ISO 20400:2017 is a globally recognized guideline for sustainable procurement, designed to be applied across all organizational types and sizes. It aims to embed sustainability considerations into procurement policies, processes, and strategies—linking purchasing decisions directly to environmental, social, and governance (ESG) goals. ISO 20400 emphasizes the transformative role that procurement plays in shaping sustainable value chains and advancing sustainable economies.

What makes ISO 20400 particularly well-suited as the principal evaluation framework for supplier selection under the SSA Program (Sustainability Services & Supply Chains Alliance), initiated by Sustainism Initiatives, is its inherent compatibility with national green taxonomies—such as the Thailand Taxonomy. These taxonomies define environmentally sustainable economic activities and align closely with the global Sustainable Development Goals (SDGs). Leveraging ISO 20400 as a core evaluation framework allows for the rigorous screening of micro, small, and medium-sized suppliers against international ESG standards, mirroring the compliance expectations of public institutions and intergovernmental organizations.

ISO 20400’s strengths go beyond ESG principles. It provides a strategic approach for organizational transition through mechanisms such as the implementation of responsible procurement policies, life cycle cost (LCC) assessments, respect for human rights, and multi-stakeholder engagement. These dimensions respond directly to the expectations of global business partners—particularly publicly listed companies and institutional investors who demand transparent, auditable, and sustainability-aligned supply chains.

At the implementation level of the SSA Program—operated by Sustainism Initiatives under the endorsement of AFMA (an intergovernmental body established in partnership with FAO of the United Nations)—ISO 20400 serves as the central tool for assessing supplier readiness for global recognition. It forms the evaluative backbone for SMEs and vendors seeking to participate in high-level platforms such as the UN Climate Action Forum (CAF), and is integrated with the verification systems of accredited national auditing agencies such as MASCI in Thailand.

From an economic mechanism perspective, if the selection of sustainable supply chains were to be embedded in national fiscal policy—through, for instance, double tax deductions (200%) or green tax incentives for companies that procure from ISO 20400- and taxonomy-aligned suppliers—it would significantly accelerate the transition to a green economy without reliance on coercive regulation. This approach would unlock private sector action through positive incentives rather than mandatory compliance alone.

Therefore, policy recommendations grounded in ISO 20400 and aligned with national taxonomies represent a structural strategy of substantial influence. They would redefine national procurement standards, enhance access to ESG-linked finance, and boost systemic competitiveness on the global stage. If MSMEs are systematically supported to enter this framework through the SSA platform and earn international recognition, the country’s entire economic value chain would be elevated in a sustainable and inclusive way.

Ultimately, if government tax policies and procurement mandates are integrated with sustainability assessment systems—such as ISO 20400 and certifications under SSA, recognized by United Nations platforms—the world will move more decisively toward a hopeful future. The SDGs will become increasingly attainable, and Thailand will be positioned to play a bold and respected policy leadership role in the international community.

Sustainable Procurement for SMEs : A Strategic Guide to Enter Global Value Chains

ISO 20400:2017 is the international guidance standard for sustainable procurement, developed to integrate environmental, social, and governance (ESG) considerations into procurement strategies, policies, and operational processes. Unlike certifiable management standards, ISO 20400 serves as a universal framework applicable to all organizations—regardless of size or sector—seeking to embed sustainability throughout their supply chains.

For Small and Medium Enterprises (SMEs) aspiring to become suppliers or service providers to major corporations aligned with ISO 20400, this framework provides a clear roadmap for demonstrating readiness, responsibility, and resilience in a rapidly transforming global market.

Section 1 : Foundational Principles

ISO 20400 establishes fundamental principles that organizations must uphold throughout procurement processes:

• Accountability – Taking responsibility for the social and environmental impacts of procurement decisions.
• Transparency – Ensuring openness and traceability across the supply chain.
• Ethical Behaviour – Upholding integrity, fairness, and anti-corruption standards.
• Respect for Human Rights – Safeguarding labour rights and fair treatment across operations.
• Innovation and Continuous Improvement – Committing to adaptive practices and ESG innovation.
• Focus on Organizational Needs – Aligning procurement with strategic sustainability goals.
• Integration of ESG and SDGs – Embedding the UN Sustainable Development Goals into procurement priorities.

Key Indicators for SMEs

• A clear and accessible code of ethics or supplier conduct.
• Documentation of human rights due diligence.
• Grievance mechanisms for stakeholders or whistleblower protocols.
• At least one published ESG or SDG-aligned objective relevant to core business activities.

Section 2 : Policy and Strategy

To operationalize sustainable procurement, an SME must establish clear policies and strategies aligned with ESG goals:

• A written Sustainable Procurement Policy endorsed by leadership.
• Evidence of alignment between procurement policy and the UN SDGs or ESG frameworks.
• Integration of sustainability priorities into procurement planning and supplier selection.

Key Indicators for SMEs

• Published sustainability or environmental/social policies (available in local language and/or English).
• Documented action plans or projects derived from the policy.
• Evidence of policy communication with partners or clients (emails, RFPs, TORs).
• Appointment of designated personnel for sustainability oversight.

Section 3 : Enablers

Sustainable procurement requires systems and structures to enable effective implementation:

• Risk identification and assessment related to ESG issues across the supply chain.
• Sustainable supplier selection criteria embedded in procurement practices.
• Internal monitoring, evaluation, and reporting systems.
• Engagement of stakeholders, including employees, suppliers, and local communities.

Key Indicators for SMEs

• Internal tools or risk assessment templates addressing environmental and labour factors.
• ESG risk reports or audit summaries.
• Documentation of internal sustainability training, supplier engagement, or ESG meetings.
• Participation in stakeholder consultation or collaborative initiatives.

Section 4 : Procurement Process

ISO 20400 provides guidance across the entire procurement lifecycle to ensure ESG integration:

• Needs analysis incorporating sustainability requirements.
• Sustainable technical specifications and terms of reference (TOR).
• Supplier selection and evaluation with ESG criteria.
• Performance monitoring and contract management.
• Traceability of inputs, labour, and environmental impacts across the supply chain.

Key Indicators for SMEs

• TORs or specifications with sustainability clauses.
• Documentation of supplier assessments or audits.
• ESG performance reports submitted to clients (progress updates, environmental data).
• Internal systems for traceability (material origin, subcontractor transparency, etc.)

Strategic Recommendations for SMEs Entering Sustainable Supply Chains

• Begin by developing concise ESG or ethical policies—even basic statements are valuable.
• Include ESG impact or SDG alignment in all client proposals.
• Measure key sustainability metrics (e.g., CO₂ emissions, energy usage, employment impact).
• Consider joining third-party evaluations (e.g., SSA, GRI-aligned frameworks, MASCI audits).
• Proactively communicate your sustainability journey to buyers and industry networks.

This guidance aligns with the United Nations’ emphasis on inclusive supply chains, responsible production, and sustainable economic growth (SDG 8, 9, 12, 17). SMEs that take proactive steps to align with ISO 20400 not only position themselves as credible suppliers to ESG-driven corporations, but also unlock opportunities in government procurement, ESG finance, and international partnerships.

If you require a self-assessment checklist, proposal templates, or a supplier ESG profile in English for submission to global clients, we are ready to assist further.