know how things were, and so having it presented in the way that it does allows you to identify the right stakeholder from the right department and kind of join them together to deliver a similar way I see with TI SFD at the moment, just kind of having having a look at that. It's really interesting uh how that I think will have a similar effect around all social and things, all things inequality, because it's just framing it in a way that I don't think many organizations have framed it quite as completely before. And it it might be a little bit uncomfortable to start with, but it's going to provide that in the same way that ISO 2400 did just the the framework and the model for actually how things are done. And I notice organizations starting to lean, you know, you see jobs advertised and more and more language reflecting the reality of the models that are promoted through ISO 2400. So yeah, love how it it it connects the dots, love the relatively easy to articulate, balanced with that, it is quite dense, it is quite quite a lot. I think that some of the again, because it's a guidance standard, it's open to interpretation, which that flexibility is good to some degree because that you know it allows you to make some progress regardless, and it allows you to apply it to your context regardless, but equally again, depending on the motives of people, which is why that certification standard, if it becomes a certification standard or that's a part of it, that that would need to be tightened up. So there's less room to maneuver and less opportunity for people to try and pass as opposed to try and improve. I'm very much, you know, I recognise there's a need to prove, but I think it's more important to improve. And if you are proving you are improving, fine. But if you're just proving for the sake of proving, you know, these huge parts of the sustainability agenda where it's just become about counting and how we can prove however more accurate we are at counting the thing, as opposed to improving the situation, reducing the impact or improving the the outcomes. And and yeah, I'm I'm keen certainly with the work we're doing around social value in Australia, that that's not the case for for us, I think. I'm waffling now. What are we talking about, Sean?

SPEAKER_00 20:29

That's absolutely fine. It's interesting you should bring up the topic of language and uh uh and uh terminology. We spent four years developing the standard and uh and four years arguing about you know what we should call it. We end up with the expression sustainable procurement, but you're absolutely right, it could be social procurement, ethical procurement, responsible sourcing, that was a good one. When we developed the standard, the expression ESG didn't even exist, but now everybody talks about ESG, they don't talk about sustainability anymore. It becomes a bit painful to you know, you go somewhere in the world and and debate for a week various aspects and details of this standard that it used to drive me nuts. And and I think to your point about we spend so much time defining it and talking about what we should call it and how we measure it, uh, it does get in the way of actually doing things, which is is difficult. But uh the other thing I would say, I mean, I I went on record when the standard was first published, we we made a video and I talked about how extremely painful and bureaucratic the process was in developing the standard, but actually worked because we had people from 40 of different countries all coming together from different cultures, different aspects of their business. And you know, if you a lot of people there were quite a lot of delegations from South America, and their biggest issue was corruption. It was like, well, yeah, you know, climate change can all very well, but actually, you know, what we need to do is is you know to stop people stealing our money, um, and and that's Was a massive, massive issue for them. So it was so different from different parts of the world. So I think we've ended up with something that is robust. But it does take a long time to build that consensus, and you know, and then things move on. So how much time do we spend actually you know resetting the terminology and start to put ESG into everything? Because by the time the standards published, we probably would have moved on to something else.

