Empowering positive change through social enterprise procurement

18 April 2024

One of the main differences between co-operative and mutual enterprises and investor-led models is the importance the co-operative and mutual movement places on putting people, not profit, at the centre of business practices. Co-ops and mutuals have a genuine concern for ESG matters, and one possible strategy to deliver on ESG commitments is through social enterprise procurement – which simply means using a certified social enterprise for goods and services.

Understanding social enterprise procurement

Social enterprise procurement is not only about sourcing goods and services – it’s about creating social impact through purchasing practices. Diverting some procurement spend to social enterprises is one of the best levers for organisations to deliver the ‘S’ in ESG.

Social enterprises are businesses that exist to create a fairer and more sustainable economy. They do three things:

1. Exist for a social or environmental purpose.
2. Earn most of their revenue from trade.
3. Reinvest into their purpose so that public/community benefit outweighs private benefit.

The role of Social Traders

Social Traders is the leading intermediary in social enterprise procurement and the only certifier of social enterprises in Australia. Certification protects against “social washing”, and capability-building services for social enterprises ensure a strong base of social enterprise suppliers.

Social Traders run the Social Enterprise Finder – the only national directory of certified social enterprises by various regions and categories.

There’s a growing trend towards social enterprise procurement. In FY23, according to the Social Traders Impact Report, business and government buyers demonstrated their commitment to social enterprise procurement by spending $237.2 million with certified social enterprises – contributing to the remarkable six-year cumulative total of $843 million.

Complementing First Nations business procurement

A First Nations business can also be a social enterprise. While First Nations business procurement focuses on supporting First Nations-owned enterprises, social enterprise encompasses a broad spectrum of businesses that support various beneficiary groups such as marginalised women, people with disability, refugees and asylum seekers and many more.

There are synergies between social enterprise procurement and the First Nations business procurement facilitated by Supply Nation. By joining Social Traders alongside a Supply Nation membership, you can maximise the depth and breadth of your purchasing impact and foster supplier diversity, which supports diversity, equity and inclusion in your organisation.

Start buying from certified social enterprise

Partnering with Social Traders offers an opportunity for organisations to transform their procurement into a force for good, allowing them to lead by example and demonstrate the power of social enterprise procurement in driving positive change. Contact Social Traders to learn more.