Social procurement. Good for governments, good for businesses, good for social enterprises and good for society.

2 Nov 2021 | News & Events

Social procurement refers to the purchase of goods and services, by businesses and governments, from social enterprises and other organisations that have a strong ethical mission. It considers not just the economic impact of a purchase but also the positive social and/or environmental impact that that purchase entails.

This multi-outcome, value-added approach is growing, as businesses and governments worldwide seek ways to trade and operate more sustainably. This growth is also due in no small measure to lobbying by the social enterprise sector, which has strengthened and proven its worth over the past three decades.

Positive support for social procurement by governments worldwide

Social procurement is increasingly featured in government policy, as the benefits to society of buying from local, ethical suppliers are being recognised. The Irish Government has vowed in its National Social Enterprise Policy for Ireland 2019-2022 to “support capacity-building for social enterprises in relation to procurement processes through workshops and training” and to “work with stakeholders to identify how to improve opportunities for social enterprises in the business-to-business supply-chain and in public procurement.” Through the Social Considerations Advisory Group it will “help policy makers to better understand how procurement can be used to facilitate the advancement of social policy objectives within appropriate and structured public procurement guidelines”.

This commitment suggests an appetite to rework traditional procurement policies, in order to accommodate social enterprises. Going further, a new legal structure for social enterprises – none currently exists under Irish law – could support a better understanding of what social enterprises are and where they ‘fit’ with procurement managers and their processes.

A key finding of the 2020 Buying for Social Impact (BSI) project (commissioned by the Executive Agency for Small and Medium-sized Enterprises and the European Commission Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs) was that “…socially responsible public procurement [SRPP] is easier in countries where legal frameworks or legal forms for social economy enterprises exist”. It continues: “it is also easier for social economy enterprises to access public procurement procedures in countries where those legal frameworks or legal forms exist”.

Businesses are using social procurement to achieve their sustainability goals

Businesses are also buying from social enterprises. Though less active than governments, according to The State of Social Procurement in Australia & New Zealand 2021 report, they are nonetheless under pressure to become more sustainable, enhance their reputations and cultivate positive relationships with the communities in which they are based. Tammy Darcy, CEO of SERI has highlighted “the need for social impact to be included as a consideration in the wider economy by all enterprises, not just social enterprises”. 

Social procurement in the UK has been propelled by Social Enterprise UK’s successful Buy Social Corporate Challenge. The campaign’s corporate focus has resulted in a £165m spend, by 27 participating businesses since 2018, on goods and services supplied by social enterprises.

Social procurement – a strategic choice

Social enterprises offer corporations the opportunity to merge sustainable initiatives with corporate and commercial strategy. This allows corporations to ‘hit the ground running’ with projects that provide social as well as commercial value, while not having to deviate significantly from strategy. To governments, they offer flexibility and the opportunity to collaborate on projects where local interest, knowledge and expertise are key to undertaking a project efficiently.

Social procurement offers a lifeline to social enterprises that helps them to grow, to develop a stronger voice and, through collaboration, to expand their influence. It provides them with the means to gain greater recognition as real, innovative businesses operating in competitive marketplaces. It enables them to forge a greater standing in their communities and to become a stronger force for creating positive social change.

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Social Procurement Resources

Buying social: A guide to taking account of social considerations in public procurement

Publications Office of the European Union

A Guide to Social Procurement

Buy Social Canada

Green Public Procurement: Guidance for the Public Sector

Environmental Protection Agency [EPA], Ireland

Guide to Social Value in Procurement

Evolve UK and Enterprise Ireland 

The State of Procurement in Australia and New Zealand

Centre for Social Impact, Swinburne University of Technology, Australia