SPEAKER_02 22:42

This is exactly the problem, right? I mean, this there's um uh a good friend of ours who says, you know, when all is said and done, much more is said than done, and and this this is part of the danger because you know we spend so much time, you know, it it is important that alignment, but but I take your point, it's you know, Golden Gate Bridge, right? By the time you four years of consultation on what the language should be, and it the language has shifted in that period. And so, yes, you've agreed yours, but the whole rest of the world has moved on around you. And so for for me, uh I you know, I don't know how you you do it, but there is a way where that fluidity of language and terminology and definitions needs to be acknowledged whilst focusing on the doing, because you know, what whatever you call it, the same things need to be done, the the same action needs to be taken. And it is definitely upsetting to me when, you know, because it if especially, you know, a lot of the work I'm doing at the moment is around social outcomes, and I appreciate people are equally passionate about all sustainability outcomes, but you know, there there are real people's lives at the end of this. And while we're debating and and and aligning definitions and all that sort of thing, there are individuals who aren't getting the employment opportunity that they might otherwise have got. There are businesses who aren't getting spend that they might otherwise have got, and there are communities that aren't getting the positive impact that they might otherwise have got. And it's just with that in the back of my mind, I'm very, very motivated to keep the focus on outcomes, outcomes, outcomes. And um I'm I'm speaking at a conference tomorrow and I'm very mindful of the focus on measurement and counting and quite how excited everybody is about that. But I I I'm gonna have to, you know, state my case for we've got to remember what this is all about, right? And we didn't all start this, we didn't all get into this because we wanted to make a difference to the numbers. And you know, I I you know the my proudest achievement is you know, in making my data ever more increasingly accurate. It's about the impact and the stories and the people and that's it behind that. So so for me, I I hope that's something that we get out of the next iteration of the ISO standard is is an absolute focus on the outcomes, whilst acknowledging the fluidity of of how language and definition is used and applied over space, let alone over time. And yet you know, even in Australia, we've when we did the work around uh adapting the toms, we have unique issues out here. Things around First Nations communities and Aboriginal Torres Strait Islander people in Australia and Marian Pacifica people in in New Zealand is just not something organizations in you know Europe or anywhere else in the world have uh even begun to think about. And so those things have to be reflected back in the local context, otherwise it's perceived to be you know irrelevant, it doesn't fit, it's from somewhere else. And so again, a big challenge for ISO 2400 is how do you make it locally context specific and a feeling that it's homegrown and relevant to our context whilst maintaining that kind of global applicability. Not not easy, and I see why it took you four years to start with.

SPEAKER_00 25:46

So yes, it's interesting because obviously what we've tried to do with the SAT and something that you know if we go back to uh even back to flexible framework and BS8903 before it is to encourage people to think about context because it is about geography, it is about the specific nature of your business. And and you know, I think bringing up the the whole issue of First Nations in the part of the world that you work in now is something that really you know doesn't exist in Europe. I do remember a number of years ago when I was working on the London 21 Olympics, and we had a small communications team that I was working with, and it was uh a young woman from Australia. Um she came from a very small town somewhere in Australia and came to London to work, and she actually asked me a genuinely innocent question: what do you call the indigenous people here? Yeah, right. Yeah, that would because it was so ingrained in what in her culture and what she thought. It was you know, a lot of issues about indigenous people. But uh, yeah, actually asked me what do we call the indigenous people in the UK? Okay, interesting question.

SPEAKER_02 27:01

It's been such a fascinating experience coming over here, but partly because you know, there's a lot of assumptions that I made about things that I know based on the experience that I had in the UK, right? How how could I know anything else? And then you come here and and yeah, you get a lesson because culturally the context is very different, particularly, you know, the whole fairness, inclusion, and respects agenda is so totally different out here. And I I came out here thinking I had an understanding of race. I've worked in and around the race agenda as part of my kind of experience for for for lots and lots of years. I thought I understood it, and then you come here with the introduction of indigenous culture, 65,000 years of Aboriginal, Tory Strait Islander people in this country, you know, white Australia policy, uh stolen generation, all of that. It's like, okay, right, this is this is very different. You can't even begin to think, you know, my experience from the UK can can even understand, let alone help with in in that context. And so, yeah, it's been an absolute education and a and a privilege over the last couple of years just getting to know that kind of Australian perspective, not just the Aboriginal Torres Strait Islander perspective and not just the Marian Pacifica perspective, but just that broader Australian cultural perspective and the fact that you know some things are similar, but a lot of things are different. And thankfully for me, one of the things that is similar is the emergence of the public sector buying criteria and the clarification of public sector buying criteria, which means that we don't need the benefit of a Social Value Act or something like that necessarily, because there's already, I think, enough of a policy framework in Australia to incentivize through procurement suppliers to have to compete on delivering more good for society.

