Insights with Impact webinar:  Supercharging Social Procurement

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Supercharging Social Procurement: How to engage social enterprises putting people and planet first

Webinar Summary & Key Takeaways

Overview of the Webinar 

The "Supercharging Social Procurement" webinar, hosted by givvable on October 30, 2024, focused on the benefits, challenges, and standards in social procurement. It gathered insights from industry experts and representatives from social enterprises, including Green Fox and TradeMutt, discussing how businesses can drive social impact through their procurement practices.

Introduction to Social Procurement and Social Enterprises 

What is Social Procurement? Social procurement enables organizations to use their buying power to generate social value beyond the cost of goods and services. This can include engaging with social enterprises, disability enterprises, and diverse suppliers to create measurable social and environmental impact.

Defining Social Enterprises. Social enterprises are businesses designed to address social and environmental challenges while reinvesting the majority of their profits into their mission. They are distinct from traditional businesses due to their commitment to people and planet over private profit.

Importance in Australia. There are over 12,000 social enterprises in Australia contributing $21.3 billion annually to the economy and employing over 200,000 people. This sector has grown to represent approximately 1% of Australia’s GDP and provides as many jobs as the mining industry, showcasing the sector's significant impact.

Benefits of Social Procurement 

For Buyers: 

• Brand Reputation and Employee Engagement: Aligning with social procurement can enhance brand reputation, increase employee engagement, and support ESG targets.
• Risk Mitigation and Innovation: Social enterprises are known for their innovation, adaptability and resilience, providing essential services even during crises, such as COVID-19.
• Compliance with ESG Regulations: Increasing government regulations require businesses to demonstrate social and environmental responsibility, and social procurement helps meet these criteria.

For Social Enterprises: 

• Economic Growth and Community Impact: Increased procurement helps social enterprises grow their footprint and brand recognition, while contributing to their mission and benefiting communities.
• Sustainability and Visibility: Social enterprises gain legitimacy and visibility, leading to potential partnerships and contracts with larger organizations.

People and Planet First (PPF): The New Global Standard for Social Enterprises 

Background and Purpose. The People and Planet First standard was introduced to establish a global definition for social enterprises, ensuring consistency and credibility. People and Planet First provides a transparent verification system for social enterprises, emphasizing their commitment to social or environmental goals.

Verification Process 

• Steps to Verification: Social enterprises create a profile on the Good Market platform, pay a verification fee (~130 AUD), and complete a verification form demonstrating their compliance with five criteria.
• Verification Criteria: exists to solve social or environmental issues, prioritizes impact over profit, maintains a self-sustaining revenue model, reinvests majority of surplus towards its purpose, and chooses legal and financing structures that protect purpose long-term.

Impact of the Standard. People and Planet First verification offers global recognition, making it easier for enterprises to connect with buyers across borders. The standard also aids in reducing “social washing” by allowing community members to flag organizations for false claims, ensuring only legitimate social enterprises are verified.

Case Studies: Social Enterprises in Action 

TradeMutt (Workwear). TradeMutt provides high-visibility workwear designed to facilitate conversations around mental health. Their model includes donating 50% of profits to a mental health charity, with an emphasis on accessibility and community impact. The company has leveraged social procurement to scale their business and access corporate and government contracts.

Green Fox Studio (Creative Services). Green Fox Studio, a creative agency founded by former corporate professionals, operates as a social enterprise by employing people with barriers to employment, particularly those in or affected by the justice system. Their focus on quality and competitive pricing allows them to compete in the mainstream market, with their social mission serving as an additional value proposition for clients.

Practical Insights for Implementing Social Procurement 

Establishing a Social Procurement Framework 

1. Leadership and Accountability: Start by gaining buy-in from senior leadership and establishing accountability for implementing social procurement.
2. Set Measurable Targets: Create clear social procurement objectives and track progress to ensure the framework's success.
3. Incorporate Flexibility: Include diverse categories within social procurement to meet ESG goals, such as partnering with Indigenous-owned businesses, women-led enterprises, and verified or certified social enterprise suppliers.

Supporting and Selecting Social Enterprises 

• Research and Build Relationships: Select social enterprises that align with the organization’s needs and mission. Building trust over time helps establish mutually beneficial partnerships.
• Avoid Siloed Approaches: Broaden social procurement frameworks to recognize enterprises across various social impact areas, reducing the risk of overly restrictive criteria.

givvable’s Tools for Supporting Social Procurement 

givvable has several tools to assist organizations in integrating social procurement effectively:

1. VET Tool: Helps organizations find social enterprises with verified credentials, including People and Planet First verified enterprises.
2. SCREEN Tool: Identifies existing social and diverse suppliers in an organization’s supply chain, uncovering potential social procurement partners.
3. ENGAGE Tool: Allows suppliers to self-register and showcase their social and sustainable credentials for improved visibility among potential buyers.

Addressing Challenges: Policy and Avoiding Social Washing 

Importance of Policy and Advocacy. Policy and advocacy are vital to advancing social procurement, especially in government spending. Initiatives like the Indigenous Procurement Policy (IPP) in Australia illustrate how well-crafted policies can drive uptake and support social procurement goals.

Preventing Social Washing. To avoid social washing (false claims about social or environmental impact), People and Planet First employs a community moderation model where claims are publicly available and can be flagged for review. This ensures only genuinely impactful organizations receive recognition, maintaining the integrity of social procurement.

Conclusion 

The "Supercharging Social Procurement" webinar highlighted the transformative potential of social procurement in creating social and environmental impact. With global standards like People and Planet First, and vetting and screening tools like those provided by givvable, both buyers and suppliers have opportunities to engage in meaningful partnerships that extend beyond profit, driving positive change in their communities and beyond.