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What is Social Purchasing?

Whether intentional or un-intentional every purchasing decision creates ripples and has multiplying impacts.

 

Sustainability does not always have to be viewed as a constraint, but can be a strategy for discovering and exploiting new opportunities as well, and in the area of purchasing there are a lot of opportunities for those who move from thinking of it only as "green purchasing" to including the social side as well.

Every business, non-profit and level of government purchases goods and services such as cleaning, catering, couriers, office supplies, IT, coffee, printing, maintenance and repairs, furniture, fuel, landscaping and more. Various criteria are considered and negotiated sometimes with a broad number of contenders, but traditionally purchasing decisions are based on the lowest price for equivalent product or service.

What is not always considered in supplier selection are the ripple and multiplying effects of purchasing decisions. Purchasing is not an isolated, cost-only decision. Purchasing choices directly impact employment growth or decline, local economies, and the environment of the supplier and their community.

 

Sustainable Purchasing

To understand social purchasing, let's first begin with a broader definition for Sustainable Purchasing. Sustainable purchasing is what happens when organizations choose to see procurement as more than a cost-only decision. Sustainable Purchasing involves supply chain, purchasing and procurement policies and practices that contribute to the creation of a blended-value bottom line including social, economic and environmental impacts.

Other organizations, networks, and authors have similarly defined Sustainable Purchasing. The BuySmart Network describes social purchasing as a "...process by which organizations buy goods and services taking into account not only the economic value for money (price, quality, availability, functionality) but also the environmental, social, and ethical impacts of these goods and services - at local, regional, and global levels." (1)

Author Larry Berglund notes that "the supply chain is the common denominator in all businesses. It is here where a difference in choices based on a value-based strategy can lead to successful business operations. The expanded role of responsibility for supply professionals to be inclusive of social values and cognitive of environmental consequences is taking place across the globe."(2)

The definitions of sustainable purchasing are inclusive of financial, environmental and social factors. But in practice it has generally been limited to financial and environmental considerations; the inclusion of social impacts are just emerging, and we hope this toolkit helps us all move forward in the area of social purchasing.

 

Social Purchasing

Social purchasing looks at the multiple social impacts purchasing has, such as employment opportunities, poverty reduction, social inclusion and community economic development.

To be an industry leader in creating social value from purchasing decisions organizations have to be proactive, not reactive. The challenge is to move to the next level and become "corporate social opportunity companies"(3)  - where organizations not only seek to minimize their risks but actually recognize profit opportunities and embrace socially conscious sustainable purchasing aggressively.

By incorporating a social component, sustainable purchasing moves beyond simply "not causing harm" and negative screening to generating social opportunities.

 

Next Steps...

Social enterprises inherently reflect a blended value in their business model and purchasing from social enterprises fits perfectly within the social factors of a sustainable purchasing strategy.

Let's look at two examples of procurement and how each business involved is successfully purchasing from social enterprises, using existing purchasing dollars to create an added social value:

Private Sector:

SAP Business Objects, a software company in Vancouver, purchases catering from H.A.V.E and Potluck Catering (two social enterprises in Vancouver's poorest neighbourhood that create training and permanent employment opportunities for marginalized community members). SAP Business Objects gets their catering services at a competitive price and excellent quality, and they blend their existing purchasing with a social return.

Public Sector:

The City of Vancouver contracts with Starworks to assemble signage. Starworks, a social enterprise, employs people with developmental disabilities.

 

References 

 

 

Key Links