SPEAKER_00 28:51

And I if I can pick up on a point that you made about measurement, and it and it is again one of these dilemmas about you know, we can get obsessed by spending far too much time measuring things and not actually doing things. But then to your your very first point when we started this conversation about well, yeah, that there is procurement is a potentially massive lever for change, and by you know, by including sustainability aspects or ESGO, whatever you want to call it, into the whole procurement process with day one or into the contracts, etc., does force the issue because I I think, as we both know, just trusting and expecting organizations to do the right thing is not going to happen because in many cases they don't know what the right thing is to do and they don't know how to do it. So there is a need for uh some form of contractual structure that says we we expect you to do this, and therefore there needs to be some way of measuring and making it happen. And certainly, you know, we were both in the construction industry in the UK 10-15 years ago when you know sustainability requirements would go into the contract and the you know the contractor would write a beautiful exposition on how wonderful they are on sustainability, sometimes written by a consultant that they sack when they win the job, and then they win the job and go back to doing exactly what they were doing before because they know the client will never check. You know, you know, you used to work for a contractor, and I used to work for various client organizations, and we kind of knew that happened. So having that requirement to measure, and back to your point about prove and improve, it kind of needs to be both, so that there does need to be aspects of performance measurement and management that come into play because we're we're driving things through a contractual requirement.

SPEAKER_02 30:55

Just on the contract management piece, it if there is no device for holding suppliers accountable for the commitments that they've made at bid bid stage, they won't get delivered. You know, what why why would they, why should they? And so I I think it was on Crossrail. So it was uh way way I I I love how I'm kind of showing my age. I I used to be a young person, Sean. I used to have potential, all that sort of thing. Now I'm uh I don't know what I am anyway. Crossrail was the first time I think we'd seen the requirement shift from procurement into contract management. And I kind of remember the process. There was a thing where you know, we write the bid, we say the things, and you know, we move on to the next bid, and and then with Crossrail, there was this monitoring requirement form that that came out within three months of of contract start, and it was you know, I'm I'm I'm sure it's been a I'm sure it's a mistake, nothing will happen with it. We'll just ignore that. And then, you know, there was a uh three months later another form and an email and a requirement that somebody will be coming out to to check this stuff, and there was a penny drop. This doesn't look like it's going away. It's behavior, right? How you incentivize behavior is that consistent uh and accountability. And it was only through Crossrail's persistent and consistent, repeated requirement for us to provide evidence that actually in the end people started putting resource in. And I remember at the time there was a whole wave of different organizations who suddenly started recruiting responsible, recruit responsible procurement managers because that was the language that Crossrail were using at the time. And so every time I saw a job for a responsible procurement manager, I knew that is the power of procurement from Crossrail incentivizing their supply chain to invest in resources that are gonna deliver better outcomes for their stakeholders and society and everybody else. And so, you know, again for me, another example of of how it works, but it's you have to have that contract management. You can't just have the the promise. So many organizations I it just doesn't make sense to me. If you're gonna go to the effort of clarifying your requirements and embedding it into your procurement process and, you know, ensuring you're compliant with the way how you score it, why on earth wouldn't you do the easy last bit, which is just making sure that actually your suppliers deliver against it and then recognizing that in the next procurement exercise? Because there's also an issue of you know, when suppliers aren't held accountable, they can be rewarded and continually rewarded again and again with more and more contracts, because actually we don't have the data or the understanding of whether or not they're helping us to deliver against that. And so now in the UK with things like Social Value Act and minimum 10%, and in Australia we're seeing minimum 30, well not minimum, but we're seeing kind of up 30% for just social requirements, let alone the environmental stuff. It's it's game-changing because that's not marginal, that is very material to, and that drives organizations to invest in the resources that they might not otherwise do. I can't even remember your question, Sean. So I I hope the answer is somewhere near.

