We’re living through a momentous shift in the relationship between business as society. As Yunus Social Business explains, “Businesses are under increasing scrutiny from their employees, their customers and governments to help solve the global challenges we face in the world. Limiting the harm a business causes to our planet and society is no longer enough – real transformation means creating positive social and environmental value for society.”
This kind of transformation goes much deeper than an annual philanthropic donation or a one-off CSR initiative. It involves taking a critical look at the core operations of a business and asking “how can we leverage our unique skills, assets, and resources to solve our most pressing challenges for our society and our planet?”
As we highlighted in our research with over 50 corporate social responsibility leaders earlier this year, one of the main avenues for this kind of transformation to occur is through social procurement, or the process of companies buying goods and services from social enterprises. To understand why it holds so much potential to make a difference, consider this: every year, small private businesses spend over $12 Trillion just in transactions to procure goods and services from other businesses. For perspective, that’s almost 100x more than all governments combined spent on global development in 2019.
Social procurement, then, involves directing some of that business-to-business spending already in corporate budgets to world-positive suppliers, service providers, or partners along the supply chains. Only by directing daily business spending to social enterprises can companies live into their commitments of achieving their ESG targets.
Social procurement creates a win-win for the procuring company, the supplying social enterprise, and society as a whole. That shared value creation is the foundation of our S-GRID program, and basis for our selection as a Fast Company World Changing Idea Honoree in 2020.
But we are far from the only ones who see the tremendous opportunity here to transform business as a force for good. Two recent reports from some of the most respected institutions in the industry have shed additional light on the promise of social procurement, and what it takes in practice to realize that potential from both the corporate perspective and social enterprise perspective.
In this post, we’ll look more closely at each, and what they mean when taken together:
From the Corporate Perspective: The Yunus Social Business Social Procurement Manual
Forward-thinking companies are increasingly interested in and committed to partnering with social enterprises along their value chains. Examples include SAP’s 5×5 by ‘25 initiative, and the UK Buy Social Challenge which has companies like Deloitte and Siemens signing on. Yunus Social Business’ new report, The Social Procurement Manual, is a practical guide for companies who want to join the movement to integrate social business into their corporate value chains.
Of course, it’s not just altruism driving these cross-sector partnerships. They also create a competitive advantage for corporations in a rapidly changing business environment. As the report explains, “This is part of a long-term shift where business and sustainability are more connected and purpose is recognized as driving business value. That is why companies are starting to prioritize environmental sustainability and social impact in their supply chain strategy. In fact, 86% of supply chain leaders mention that sustainability is a competitive differentiator. This reinforces the role of procurement that has become more strategic and central over the past decade, as corporate buying power can be used to create long-term value for the company, planet and society, in the form of win-win partnerships.”
Here are some of the core reasons that participants in the report cited for engaging with social procurement:
And here is a helpful graphic illustrating how these partnerships drive multiple layers of value for the procuring corporation:
As you can see, there’s a strong case to be made for the benefits to corporations of seeking out and solidifying these kinds of partnerships. In order to reap those benefits, the report identifies five areas for consideration when approaching social entrepreneurship, which it calls “The 5S’s of Social Procurement”:
From the Social Enterprise Perspective: Acumen’s Corporate Ready Report
Despite its increasing popularity, there is surprisingly little information about these types of corporate and social enterprise business relationships. Acumen’s latest research was undertaken in collaboration with the World Economic Forum (WEF) COVID Response Alliance for Social Entrepreneurs to support increased access to corporate value chains for social enterprises by answering questions like:
- Do social enterprises have the ability to sell to corporations? If so, in what industries and geographies is this taking place?
- Are SEs effective in helping corporations meet their business as well as social impact goals, and how is this demonstrated?
- What are the challenges SEs face when selling to corporate customers and how are these challenges being addressed?
