Spring 2012

Procure for a Cause

The smartest CEOs know the competitiveness of the business and the health of the community in which they operate are closely tied.  The rise of ‘social procurement’ is now giving businesses the opportunity to disband their sponsorships department and empower their procurement teams to put their money where their mouth is - spending corporate dollars with the companies, communities and people that have a social, not only a business objective. 

Dr Ian Williamson, Director of the Asia Pacific Social Impact Leadership Centre and Melbourne Business School Associate Dean, believes: “consideration of social issues when developing business processes will enhance the firm’s social impact while simultaneously helping the business to take advantage of opportunities created by social issues in society”.  

Still a relatively new term, social procurement – the concept of using procurement to leverage social outcomes - is experiencing a firm push at the executive level as part of a new-world corporate strategy. 

And it’s no wonder:  “Social procurement isn’t just about creating a ‘warm and fuzzy’ section in the Annual Report,” says Faculty consultant, Matt Bonwick.  He explains, “If it’s done effectively, social procurement can drive social value and real top line growth.” In any case, by contracting to work with social benefit suppliers, businesses receive required goods/services while contributing social benefits to the community.  However, just how to bridge the gap between ideals and procurement practice remains a challenge for most companies.

“Finding those opportunities where there is potential to drive increased social value through the use of purchasing power begins with basic supply and demand,” muses Peter Morichovitis, Chief Procurement Officer, Gold Coast City Council (GCCC).

First exposed to social procurement during his time at BHP Billiton, Morichovitis, now CPO at GCCC, remains passionate about using procurement to drive social outcomes.  “At BHP Billiton we engaged with local suppliers to generate improved employment for indigenous communities”.  Observing employment trends on the Gold Coast, Morichovitis says, “Procurement is taking a lead to engage with local businesses to address that demand for work”. 
GCCC recently released their first social procurement tender for the supply of cleaning services to Council building, libraries and offices. “We are also planning to run a social procurement tender for recycling at the Molendinar Waste and Recycling Facility,” says Morichovitis.  

While Morichovitis understands there are certain perceptions about working with new and untested suppliers, he says, “It’s important that organisations continue to engage, educate and work with social enterprises to increase their capacity and capability – which will inevitably result in increased social outcomes for our community.”
For companies interested in taking their first step towards social procurement, Morichovitis recommends asking:  What are the social needs at play?  What are we trying to achieve through procurement?  Where are the points of alignment?  “It’s really just about matching internal business requirements with the external local communities, taking particular note of disadvantaged communities”.

The Faculty ‘began a conversation’ on social procurement with a group of committed corporates over a year ago. This has resulted in proactive best practice sharing and encouragement to become further committed to social procurement.  

The Faculty is currently conducting baseline research project into the state of social procurement with Social Traders. If you have a story to tell, wish to join The Corporate Board for social procurement, or are interested in further information, please contact Matthew Bonwick at The Faculty. 

Get Social this Christmas

This Christmas, Social Traders would like to encourage people to consider social enterprise gifts for colleagues, family and friends.  Some great gift ideas from social enterprises tackling a range of challenging social and environmental issues will be lined up and presented in a Christmas Shopping Catalogue.  

Social Traders is seeking organisations to promote the Catalogue internally to staff, when it is launched in November. To assist with the promotion, Social Traders can provide a news story for e-newsletters, posters and small brochures. Any organisations with an interest to promote the Catalogue can contact Mindy Leow at Social Traders directly.