SPEAKER_00 33:58

No, I think it certainly is, and your experience and description across Rome was very similar uh to my experience on London 2012, where the ODA had those requirements, and uh yes, suppliers were required to report monthly against their against their progress against the environmental and social objectives, and some of the things that you uh you mentioned, you know, local procurement and all of those things were all in there, and and it was a shock to contractors that they were actually expecting to rock up and provide some evidence. I guess that leads me on to another topic close to my heart, which I know is close to yours as well. One of the learning points that came out of those projects, which are pretty much going on at the same time, was the depth and variety of the supply chain in the construction sector, but it's true of other sectors as well. And the fact that if you put some stuff in a contract and then really start to lean on the supplier to deliver it, the effect on that supply chain is that the the lower tiers of the supply chain are not competent to do so. And and that takes us into the whole topic of uh of supply development, which is why we we started the school in 2012. And I know you've been quite a supporter of that and uh and doing a lot of work to uh implement it in Australia. Would you like to talk a little bit about supply development?

SPEAKER_02 35:20

Yeah, I mean it it's it's fascinating, right? You've got you know, you what you whatch the news, and there's there's no end of you know global conferences and and major speeches and international commitments to you know reduce this and and increase the other. And those global commitments translate into government commitments at a national, local, federal, state level, whatever, and they come into corporate policies, and we all the way up the line, we're all talking about how we're gonna do this stuff. But actually, when it's you know organizations like Ventia, for example, you know, we supply into the public sector, something like 80% of our customers are public sector customers, and I've mentioned you know, 30% of the marks to win that work is you know around this social and environmental stuff, but actually there's another 80%, and that's 80% of what we do actually isn't delivered by us, it's delivered by our supply chain, and that's the case for most main contractors. And the 80% delivered by our supply chain, most of them are SMEs, and SMEs typically don't have um the time, the capacity, the wherewithal, the inclination, the training to budget, or anything else to keep up, let alone build the capability to deliver against all of these policy commitments that we've all made. And so, you know, in my view, it's an absolute market failure that we've got all of these global government corporate commitments to deliver this stuff that is built on and predicated on the capability of an SME supply chain, it's an absolute market failure. And so the supply chain sustainability school, in my view, is essential. And so it blows my mind that there aren't more people who understand the need to build capability because, as you say, yeah, you can clarify the requirement, you can increase the expectation on the supply chain, and they can possibly deliver. But if you don't build the capability within the supply chain, well, first of all, where's that capability kind of uplift come from? But if you don't build the capability within the supply chain, you're working with an ever smaller number of suppliers who can do sustainability, and that certainly is not gonna drive competition. That's certainly not gonna drive value, that's not gonna drive innovation. We need to make sure there are more organizations who can compete. So, yeah, for me, absolutely essential because I know unless we can identify suppliers who can deliver and unless we can partner with suppliers who can deliver against sustainability outcomes, we're not gonna continue to win work. It's really super clear. The the challenge for for government at the moment is only on how it discriminates between you know one bid or another, not its intention to reward um organizations who can deliver these outcomes. And if we're all dependent on our supply chain to do that, then there's a massive, massive hole. So, yeah, I'm a huge fan of the supply chain sustainability school. I think not just for the fact that it provides sustainability knowledge for non-sustainability people and it removes cost as a barrier, not just because it's buyers talking to suppliers about the things that it wants its supply chain to know. So it's super relevant knowledge. There's loads of sustainability talk shops, there's loads of places that I go and people talk about carbon, whereas in the school it's a talk and do shop. So the school they talk about stuff, the main contractors get around a table and we all talk about stuff and how we'd like things to be, and then the school goes off and does it and then brings it back to the contractors. So love the model. But that's the other reason I I love the school, is not just the the learning outcomes, it's the collaboration space because actually what I find is I'm thinking a lot at the moment about this concept of collective intent, and you know, that there is no single organization, government or country who can solve the challenges of sustainability by themselves. There is nothing to be gained by competing. We have to collaborate. 80% of our customers, public sector customers, we have to collaborate with our customers. 80% of our deliveries, our supply chain, we have to collaborate with our supply chain. We have to collaborate across industry. We've got lots of organizations who've all got their own sustainability personal, their own carbon person working in a cupboard within their organization, um getting extremely passionate, but working with lots of people who don't understand what they're talking about. And so what the school does is it provides an environment to release all of those people who've been locked in a cupboard, to sit alongside other people who've been locked in a cupboard, and the energy that that creates, I've seen create magic. And the things that have come out of the school, things like the um conversations around the common assessment standard, PAS 91 started in supply chain sustainability school, as I remember. Conversations around the common plant uh uh standards uh in in the UK came out of, I remember the approach around modern slavery, the modern slavery act came out just after, uh not long after the school started. And there was a situation where you've got an entire industry with hundreds of contractors who are about to all run away individually to develop their own individual approach, to first of all learn what is this new legislation, then develop their own individual approaches to, then inflict their individual approaches on their shared supply chain in thousands of different ways with lots of different um uh uh kind of and so the view was actually we're already round the table talking about our shared challenges. How about we solve or solve, how about we approach modern slavery together? And so we started the modern slavery working group and we we developed shared materials that that had the benefit of everybody's input and certainly was better than anything I think I could have developed or anybody else could have developed individually, and we shared that resource, and so yeah, I the the school is an amazing space for collaboration, and I'm really excited about the relaunch in in Australia because we're really just getting started with that. There's some real energy pent up a lot of people who I think are ready to walk into the space to to collaborate and and to to use the um honest broker of the school to get us all around the table and and in a non kind of competing environment.

