At this year’s Globe Series conference, SAP Labs Canada Chief Operating Officer Agnes Garaba represented SAP’s market-leading stance in social procurement. During her session, Leverage Your Purchasing Power: Procurement to Build Back Better, she helped the audience explore both why and how social procurement creates holistic economic, social, and environmental impact.
Every purchase has an economic, environmental, and/or social impact — whether intended or not. Social procurement is the practice of bringing together buyers with suppliers that not only have a quality good or service, but one that delivers on the promise of social and/or environmental impact. Often, these intentional positive contributions are reinvested into the local economy and add to the economic equity and vibrancy of the community. Social enterprises are business that practice social procurement as part of their mission to culturally and operationally change the world. They are founded and governed based on a clear social or environmental mission and they reinvest most of their profit back into this mission.
SAP understands the importance of prioritizing social procurement. As Garaba noted: “Seventy-seven percent of the world’s transactions run through an SAP system. It puts us in a unique place to have the opportunity, and also the responsibility, to drive positive changes. SAP’s social purchasing strategy began more than a decade ago with the inclusion of social enterprises in our Canadian supply chain. Today, our global ecosystem of partners focused on scaling social procurement, in addition to those inspiring new ideas and accelerating social ventures, collectively impact more than 1 billion beneficiaries across the globe.”
The commitment of SAP’s social procurement implementation is a two-pronged approach. The first relies on an initial top-down mandate, with executives and the Board supporting it, including putting resources behind it. The other aspect is, as Garaba explains, “a bit of a grassroots approach. We have established a ‘Procurement with Purpose’ ambassador network; these are people both within the procurement organization and others who are also making strategic buying decisions. They are the multipliers and they are the ones who help the organization identify opportunities for positive change.”
Sustainable procurement has been a central part of the public sector agenda for some time, which is game changing since Canadian governments alone spend $200 billion on procurement. It is also gaining traction in the private sector, as businesses recognize that integrating social value into purchasing and supply chain decisions makes them more competitive and sustainable. SAP has a demonstrated commitment to scaling the sector through social procurement. Notably, SAP launched a 5 & 5 by ‘25 initiative, aiming to spend five percent of addressable spend with diverse enterprises, which are defined as businesses that are at least 51% owned and operated by an individual or group that is traditionally underrepresented, and social enterprises by 2025, and encouraging organizations across industries to join the pledge.
SAP and Buy Social Canada
SAP co-innovates and co-develops programs with corporate social responsibility (CSR) partners, accelerating change and driving sustainable impact. Beyond internal commitments and Procurement with Purpose ambassadors, SAP fosters social procurement in partnership with social enterprise and social procurement intermediary Buy Social Canada, supporting the development of social procurement across the country by working to connect buyers to certified social enterprise business sellers, unleashing the biggest untapped potential to create sustainable impact in our communities and for the planet.
Buy Social Canada and SAP are working together to advance the social enterprise sector in Canada by collaborating on initiatives, like the Buy Social Pledge, that deliver better access to markets and buyers, as well as creating opportunities for employees to engage in growing the capacity of local social enterprises. One of the barriers preventing large-scale social enterprise investment is that social enterprises are often small businesses, thus lacking the capacity to be providers for large, multi-national companies like SAP. SAP has implemented a pro bono volunteering program to help build capacity for social enterprises, understanding that they need to grow to become true procurement partners.
“If you don’t start small, there is no way to build capacity. Small steps but consistent steps will lead much further than trying to do really big leaps,” Garaba notes.
Working with MovingWorlds, SAP launched the Sustainable Growth of Revenues for International Development (S-GRID) program. The program recently acknowledged as an honorable mention for Fast Company’s 2021 World Changing Ideas, helps social enterprises build revenue partnerships with the corporate sector to become more integrated into global value chains.
Within the SAP existing procurement spend and purchasing power, the potential for change is massive. With increasing focus on consumerism, it is important to buy and sell responsibly. Where can doing good coincide with doing good business? With time, the hope is that by buying goods and services from organizations with a purpose-driven mission the cycle of good is perpetuated.
Although there is a growing interest from corporations like SAP to “buy social,” the current supply is not strong enough to meet the global demand. As a result, we work with organizations like Buy Social Canada and invest in programs such as MovingWorld’s S-GRID to help ensure that more enterprises around the world are procurement-ready and can sustainably grow their revenue streams.
This is not an overnight process. SAP has spent more than a decade accelerating and scaling the work of social entrepreneurs and it is only the beginning. SAP will continue to diligently invest in this for the foreseeable future; in 2021 specifically through partnerships and collaborative work with a continued focus on capacity-building ventures within the sector and expanding access to markets and buyers.