The Rise of Social Procurement

ECO-Buy is pleased to announce the launch of Social Procurement Australasia (SPA). The initiative aims to encourage and support the effective adoption of social procurement in Australia and New Zealand. It is a collaboration between organisations who are actively enabling and implementing social procurement in the region, including Social Traders, ArcBlue Consulting, Knode, City of Port Phillip, Municipal Association Victoria, the NSW Social Procurement Action Group and ECO-Buy.

ECO-Buy recognises that social procurement in Australasia is still in its infancy, and we look forward to playing our part as SPA members to nurture this important field. Through our experience with our membership base and consulting clients, we believe there are three key areas of focus for SPA that ECO-Buy has capability to contribute to:

  1. Equipping social enterprises to be ‘better suppliers’
  2. Supporting buyers to embed social considerations and outcomes in to their purchasing
  3. Measuring social outcomes and impact

1.       Better suppliers

Increasingly there are organisations and enterprises offering social outcomes as part of the purchase of goods and services. Social enterprises, indigenous businesses, and Australian Disability Enterprises, amongst others, are offering everything from stationery to catering to waste management. You can see some great examples on Social Enterprise Finder and the Supply Nation website. However, our observation is that many of these businesses are not ‘tooled up’ to meet the mainstream tendering and procurement requirements of large organisations, for example not having environmental and organisational management systems in place or processes for their own sustainable procurement.  

While some buyers are able to find ways to work around established procurement processes to create opportunities for purchasing from such organisations, this often means that spend is small and managed outside the mainstream procurement function, i.e. by the community or CSR area of a corporate. The bigger purchases, and therefore the bigger social impact, lies in enabling social procurement to be carried out through the standard procurement function.

ECO-Buy therefore sees that building the capability of social procurement suppliers to be ‘better suppliers’ is an essential part of growing the social procurement space. We are already working to assist some suppliers to establish their environmental credentials and communicate these to potential customers through our Green Product Skills Scholarship, subsidised by the Victorian Department of State Development, Business and Innovation. ECO-Buy is eager to do more in this area, building on our history of supplier engagement and our ECO-Find database, and will be exploring projects and opportunities in the coming months. Got an idea? Get in touch!

2.       Supporting buyers

As mentioned above, in many organisations, social procurement has been isolated to one-off initiatives within the community and CSR departments, not embedded into standard procurement practice. To enable social procurement to scale, social outcomes must be considered in all purchases and embedded into tender and contract language. Some efforts have already been made to provide procurement staff with the tools to do this, including the Social Procurement Toolkit and the Social Procurement in NSW Guide.

The SPA aims to take this further by developing a business case document to demonstrate the value for money of social procurement, providing a website portal of guidance and tools, and training for business and government buyers.

ECO-Buy looks forward to contributing to this work, as well as embedding social procurement considerations in to our resources and training for members. For example, we are currently piloting the tracking and reporting of social procurement spend with our Victorian local government members. Stay tuned for more on this and let us know if you have any particular resources or training you are looking for.

3.       Measuring progress

With all the hype on social procurement, and businesses rushing to implement social procurement policies, it’s important to remember what it is for – to enable real social change for individuals and communities. Establishing effective social impact measurement of social procurement is essential to ensure that we are achieving the social benefits intended and to demonstrate the value to the business. This can be achieved through holistic cost-benefit analysis, as discussed in our recent webinar. Tracking real metrics also allows organisations to continue to improve year on year. ECO-Buy looks forward to working further with the Social Sustainability team within Net Balance, our members and clients to advance social impact measurement for social procurement.

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There is much to be done to advance social procurement and see it embedded in everyday procurement practices. ECO-Buy is excited to be a part of the founding group of organisations establishing SPA and looks forward to working with its members and clients to see great advances in social procurement over the coming years. If you have any thoughts, questions or ideas on social procurement, we look forward to hearing from you.

The SPA will be launching this week with the Social Procurement Forum & Expo in Melbourne (Thursday, 19 Sept) and next week in Sydney at the Social and Sustainable Procurement Workshop (Thursday, 26 Sept). For more information on the SPA, see here.

If you’d like to be involved in SPA or have ideas on social procurement initiatives, contact us.