SPEAKER_00 41:34

So for you, that's that relaunch is is going well in Australia, right? Are we pushing an open door or are there still challenges?

SPEAKER_02 41:44

Yeah, I think I mean again, you know, it's it's it's different. And I I think what's what's great with the relaunch of the school is that um the school have got people on the ground here. It matters. You you you can't do this locally. And we did the the launch events in in February, and and the energy that we got at each of those events and the enthusiasm and the willingness for people to participate and to get involved and to collaborate and do stuff, that whole that collective intent thing about you know, if we can get people moving in the same direction. So, yeah, I'm I'm really excited. There's a lot of people having conversations about becoming partners, there's a lot of people starting to use the school. I think the the challenge I think with with the school is probably its maturity, because in the UK the market grew with the school, and so everybody learned as they went. Whereas it's you know, 10-12 years old now, it's a mature model, it's got a really sophisticated delivery to it, and the benefits are broad, but actually, you know, introducing it to people who never who weren't on that journey, who didn't understand where it started, I think is interesting because there's so much to it and it's such a complex offer that actually I think there's something about just going back to basics with people and you know fundamentally the school fills a space around which we were already going to occupy most organizations, we're probably gonna develop, pay for e-learning modules around sustainability something or another, next year. The average cost in Australian dollars for developing an e-learning module is about $15,000. And so membership for the school at the or sorry, partnership for the school at the lowest level is $30,000. And so for the price of two e-learning modules, I've already got 16 brand new e-learning modules back from um the supply chain sustainability school. And so I've already got better value, and I've got access to another 120-odd back catalogue, but I also didn't have, and I've got the ability to shape the next 16 e-learning modules around which I can collaborate with Blue Scope, John Holland Group, and Daycorp to come up with something which is genuinely you know industry class and industry leading and and industry impactful. So, you know, what was not to love about the school? It's free to to members. We've reduced the the barriers. I mean, we have upset some people with the school, obviously, because there were some consultants who were making money out of sharing this knowledge, and so you know, I do. feel some sympathy because I I respect their their experience and the job that they're trying to do. But the it's it's too big. It's too big and what's at stake is too great. And we cannot have cost as a barrier to delivering the outcomes that we're committed to delivering because everything is at stake, right? Well you know and how are we doing so far? How are we doing in terms of climate change? How are we doing in terms of social justice? There's no time to waste and so um you know chop chop.

