How social procurement aligns with the Triple Bottom Line

Triple Bottom Line (TBL) refers to the consideration of environmental and social aspects of an organisation’s activity alongside more traditional financial (economic) measures, increasingly being called People, Planet, Profit. Most purchasers are now fairly familiar with environmental considerations such as raw materials use, impacts on biodiversity, energy and water consumption, waste generation, pollution and carbon emissions. Social considerations are often less well understood, and include working conditions, safety, ethical practices, access to education and employment opportunities, community health, social cohesion and diversity throughout the supply chain. For governments and large corporates, the economic aspect may also include job creation goals and support for SMEs.

Social procurement involves using procurement processes and purchasing power to generate positive social outcomes in addition to the delivery of efficient goods, services and works. Source: Social Procurement – A Guide for Victorian Local Government, 2010, Department of Planning and Community Development, Victoria

Social procurement can help address complex issues in communities such as unemployment, disengagement and economic decline. It can also help address the associated consequences such as crime and poor health outcomes, through encouraging participation in training and economic activity. By using purchasing power in this way, organisations are generating positive social outcomes and contributing to stronger communities globally or locally for their staff, clients and other stakeholders.

In practice, social procurement can involve a number of different approaches, such as:

  1. Asking potential suppliers at the Request for Tender/Request for Quotation stage what initiatives they have in place to provide opportunities to disadvantaged or marginalised groups, or how they support local communities. Some organisations extend this into contractual requirements in the form of social clauses.
  2. Requiring suppliers for certain types of procurements to provide employment opportunities through the contract for specific groups, such as Aboriginal and Torres Strait Islanders or people with a disability.
  3. Implementing a policy to purchase Fairtrade or other ethically produced products in preference to alternatives.
  4. Placing certain types of contracts with social enterprises.  A social enterprise is a social benefit business, which trades as a way to fulfil its overall mission. There are many different types, including cooperatives and mutuals; commercial businesses set up by charities that then reinvest the profits; businesses that undertake commercial work to provide employment opportunities for people with a disability; and community enterprises.

ECO-Buy is holding a breakfast forum on 16 August on the topic of social procurement; Buying a Better World.