A mere 5% of new income from global growth reaches 60% of the world’s poorest. With the Covid-19 pandemic only exacerbating this dire state of affairs, SAP is determined to drive change through social procurement – a powerful lever to deliver immediate impact.
SAP has announced that it will be directing 5% of addressable procurement spend to social enterprises and to diverse suppliers by 2025. This initiative, named 5&5 by ‘25, invites organisations around the world to join SAP in buying more goods and services from purposeful suppliers.
But what is a social enterprise? Social enterprises are businesses culturally and operationally focused on changing the world. They are founded and governed on the basis of a clear social or environmental mission; they reinvest the majority of their profit back into this mission; and they are majority controlled solely in the interest of this mission.
A diverse supplier is a business that is at least 51% owned and operated by an individual or group that is part of a traditionally underrepresented or underserved demographic; such as women-owned, minority-owned and indigenous-owned businesses, among others.
SAP Executive Board member for Customer Success and Global Buy Social Ambassador for Social Enterprise UK – Adaire Fox-Martin – announced the 5 & 5 by ’25 initiative, emphasising that directing even just a small fraction of corporation spend to certified social enterprises and diverse businesses will help them tackle some of the world’s most pressing social and environmental problems.
“Every company in every industry needs to procure,” Fox-Martin said. “We all need soap in our washrooms, landscaping for our offices, food and drink in our cafeterias, marketing services and office supplies. These and many more are all products and services provided by social enterprises and diverse businesses. This is money we are spending anyway. Why not spend it with suppliers who are delivering social impact as well?”
SAP UK has already directed over £750,000 of its addressable procurement spend to social enterprises in the UK, so we’re already halfway towards meeting this goal. Social enterprises are worth around 3% of UK GDP and contribute £60 billion to the UK economy (three times larger than the agricultural sector). 5 & 5 by ’25 is an initiative that will enable SAP UK to extend its existing partnerships with meaningful organisations, as well as explore the possibility to direct further procurement spend to social enterprises and diverse suppliers.
At present, SAP UK has onboarded a variety of social enterprise vendors such as Change Please, NEMI Teas and BELU for office refreshments, WildHearts Group for office stationery, Tarem Services for pest control and The Social Supermarket and From Babies With Love for corporate and employee gifts.
“This commitment from SAP will no doubt give social enterprises around the world a huge boost, helping us all drive more positive social impact within our local communities,” said Cemal Ezel, Founder of Change Please CIC, an award-winning coffee company that is supporting people out of homelessness through Life Changing Coffee.
Change Please provides training, employment paying the Living Wage and support with housing, finances and therapy to help people experiencing homelessness move forward. 100% of its profits go towards ending homelessness. “We have built a solid relationship with SAP and if we can leverage more platforms like Ariba Network that can support us with our procurement and our sales, we can reach an audience we wouldn’t normally be able to reach. Then fundamentally it’s going to help us to save money and have more impact in our day-to-day,” added Ezel.
“The pledge from SAP to grow its procurement spend with social enterprises recognises the value this sector can add to business as well as the positive social value each social enterprise creates,” said Jamie Palmer, Founder of Social Supermarket, the largest online marketplace for social enterprise products in the UK.
Social Supermarket was created to connect every-day consumers with social enterprises who sell high quality products that tackle important social and environmental challenges. From handbags made from decommissioned fire hoses, soap made by people with visual impairments or relishes made with wonky fruit and veg, it features over 750 products from 75 purposeful brands. “We have witnessed over 500% growth in sales during the last six months, especially companies sending employees gift boxes and this announcement by SAP gives us a huge boost of confidence for the future of the sector,” added Palmer.
“From Babies with Love helps SAP solve a commercial challenge: engaging colleagues on parental leave, contributing to SAP’s talent strategy,” said Cecilia Crossley, Founding Director of From Babies With Love, a unique social enterprise baby brand that funds the care of orphaned and abandoned children around the world by donating 100% of its profits from the sale of premium, organic baby clothes.
“Our social enterprise model, donating 100% profits to vulnerable children, is intrinsic in the value we add, the engagement our gift service creates; this is what I love so much about social enterprise – when social enterprises supply businesses with the goods and services they need and already spend money on, the partnership creates also social change. SAP is market leading in its approach and I’m extremely proud that From Babies with Love is one example of SAP’s achievements.”
“The thought-leadership and genuine desire at all levels in SAP to produce significant and tangible social impact outcomes from its procurement spend is exemplary,” said Colin Downie, Sales and Partnership Director at WildHearts Group, a portfolio of companies that, through their activities and profits, create global social change.
“Not only has SAP achieved many noteworthy results from onboarding social enterprise suppliers in a short space of time, by getting deeply involved in the global social enterprise sector alongside exerting significant influence on their own customer base, they have galvanised thousands of influencers across their global network to take action and shape the future of procurement towards maximising social impact outcomes permanently. WildHearts is delighted to be standing alongside them to help achieve this shared impact goal for the communities in which we all operate.”
“In my many years in working in procurement I have never felt as excited or prouder of what procurement can achieve when we look beyond the normal measures of price, quality, service and performance,” said Kelvin Ward, Purchasing Manager at SAP UK. “In my opinion, working with social enterprises is without doubt the best example of “Procurement with a Purpose”. What we have achieved in SAP UK with the number of social enterprises we have onboarded is just the beginning. What we, and the wider industry, can all achieve by simply changing our suppliers is limitless!”
SAP is the official technology partner for Social Enterprise UK and is also part of the Buy Social Corporate Challenge, which has already led to a total of £91,545,356 collectively spent by corporate buyers since it was launched at Number 11 Downing Street four years ago. The number of businesses who have signed up to the challenge has risen from 7 to 24, representing a broad section of the economy from high-profile construction and facilities management companies, to leading lights in the healthcare, tech and professional services industries.
Some of the leading companies that are forging the Buy Social change include Amey PLC with its aim to achieve 5% of addressable spend going to social enterprises by 2023, Foodbuy with its focus on pushing social enterprise further into the food and drink sector, Johnson & Johnson with its six-year track record of buying social and Nationwide Building Society with its success in collaborating with strategic providers on social procurement.
As part of our partnership with Social Enterprise UK, the SAP Commerce Cloud platform is powering its Buy Social Directory; the “Google” for those who want to use their spending power to help build a better world. The Buy Social Directory allows consumers to search for social enterprises by geography, location, product area, and social /environmental mission so they can find social enterprises working on the causes they care about or those in their neighbourhood.
SAP is also offering a growing range of packaged marketing services from social enterprises on its DMSB XTRA online partner marketing store, which provides an exclusive online shopping experience for SAP Partners who are looking for innovative digital-first marketing solutions. This will provide these social enterprises reach a new audience of 540 partners from 45 countries, and every package purchased – using Market Development Funds (MDF) where applicable – will help these businesses carry on creating a positive social impact while providing high-quality digital marketing services to drive business success.
SAP continues to support businesses that are changing the world for the better and now, employees can easily support them too. Not only are we setting this 5&5 by ’25 target for ourselves, we are inviting our ecosystem of customers and partners to do the same. Together, we can transform industries, grow economies, lift up societies, and sustain our environment.