Ann Summerhayes is CEO of Inside Job Productions, a film production company and social enterprise who invest profits into training and employment projects supporting people with lived experience of mental health challenges or within the criminal justice system.
Traditional procurement practices focus primarily on cost, efficiency, and quality. Because traditional business models are all about profit first.
However, as the world becomes more interconnected and socially conscious, corporations must evolve their procurement strategies to reflect these changes. Social procurement involves considering the social impact of purchasing decisions, which requires a fundamental shift in mindset. This approach not only addresses immediate business needs – you still get great service or products, work with brilliant people, and get a good price – but also contributes to broader societal goals, such as reducing inequality and fostering community development.
Social procurement isn’t charity; it makes good business sense
Contrary to the perception that social procurement is purely philanthropic, it actually makes strong business sense. Integrating social procurement strategies can lead to diversified supply chains, enhanced brand reputation, and increased customer loyalty. We know that people want to work with businesses that are doing good for the world, with studies showing customers prefer brands with aligned corporate purpose and values and employees and employees wanting to work for companies who care.
By the nature of their approach to business, social enterprises are doing things a little differently, and so partnering with social enterprises can drive innovation and bring unique perspectives that traditional suppliers may not offer – which can lead to sustainable business growth and a competitive edge in the market. The principle of shared value offers a way to manage impacts and challenges while generating mutual benefits.
Shared value creates economic value by addressing societal needs and challenges. At the same time, social problems cost money, which can affect the entire economic model and supply chain. However, corporate shared value is often seen as a trade-off, with social impact initiatives perceived as additional costs that dilute profits. Social procurement tend to emphasise social ‘giving’ over ‘investment’. But actually it’s about expanding the total pool of economic and social value available.
ESG/CSR should include social impact
Environmental, Social, and Governance (ESG) and Corporate Social Responsibility (CSR) initiatives are crucial for modern businesses. Including social impact within these frameworks ensures that corporations address all aspects of sustainability and responsibility. We see a strong focus on the environment and things like waste reduction and carbon footprint, but people are central to society and should not be forgotten. Social procurement is a tangible way to demonstrate commitment to social causes, thereby fulfilling ESG and CSR objectives. This inclusion helps corporations build trust with stakeholders and align their operations with global sustainability goals.
And it changes lives. Social procurement can involve helping organisations create employment opportunities, can improve mental health, can enhance economic development in communities and more. That’s as worthwhile as being green.
What social enterprises can do to stand out from the crowd
But as we said, this isn’t a charity initiative. Social enterprises still have to be good at what they do. For social enterprises to successfully compete and attract corporate partnerships, they must highlight their unique value propositions. This includes showcasing their social impact metrics, demonstrating quality and reliability, and being transparent about their operations. And like all businesses, social enterprises should invest in marketing and relationship-building to increase their visibility and credibility in the corporate sector.
How corporates can make it easier for social enterprises
Corporates can facilitate the integration of social enterprises into their supply chains by simplifying procurement processes (some of them really aren’t built for small enterprises and take so much resource it can be expensive trying to be a client), providing mentorship, and offering financial support.
Establishing clear guidelines and criteria for social procurement can also help social enterprises understand and meet corporate expectations. And creating dedicated programs or partnerships to support social enterprises can enhance their capacity and readiness to engage in larger, more complex projects.
Embracing social procurement requires a shift in mindset from traditional procurement practices to a more inclusive and socially conscious approach. This shift not only benefits society but also brings significant business advantages, aligning with modern ESG and CSR goals. It is good for business, good for the economy, good for society and good for people.
