“Buy Social” One Year On – Social Enterprise UK Host Event

Last Thursday, Social Enterprise UK, the largest network of social enterprises in the UK, hosted a reception at the Houses of Parliament in London. Thanks to their Chair, Lord Victor Adebowale, we were able to get some great views of the Thames and to mark one year since the launch of the “Buy Social” challenge. That asks large corporates to buy more from social enterprise suppliers, with a target of a total spend of £1 billion by 2020.

Social enterprises are defined in different ways, but we like this one – “A social enterprise is a business created to further a social purpose in a financially sustainable way”. It is a somewhat loose definition, and it is clear that it some organisations that really make that social purpose goal the heart of what they do, whilst for others it maybe a little more peripheral.

The organisations that signed up initially to the challenge on the buy-side were Interserve, Johnson & Johnson, PwC, Santander, Wates, and Zurich. Others including Amey and Robertson Group have now joined as well. The spend in the first year was some £19.8 million, according to Peter Holbrook, the CEO of Enterprise UK – not bad from a standing start but clearly some way off the target. More partners are needed! 125 social enterprises have been connected with major businesses, and 35 procurement professionals have been trained in how best to work with social enterprises.

I asked a couple of the senior procurement people at the event how progress was going for them, and why it seemed to be taking a while for momentum to build. In summary, they made two points that explain what are probably the main barriers that need to be overcome.

The first is simply the “supply side” issue that there still aren’t that many strong social enterprises, particularly in some of the major spend areas for most corporates. So many of the firms are quite consumer focused – the well-known Belu Water, firms producing soap, chocolate and so on. Whilst these enterprises are increasingly looking to open up their own business channel, corporates will never spend billions on soap.

The second factor is getting the message across to internal users and budget holders within the buying organisations. It will come as no surprise to experienced procurement folk to hear that even if top management and procurement itself is fully behind “Buy Social”, the budget holders and other internal stakeholders have to be convinced. According to the folk I spoke to, it is not so much that this proves very difficult – it just takes time. And of course there have to be different messages depending on the situation.

In many cases, the social enterprise is no more expensive than the conventional alternative, so the “sell” is relatively easy. Peter Holbrook mentioned a PWC study that said in 52% of the cases considered, the social enterprise was more cost-effective than the previous supplier. But where there is a price premium, then clearly procurement has to explain why that is justified, either on quality grounds or because of some other benefit from that “doing good things” objective.

That first supply side issue may be changing in a manner that will help achieve the target, as social enterprise moves into new areas and become more focused on B2B as well as B2C routes.  We heard from the founder of Belu, which is moving into more business focused products and services in terms of both water and filtration systems. And the most fascinating of the short speeches came from the founder of Auticon, a firm that employs people on the autistic spectrum and carries out IT services for clients. There is huge scope for growth in that sector; more on that to come.

So if you would like to do something very worthwhile, that will help promote the wider benefit of procurement within your organisation too then do get in touch with Holbrook and his team at Social Enterprise UK here.

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