The key findings of the report “debunk some of the common misperceptions about social enterprises and their business capacity,” revealing that actually:
Perhaps one of the more unexpected findings of the report was just how many social enterprises are already engaged in these kinds of partnerships around the globe. According to the report, “Our research findings clearly show that social enterprises (SEs) are not only ready to do business with corporations, but that there are many successful business partnerships already in place. These partnerships span a broad range of geographies and industries, addressing business needs including workforce training, commodity supply, agricultural inputs, environmental sustainability, and IT services, among others. These business partnerships are doing more than addressing a business need, they are creating positive and measurable social impact…This demonstrates the value that social enterprises are delivering to their corporate customers, and our research shows that the social enterprises are benefitting from these partnerships as well. More than 75% of SEs surveyed state that corporations were important to their growth and profitability, and every social enterprise reported that selling to corporations strengthened their business overall.”
Acumen and IKEA Social Entrepreneurship led the project with support from Ernst & Young (EY), 60 Decibels, and other Alliance members and key stakeholders to develop a framework to assess “corporate-readiness,” identifying what it means for a social enterprise to be ready to sell to a corporate customer.
The framework highlights four key elements: a compelling solution/offer, supply and demand management, access to capital, and capabilities and skills:
100 Corporate-Ready Social Enterprises
The report culminates with a list of the top 100 corporate-ready social enterprises across sectors and geographies, demonstrating the diversity of opportunities when it comes to potential partners. We’re honored to share that MovingWorlds was included on that list.
But what we are the most proud of is how many of the social enterprises we’ve partnered with and supported over the years are also included in the list, like:
- Kuli Kuli: Kuli Kuli creates sustainable superfood snacks and naturally energizing moringa powders that improve the health of women, and the planet. Kuli Kuli has supplied to Whole Foods and other large retailers.
- 2nd Innings Handicrafts / I was a sari: 2nd Innings Handicrafts (2IH) is a creative textile manufacturing company based in Mumbai. It manufactures and sells sustainable fashion products, ready-to-wear clothing, accessories, and white-label textile products based on specifications provided by ethical buyers. It’s a zero-dividend social enterprise, reinvesting 100% of its profits into developing the business and uplifting underprivileged women.
- Batik Boutique: Batik Boutique works with over 200 artisans to make gifts, apparel, and merchandise with hand-dyed textiles and eco-friendly materials.
- Makers Unite: Makers Unite is a textile-based creative agency that supports newcomers from refugee backgrounds with access to the job market through sustainable clothing production and social inclusion programs. Through these programs, it aims to change the narrative on migration globally while making the fashion industry more circular.
- Studio Coppre: Studio Coppre is a social impact brand that brings highly skilled artisans into the economic mainstream. The organization also promotes a culture-based development model that focuses on heritage and craft preservation.
- Desolenator: Desolenator creates high-quality water at scale through a decentralized, regenerative, ocean-safe method powered by solar energy. Its impact goes beyond water provisioning to create resilient communities.
- ECOLOO Group: ECOLOO Group develops, builds and markets unique and patented innovations and environmental solutions. As a social impact business, it promotes, sells, leases, rents, and maintains its innovative sustainable, biological, and standalone toilet system that’s waterless, odourless, energy-free, and maintenance-free. Its toilet system has positively impacted people’s health and has taken leaps in water conservation and pollution reduction in 20+ countries.
- Hipocampus: Hipocampus Centros de Aprendizaje aims to provide affordable community-driven early childcare and education through its best-practice learning centers focused on children from one to six years old. To support working mothers and provide a service affordable to most families, it partners with corporates to establish centers fully adapted to their needs and employs local women as community educators.
- Incluyeme: Incluyeme.com works for a world where people with disabilities can live their lives to the fullest through access to health care programs, education, social protection, and work with no barriers.
- OneSeventeenMedia: OneSeventeen Media develops digital mental health care solutions for K-12 schools that help educators improve outcome-based social, emotional, and mental health results for students. ‘reThinkIt!’ is its proven effective mobile tele-mental health platform that has already prevented a potential school shooting and multiple teen suicides.
