Social procurement is when companies buy from suppliers that create a positive impact on society. One company’s story shows how to start social procurement at your own company.
Banner photo courtesy of Embers, a social enterprise that creates economic and employment opportunities for people living on low incomes.
Social procurement means sourcing supplies and labour from ‘social value suppliers’ — suppliers whose work makes a positive impact on people or the planet (or both).
Social procurement can be a major ‘lever of change’: creating a lot of sustainability change per unit of effort. Your company’s routine purchasing can support the community, address inequality, and have a concrete impact on specific social issues.
This article is part two of a 2-part series on social procurement.
Part 1 of this series describes what social procurement means and the value it provides. I describe how it benefits communities and the environment – and how it increased Chandos Construction’s revenue by nearly 50%.
In this article, I use Chandos Construction’s story to outline three concrete steps for getting started with social procurement.
How to Get Started with Social Procurement
So, you want to re-direct your procurement money to social value suppliers. What’s next?
There are three important pieces to think about:
- Defining your social procurement focus
- Building support within the company (through storytelling)
- Accessing expertise on the specifics of implementation
Here’s how to approach these considerations, with illustration from Chandos’ experience. Chandos is a 700-employee construction company based in Canada.
1. Define Your Social Procurement Focus
When you shift to social procurement, you can buy from many different types of suppliers. Those include:
- Social enterprises
- Local or regional small-medium enterprises
- Businesses owned by historically marginalized groups, such as women, Indigenous Peoples, people of colour, people who are differently abled, or members of the LGBTQ+ community
- Businesses using social procurement in their own supply chains
As you can see, there are a lot of options to consider!
To narrow down the options, consider your company’s existing social or environmental priorities. Ideally, you have a company purpose statement or sustainability strategy that articulates these. Look to them as your guide.
For example, if your company’s purpose is related to advancing renewable energy, you may want search for suppliers that are transparently moving towards net zero. Or perhaps your purpose emphasizes community building. In this case, you may want to prioritize local suppliers.
Don’t have a purpose statement? No problem. Let informal factors guide you, such as your own values or topics your staff are passionate about – this is also an excellent opportunity to engage and learn about your staff.
Example: Corporate Purpose Informs Social Procurement
In 2022, Chandos, along with partners BC Housing and The City of Vancouver, planned to construct a building to house health services, affordable housing, and a social enterprise space. This was the “Clark and 1st Project.” The project’s leadership team set ambitious social procurement goals for the project, including:
- Ensuring 10% of employment hours were delivered by new hires from “equity seeking” or historically marginalized groups, such as women or differently-abled people.
- Spending 80% of their budget on local businesses.
- Spending 10% of their budget on social enterprises.
These targets are strongly connected to the project partners’ organizational purpose.
For example, Chandos’ purpose is “to build a better world.” They unpack this statement on their website, describing it as working to “embrace and champion inclusion, collaboration, innovation, and courage.” This purpose helped inspire the target of 10% of employment hours delivered by new hires from equity-seeking groups.
The City of Vancouver is a municipal government body and BC Housing is accountable to British Columbia’s provincial government. These organizations are both charged with improving local living conditions, a purpose connected to the target of spending 80% of the project budget on local business.
2. Build Support within the Company – Through Storytelling
When companies introduce social procurement efforts, they need to explain the shift to workers.
Chandos had a long history with social procurement in hiring. But its Clarke and 1st Project pushed social procurement well beyond hiring.
Mat Chrystian, a project manager at Chandos, was responsible for leading the team that would execute the project. When his boss handed down the new strategy on social procurement, Mat had to unite his team around the vision.
“The initial conversations with the team were… interesting,” Mat said. Team members were cautious. After all, the new targets would mean major changes to the company’s suppliers and procurement processes. Few of his team members even knew what social procurement meant: they were new to Chandos, or hadn’t been involved in prior initiatives.
How could Mat get his team excited about their new mandate? He considered several options, and ultimately decided to invite people who had benefitted from social procurement to tell their stories at a team meeting.
In the video below, you’ll hear from Johnny – a man with a criminal record who was hired by Chandos. Mat’s project team heard similar powerful stories that day.
“When I [first] heard how this opportunity impacted their life, it made the hair stand up on my arms”, says Mat. He figured those stories would have the same effect on his team.
After this storytelling experience, everyone in the room supported the new social procurement goals, says Mat.
Research backs the power of storytelling
Mat’s not alone in using a storytelling approach to gain buy-in.
Canadian non-profit Buy Social Canada recently held a symposium featuring speakers from companies, suppliers, government, and other organizations involved in social procurement. Almost every speaker described the importance of storytelling. It’s used by suppliers who need to demonstrate the impact of their work and by managers, like Mat, who need their team to buy-in.
That’s no surprise. Facts are dry. But stories are engaging, emotional, and memorable.
Research also tells us that storytelling is one of the most effective ways you can rally your team around sustainability strategies. Dr. Adam Grant, professor of Psychology at Wharton, has studied what affects employee productivity. He consistently finds that when employees hear stories about their work’s positive impact on others, they are more motivated and more productive.
So, if you want your team to get excited about social procurement – or any other sustainability initiative – leverage the power of stories.
3. Access Expertise on Implementation
Once a company starts trying to execute on social procurement goals, things can get challenging. Social procurement can mean going outside a company’s existing channels, or mastering nuances around social and environmental issues.
“I wasn’t nervous about the goals themselves,” says Mat, “More so how they were going to be executed.”
The Chandos team was facing questions like:
- Where can we find social enterprises to buy from?
- Is it even possible to spend 80% of our budget locally, when so many of the materials we need come from multinational companies?
- How will we find enough qualified workers from disadvantaged groups?
Your company will probably encounter similar questions. You don’t have to answer those questions alone.
Chandos is using non-profit Buy Social Canada to help with their implementation. Buy Social Canada’s Guide to Social Procurement offers guidance and worksheets to help scope options, implement goals, and assess outcomes. They also have several directories to help companies find social value suppliers.
Not from Canada? See if your country has a similar national organization, such as Social Traders Australia.
Or, connect with an international organization doing similar work. Examples include:
- Buy Social Europe, which helps global corporations build sustainable supply chains.
- Social Enterprise World Forum (SEWF), which leads global efforts to support social enterprises.
Chandos’s Clark and 1st Project is just starting construction and will continue to work towards their social procurement targets.
Use Your Purchasing Power as a Force for Good
Most of us have considered that, as individual consumers, our purchasing decisions are a source of power. After all, businesses study consumer trends to make huge decisions about the products and services they offer and their policies, standards, and practices.
Yet it’s much less common to consider purchasing power at the company-level. Perhaps the rather dry term ‘social procurement’ hasn’t done enough to grab widespread attention.
Even so, social procurement seems to be taking hold. That’s a good thing, because it has incredible potential to improve the world. It’s true that not every social procurement purchase is created equal – buying from a local social enterprise, for example, is more impactful than just sourcing your paper from a local supplier. But the more conscious businesses can be about where their dollars are going, the better off we all will be.
Mat Chrystian of Chandos really said it best: “When you look at the magnitude of dollars we’re touching, it’s massive…we have a responsibility to use that power as a force for good.”
About the Authors
Review of this article was provided by Chelsea Hicks-Webster and Maya Fischhoff of the Network for Business Sustainability.