SPEAKER_00 44:43

Yeah it's an interesting point I there is still room for consultants of course there is you know but I I think that's you know where where things need to change and the the paradigm needs to shift to an extent and and certainly everywhere we've been with the school there's always been some organisations that see us as competition and a threat and that's you know that's the case everywhere in the world. And certainly um you know you talk about context and different contexts and it seems to me like we um you know the the re launch of the school in Australia seems to be done pretty well and people are quite enthusiastic with a lot of energy around it. In the United States it's a very different story it's actually quite hard work but we'll get there we will get there because there is a a collective will of large corporations you know aside from the uh you know the current political regime which I don't really want to talk too much about but it it does make it hard it it's not impossible it but it just feels like there's a a a small relatively small group of dedicated people trying to make it happen um but actually finding a lot of resistance right now but I it's it's why I come back to you know the the one of the first things I ever learnt from you Sean which is if sustainable procurement costs you money you're doing it wrong i'm I'm not saying in every instance you know on on every day you will save money but overall on balance it is about saving money which part of using less stuff or throwing less stuff away costs you more money which which part of building more positive relations with local communities makes it more difficult to hire local people and local supply chains it's it's so for me there's a thing about just constantly reminding people I had two conversations in the last couple of weeks that um have reminded me of the need for this one one was a project that I went to visit who was telling me how great project great work but really busy right and just didn't have have time to to think too much about sustainability.

SPEAKER_02 46:43

And so they spent the entire time telling me about the work they were doing around whole life cost efficiency and extending life of product and and all of this but with without any awareness that they were delivering all of these sustainability outcomes because they were just doing it because it was for efficiency for productivity for cost saving and the fact that they we would have recommended the exact same activity for uh sustainability and carbon outcomes was and so for me that's the thing about we're so busy trying to convince people of what we know sometimes we just need to understand what's already important to our people and position sustainability as being another way to help them to achieve the thing they're already trying to do not something else on top of what they're trying to do. I had another conversation which blew my mind around an organization and they were talking about how they were considering doing less around sustainable procurement because they had to prioritize saving money. Yeah and so the you know we can't assume that everybody gets those things right and because if we keep talking about counting for the sake of counting and sustainability for the sake of sustainability because we know it's the right thing to do, it's not enough. You know what's that book the iceberg is melting it's it's not enough to be right right we've got to be able to bring people with us and to do that we've got to understand what's important to them. Sell the pen, what's that thing? You can't sell anything to anybody until you know what they want to buy. And if we're dealing with a bunch of stakeholders who have been really clear over the years they're concerned about cost, about risk, about work winning around di-da we know that right and so it's yes we love people to be persuaded by the things we're persuaded by and to be converts to the things that we're we find important but I'm pretty sure I'm never going to be persuaded by the arguments to become a financial controller. And so you know with respect I understand that there's lots of people who might not want to become passionate about the things I'm passionate about. What's important is can I get people to change their behavior can I get the systems to change to deliver the outcomes that we want to deliver and so if I need to change my language to do that or change how I position to do that I think it's really important. I don't think we should insist on everybody getting it.

