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Buyers from across the public and private sectors are increasingly looking to social procurement to satisfy the demands of clients, legislators, the workforce and investors. Social procurement - buying from social suppliers - is a cost-effective way of creating social and environmental value from existing procurement spend. The benefits can be impactful across the organisation as well as wider society. Social procurement creates positive outcomes in many areas of the business including:
Here we explain how social procurement creates high returns in each of those areas.
Sales
Executives across the public and private sectors are increasingly targeting social and environmental outcomes. Pressures from clients, legislation, consumers and an ethically aware workforce have buyers looking for suppliers and partners that reflect a positive social and environmental mission.
A strong ESG proposition has also become essential for financing of projects. Investors see operations that provide better social and environmental outcomes as creating longer-term value and lower regulatory risk.
Policies such as the Social Value model give businesses that actively engage with social procurement an edge in bidding for government contracts. Government contractors are now looking to their suppliers to create more social value and so creating a knock-on effect throughout supply chains.
77% of institutional investors in Europe expect to stop buying non-ESG products.
PwC
Procurement
Social suppliers can lower supply chain risks as they tend to be more agile and resilient than traditional businesses. They are constitutionally committed to tackling society's biggest challenges making them experienced at adapting under pressure. They also tend to reinvest their profits into maintaining and growing their business rather than paying out dividends to founders and shareholders.
Diversifying and localising your suppliers further reduces risks and introduces more expert knowledge to your supply chain. Social suppliers are often well-connected in local communities and have more diverse leadership than traditional businesses. This means they bring a wealth of experience and local knowledge whilst also reducing the distance between suppliers and point of delivery.
All of the above comes at little to no extra cost as social suppliers are largely found to be competitive on price, reliability, quality, volumes and delivering on time.
80% of corporate buyers found social enterprises to be competitive on quality and supply assurance. Yunus Business School
Read: How switching one supplier can make a huge positive difference
See how a Supply Change Trusted Supplier helped a major housing association:
Cut costs
Improve efficiency
Reduce waste and emissions
Support people affected by homelessness
Social value
Social suppliers hold the knowledge and network to help businesses solve social and environmental challenges. They are well-connected to targeted stakeholders (such as ex-offenders, refugees and other people facing barriers to work) and have hands-on experience in creating positive social and environmental outcomes. Social suppliers can provide detailed reports on these outcomes such as social return on investment (SROI), carbon emission savings and jobs created.
Social suppliers also provide a cost-effective way of achieving social and sustainability targets. They provide goods and services that would need to be procured anyway at similar or lower costs while providing additional social and environmental value.
"For every pound we spend with a social enterprise, we generate around £1.77 of social impact." Su Pickerill, Wates
Environmental sustainability
Many social suppliers focus on missions that relate to better environmental sustainability. There are many who are experts on reuse, recycling and waste reduction. For example, social suppliers can refurbish old tech, redistribute used equipment to charitable causes or help switch to products that use less packaging.
Most social suppliers are commited to fighting climate change and so have invested in methods that help buyers reduce their carbon emissions. This can include switching to more efficient production methods, sourcing low-carbon products and reducing deliveries. Their expert knowledge and specialist services can also protect and nurture the natural environment, particularly locally.
67% of social enterprises have or plan to embed tackling climate change into their constitution or articles of association.
SEUK
Workforce
It’s never been more important for employers to reflect the ethics of the workforce. Embedding social value attracts the best talent on the market and keeps staff engaged with an organisation’s purpose.
Through social suppliers, staff can engage in unique programmes led by social suppliers. They can develop skills like leadership whilst learning from and supporting people with varied and sometimes challenging life experiences.
Businesses can also engage staff and create positive work environments through social supplier products. Rewards, experiences or supplies used in the office can be sourced from social suppliers and each carry a story that speaks to hearts and minds. This might include specialist teas provided by a company supports refugees into work, floral displays by a company supporting women who have experienced domestic abuse or handwash by a company that distributes profits to fight water poverty.
If you want to make it easier for your team to buy from social suppliers check out our 'For buyers' page or find out more about the Supply Change Trusted Suppliers.