An Introduction to Social and Sustainable Procurement
Procurement practices are evolving to reflect the growing importance of sustainability and social responsibility. Social and sustainable procurement is not just a buzzword. It’s a necessity for businesses and governments committed to ethical operations and long-term environmental stewardship. regionalToday we will explore the concepts of social and sustainable procurement, illustrate their importance, and provide practical examples from Australia and New Zealand to highlight how these practices are being implemented effectively.
So what is social and sustainable procurement? Social procurement refers to purchasing goods and services while considering the social impact of these transactions. This can include supporting disadvantaged groups, fostering local economic development, or promoting fair labour practices. Sustainable procurement, on the other hand, emphasises the environmental impact of procurement decisions, focusing on reducing carbon footprints, minimising waste, and conserving natural resources. Together, these procurement strategies aim to create positive social outcomes and environmental sustainability while still achieving cost-effectiveness and efficiency. Integrating these practices into procurement processes is becoming increasingly critical as organisations seek to align their operations with broader societal goals and regulatory frameworks.
Now aside from warm fuzzy feelings, is it really important? Well yes, it is. The significance of social and sustainable procurement extends beyond mere compliance with legal standards or societal expectations. It represents a fundamental shift in how organisations perceive their role in the global supply chain. By adopting these practices, organisations can:
- Enhance Brand Reputation: Companies that prioritise ethical procurement are often viewed more favourably by consumers and stakeholders. This positive perception can lead to increased loyalty and support.
- Mitigate Risks: Sustainable procurement reduces the risk of supply chain disruptions due to environmental or social issues, ensuring a more resilient operation.
- Drive Innovation: Embracing sustainability can spur innovation, leading to the development of new products, services, and processes that are both eco-friendly and socially beneficial.
- Comply with Regulations: Governments worldwide are increasingly mandating sustainable and social procurement practices. Staying ahead of these regulations can provide a competitive advantage.
- Contribute to Global Goals: Aligning procurement practices with global initiatives such as the United Nations Sustainable Development Goals (SDGs) can help organisations play a part in addressing critical global challenges.
It sounds great, doesn’t it? Almost too good to be true. Australia has been at the forefront of integrating social and sustainable procurement practices. Here are a few notable examples:
- Victoria’s Social Procurement Framework: The Victorian government has implemented a comprehensive social procurement framework that leverages the government’s purchasing power to generate social value. This framework includes targets for engaging with social enterprises, Indigenous businesses, and suppliers who provide opportunities for disadvantaged communities. By incorporating social procurement into public sector contracts, Victoria fosters inclusive economic growth and community development. It has also been an excellent wealth of information for several articles I have previously written on Sustainbil.IT’s LinkedIn page.
- Sydney Metro Project: The Sydney Metro project, one of Australia’s largest public transport infrastructure projects, has integrated sustainability into its procurement processes. The project emphasises using sustainable materials, waste reduction, and energy-efficient construction practices. Additionally, it prioritises engaging local suppliers and creating job opportunities for underrepresented groups. This approach not only minimises environmental impact but also supports regional economic development.
Our friends across the Tasman Sea have also made significant strides in promoting social and sustainable procurement.
- Broader Outcomes Initiative: The New Zealand Government’s Broader Outcomes initiative aims to achieve wider social, economic, and environmental benefits through procurement activities. This initiative includes specific objectives such as reducing carbon emissions, supporting local industries, and promoting fair labour practices. By embedding these outcomes into procurement policies, New Zealand is driving positive change across multiple sectors.
- Auckland Council’s Sustainable Procurement Strategy: Auckland Council has developed a sustainable procurement strategy that aligns with its commitment to environmental stewardship and community well-being. Their plan focuses on procuring goods and services that have minimal environmental impact, support local businesses, and promote social inclusion. For example, the council has implemented measures to ensure that construction projects use recycled materials and create employment opportunities for marginalised groups.
Yes, these are all examples from various levels of government, but companies like IKEA are also heavily involved and benefiting from social and sustainable procurement. So aside from making your IT purchase through Sustainabil.IT, you might be wondering what are the next steps your organisation can take to foster social and sustainable social procurement practices. Well, the next steps are:
- Define Goals and Objectives: Clearly articulate the social and environmental goals that your organisation aims to achieve through its procurement activities. This could include reducing carbon emissions, supporting local suppliers, or promoting diversity and inclusion.
- Develop a Framework: Create a procurement framework that outlines the criteria and standards for evaluating suppliers based on their social and environmental performance. This framework should be integrated into the overall procurement policy.
- Engage Stakeholders: Involve your key stakeholders, including suppliers, customers, and employees, in the development and implementation of social and sustainable procurement practices. Collaboration and communication are essential for driving change.
- Measure and Report: Establish metrics to track the impact of procurement activities on social and environmental outcomes because if it’s not being measured, you won’t know if your social procurement and sustainable procurement strategy is working. Regularly report on progress and use this data to improve practices over time.
- Provide Training and Support: Offer training and resources to procurement teams to ensure they understand the importance of social and sustainable procurement and are equipped to implement these practices effectively. They can’t do their best without knowing what the best practice is.
Social and sustainable procurement represents a powerful tool for your organisations to create positive social and environmental impacts while achieving your business objectives. The examples from Australia and New Zealand demonstrate that it is possible to integrate these practices into procurement processes successfully. By prioritising ethical and sustainable procurement, your organisation can contribute to a more equitable and sustainable future for all. As the world continues to grapple with pressing social and environmental challenges, the role of procurement in driving positive change cannot be underestimated. By adopting social and sustainable procurement practices, your organisation can not only enhance their operations but also contribute to the broader goal of creating a more just and sustainable world.