SPEAKER_00 48:57

I think that's a super important point actually and I that takes me back to when I very first I getting involved in sustainable procurement in the 90s and this is at a time when the environment department or whatever it was called in a large organization was acting like a little internal NGO and just running around trying to make everybody feel guilty and and it didn't work and it it was you know there was a very kind of patronizing attitude to these people that were were well meaning and I remember when I first started to develop a a sustainable procurement strategy it was all about engaging with those people and asking them the question what do you want my supply chain to actually do and it took a year to to actually end up with a series of sustainability requirements against specific impacts that you know everybody does these days. But it was the the attitude of the people very well meaning people from the environment department could not get out of the sort of broken record of well we must save the planet we must save the you know the birdies and the fishies and we've got to you know preserve the trees and yeah but but that's not you know I can't ask a supplier to save the planet what do you want my supplier to actually really do uh and then they wave this questionnaire at me you know well it's 14 pages and we want you to fill this want to fill this form in well then what what are we going to do with that information well you know you you need to add five percent of your evaluation criteria's that was not going to make any difference you know you we're still not asking the supplier to do anything we we're just asking them to fill in yet another form and then look at the form and wonder what to do with it and put it in a file somewhere and tick the box and it's done that that's you know you you have to when you're dealing with suppliers you need to be very clear about what you want them to do and I thankfully the world has moved on a bit in the last 30 years. And uh and people do get that but you're right you we can't be in a position where we we just expect people to do the right thing it's it's about framing it in the context of of what they do and what they understand and what the business objectives are.

SPEAKER_02 51:22

No no and and and I think just for for me just never slipping back just always remembering that the need to make the case and not assuming that you know everybody gets it just because it's the right thing to do, right? It's like no we always have to make you know again the page one line one lesson one of sustainability book is social, environmental and economic and if you can't balance the three of those things then it is not sustainable. And so for me the economic has always been as important as part of you know making the case and understanding the economic benefit of the thing that you're doing. And it's always been much easier to make the case for a sustainability initiative if it's cost neutral andor cost saving or or cost or or provides a a revenue stream. And you know I despair sometimes there's a load of circular economy initiatives that I've come across in my career and you know they come up and they say oh you know we've got this amazing circular economy solution and that thing that you were going to throw away will take it away for you and we'll charge you ever so slightly less than it would have cost you to throw it away and and maybe it works, maybe it doesn't maybe we do it for a little while then it gets too much and you know we don't want that mess and it's too inconvenient and we don't do it. And I've never seen them be really sustainable or hit a tipping point. And for me partly is because I think not only should they be free, I think those suppliers should be paying main contractors for what otherwise would be their raw material, right? So I'm I'm cut can you give me that thing you know and and you you'll pay me to for you to give me my my raw material. It's a wonderful business model. And every time I challenge one of those suppliers they always have this nervous laugh because they kind of know the game's up but my my serious point is if we want to get to a tipping point we've got to incentivize the right behaviors and what I know is if I can't incentivize the guys and the girls that are on a project to do the thing it's going to be really difficult.

SPEAKER_00 53:13

I think it's a really good point about circular economy and um I recorded a webinar about a year and a half ago and I'm desperately trying to remember the name of the man that I spoke to but it was a guy in Canada and they had a completely inclusive model for recovering um precious metals from catalytic converters and and it was an amazing business. It was they the the company in Canada um actually extracted the precious metals from the from the cats but it was part of an entire integrated value chain from um from truck supplies in in the States and mostly commercial vehicles and then through to smelters and then through to the people that actually sold the um the the metal that came out of these these catalytic converters but it was a completely integrated business model it wasn't a traditional supply chain uh in any or reverse supply chain if you like in any way shape or form and I was really impressed by the way that they totally rethought the way they do business and I I think that's um the the point that you're making in that yeah just you know a take back scheme doesn't really hack it as you say work for a while and then people get fed up with it.

SPEAKER_02 54:34

It's that collective intent thing uh again right you can't you know what what you've described cannot happen with an individual organization it that that can only happen when a number of organizations move together for a common outcome and so you know for me the more of that that that we can see that we can encourage the the better because we just can't do it alone right it just it it it it drives me mad everybody accepting awards and patting themselves on the back for the stuff that we have done and it's it's it's always again I suppose it's why I love the supply chain sustainability school because it acknowledges that we can't do it alone that we do need to come together and it provides the space to do that. So uh yeah.

