There is a growing “value-based” awareness among retail consumers, and now business-to-business purchasers are also deciding that their supply chain really has to reflect, and be integrated into their corporate social responsibility goals. Greenwashing isn’t allowable, and social values are required, both from investors/shareholders and stakeholders, employees, customers, and community partners.
However, if we do turn the sustainable development definition from a “no harm” basis to an opportunity-based premise, then our actions to fulfill this mandate change as well. This new model says that we will work with local producers “to create opportunities” for employment and inclusion of under-developed labour markets, locally and internationally, to support community development, wages, access to affordable housing, healthcare and food, and community self-reliance.[1] The ideal is moving from risk aversion to opportunity creation.
Changing consumer buying behaviour
Every business, nonprofit, and level of government purchases goods and services every day. This includes cleaning, catering, couriers, office supplies, IT, coffee, printing, maintenance and repairs, furniture, fuel, landscaping, and on and on. And within each of these purchases there are many choices from a broad variety of potential suppliers. Which criteria lead to the selection of the suppliers varies. Traditionally, purchasing decisions are based on lowest price for equivalent product or service. And recently, a stronger emphasis on avoiding negative environmental impacts has been added to many purchasing decisions.
What is not always considered in the choosing of a supplier, beyond the price point and negative impact screening, is what could be the ripple and multiplying result of that decision? Purchasing is not an isolated, cost-only decision. Intentionally or not, purchasing choices directly impact employment growth or decline, local and global economies, the environment, and every supplier and their community. The choice ripples along the supply chain, and not selecting a supplier has an impact on their business, and their suppliers. Do we need to look any further than the current USA “Buy Local” decision and its impact and reaction from Canadian and Mexican manufacturers and national governments to understand the connection?
When a purchaser makes purposeful purchasing decisions that blend economic, social and environmental impacts, they can directly and in a measurable and positive way influence the health and sustainability of communities.
However, moving to the use of purposeful purchasing in a business or organization requires the intentional creation of a supportive internal environment and the implementation of a strategy to achieve a blended value return on purchasing. As evidenced by movements such as Fair Trade and organic products, as more purchasers move to sustainable criteria, suppliers will move to meet their demands and requirements in order to get their business. Sustainable demand and supply relationships can create a powerfully beneficial supply chain.
Five steps for purchasing from social enterprises:
1. Build a purchasing framework the uses a “blended” purchasing criteria: price, quality, and social impact.
2. Work with your current suppliers to increase their engagement and partnerships with social enterprises.
3. Unbundle large contracts to make them accessible to social enterprises.
4. Create incentives, rewards, and measurements for social purchasing accomplishments.
5. Remember, it’s a cultural and behavioural shift that may take incremental steps toward a long term change.
David LePage is the program manager of Enterprising Non-Profits, enp, a unique collaboration of funders who provide support for social enterprise development. He is also a member of the Social Enterprise Council of Canada, and the Policy Council for Canadian Community Economic Development (CCEDNet).