- Reach52: reach52 is a tech social enterprise that provides accessible and affordable health care services to communities where health care access is limited across South Asia, Southeast Asia and East Africa. By August 2021, it has connected 600,000+ users to its platform, screened 50,000+ people for health conditions, trained 5,000+ health workers and partnered with 20+ leading global pharma and financial services organisations.
Although not specifically referenced by the Acumen report, we’d also like to highlight the following social enterprises in our S-GRID Social Enterprise Accelerator Network who have also demonstrated their commitment to impact and corporate readiness:
- Seabin Project: Seabin Project is an Australian social enterprise dedicated to cleaner oceans that has evolved from cleaning up plastic pollution into a global marine data, technology, and educational initiative driving behavioral & policy change.
- Arqlite: Arqlite is a recycling technology company building the next generation of sustainable building materials. Its green technology is changing the plastic recycling industry with the capability to process up to 1 ton of non-recyclable plastics per hour, which can be used for green construction gravel, light aggregate, hydroponic growth media, drainage media, and more.
- Metis Consulting Group: Metis Consulting is a software development and IT Management Consulting firm that is a Disability-Owned Business Enterprise (DOBE) and certified B-Corporation.
- Chia Sisters: Chia Sisters is a social enterprise that produces natural, nutritious drinks in a solar-powered, zero carbon juicery in New Zealand.
- Proof of Impact: Proof of Impact is a data intelligence platform that transforms data into impact and financial outcomes. Powered by Impact Catalyst(TM), Proof of Impact provides a suite of technology solutions to maximize impact and financial returns.
- Voiceitt: Voiceitt is a speech recognition app for people with speech disabilities, disorders, or impairments. It recently partnered with Amazon to make Alexa more accessible for all.
- Belouga: Belouga is an online learning platform making social learning accessible for all by blending real-world experiences and events with everyday classroom curriculum, all in a collaborative environment.
- Vega Coffee: Vega Coffee is a social enterprise reimagining the coffee value chain by supporting smallholder farmers in capturing more of the value of their final product of organic and fair-trade coffee.
- World for Good: World for Good is a social enterprise that upcycles waste from the textile industry into reusable tote bags that are a sustainable alternative to single-use plastic bags. To make the bags, World For Good employs women from communities vulnerable to human trafficking at fair wages, creating opportunities for financial independence and security.
- Blue Dot: Blue Dot is a sustainable promotional products (swag) company that is re-imagining the $24.7 billion industry in both supply chain and customer experience.
- BEMPU Health: BEMPU Health is an India-based social enterprise that has developed innovative, life-saving health products to give every child a chance to live a full and healthy life.
- ARED: ARED is a hard-tech as a service company (HAAS) based in Rwanda and Uganda that has developed a business-in-a-box solar kiosk, app, and software platform that empowers mostly women and people with disabilities using a micro franchise business model.
- Urban Spring: Urban Spring is a Hong Kong based social enterprise that brings together a suite of technology and applications for empowering deployment of smarter alternatives to single-use plastic bottled water for a sustainable urban lifestyle.
- Cropsticks: Cropsticks is a Benefit Corporation on a mission to leave behind a greener environment for future generations by producing eco-friendly products for restaurants and retailers, like bamboo chopsticks.
Implications for the Future
Taken together, these two reports reveal something important: there is real interest in these kinds of partnerships from the corporate side, and real capacity to deliver on these partnerships from the social enterprise side. These types of partnerships are already happening all over the world, and will continue to happen now that for-profit and for-purpose business objectives are aligning more than they ever have before. Whether you’re a corporate leader or a social entrepreneur, social procurement will continue to gain prominence as a meaningful way to transform business for good, representing a real opportunity to truly build back better.
Is your social enterprise seeking to become corporate ready and take advantage of this opportunity to scale through partnerships? Apply to S-GRID. Looking for support working with social enterprises? Talk to us!