SPEAKER_00 55:14

Anyway we've we've ranged around a lot of subjects I suppose we ought to we ought to close at some point. Final question then Aaron that a lot of our audience for isot2400.org is very global um lots of people around the world listen to our podcasts and engage with our website um particularly in places like India um which um you know the this this uh the site is very very popular there we also have a lot of people now where organizations kind of get the idea they need to do sustainable procurement um so they give the job to some poor sod in the organization um to say right oh you you're doing next year you're doing sustainable procurement off you go what advice would you give to somebody who's starting on their sustainable procurement journey as many people are around the world I'm asked this question uh a little bit uh uh especially recently and I typically have kind of two two answers that the first is the start with why I think right it's just just to be uh clear with yourself and with your leadership team about why you are wanting to do what it is that you are trying to do because the why matters the why matters to how you shape what you're trying to do and it matters to ensuring you have a sustainable ongoing mandate for the thing that you're trying to do.

SPEAKER_02 56:40

So so in most conversations I have is really important just to understand wh why they are trying to do it. And often reasons aren't what you think or they're multi-layered. And so if you clarify that you've got the opportunity to build a solution around that and bringing your stakeholders with you and managing their expectations along the way. And so definitely that um the the this and as part of that there's a thing about understanding who your stakeholders are identifying what's important to them and then aligning the sustainability objectives to their outcomes and that's back to the conversation we're having earlier on I don't want to convince people of something extra that they need to do. I want to understand how I can help them solve the problems that they've got. So if you want to save money I want to save money here's 15 new ways that I think sustainability can help you to do that. You want to cut you wanna um win more work I want to win more work. Here's three new ways that sustainability can do that not here's three things I want you to do for sustainability and here's five additional things I want you to do over here for sustainability. So there's a a positioning thing and a bring in people with you thing. But then ultimately I would say ISO 2400 and I I appreciate you know you would say that wouldn't you because I'm I'm on these podcasts but it it happens to be true. And the reason I I say and you know I please you know inspect the witness speak to people that I know the the the reason that I say ISO 2400 is precisely because it is a guidance standard. And so it is super safe to uh benchmark yourself against internationally recognized best practice and then decide for yourself what is appropriate, relevant and proportionate and authentic to your organization in terms of the actions you want to take as a result of that self-assessment. I think I would not be concerned at all about certification although I recognise the value of uh achieving certification but I think certainly when you're starting out your objective should not be or I hope your objective wouldn't be to get a certificate your objective I hope would be to deliver to use the power of procurement to incentivize my supply chain to deliver better outcomes for society. I hope something around those lines there might be something around you know evidence compliance ev evidence progress evidence something so yeah I I would tell them to do ISO 2400 because it's the great place to start and and it allows you to kind of grow with it through the growth of your organization and the maturity of of your approach around sustainable procurement. So yeah start with why understand and clarify and get consensus around why you want to do what you want to do and be clear on what's important to your stakeholders and how sustainable procurement or your approach to sustainable procurement will deliver against what's important to your stakeholders and do ISO 2400. In fact I think there's even a very helpful uh self-assessment version of ISO 2400 that can be found on a very useful website called ISO2400.org. And so yeah it's just just a great way to get a quick idea of where are we and then start having conversations with your stakeholders about what do we want to do as a result of this. Because there might be things in the standard that you might be required to do to pass but actually aren't right for you in this moment or in this context for whatever reason. And what I'm afraid of with the pass fail is obviously if you don't do anything until you're ready to pass, then we all lose. And so yeah do do something do ISO 2400.

SPEAKER_00 1:00:15

Aaron it's been a pleasure as always thanks very much for uh for sharing some of your thoughts on the standard and uh and various other things that we talked about and so we we look forward to hearing from you again. This is one as I said of a series of podcasts about ISO 2400 we're trying to get as many voices from around the world as we can uh with people like Aaron that are real experience in actually using the standard so thank you very much um hope our audience enjoyed what we've had to say today I'm sure they will thank you thanks Sean