First-hand Report on Social Procurement Talks at Davos

Social Procurement

Peter SmithUK-based Peter Smith, Managing Director at Procurement Excellence Ltd. reports that “unfortunately, my invite to this week’s World Economic Forum from Obama, Bill, and my other billionaire / political leader friends did not materialise.” But he did get invited to tune in virtually to a panel discussion held at Davos with Yunus Social Business (YSB), titled “The Opportunity of Social Procurement”, and held in partnership with Boston Consulting Group (BCG) and software leaders SAP, amongst others. Here follows his first-hand account of the experience as well as fascinating predictions about Africa.

If you aren’t familiar with the terminology, “Social Procurement”, it is the practice of buying products or services from ventures that primarily follow an environmental or social impact agenda (social enterprises). Social enterprises drive diversity (95% of them directly benefit marginalised or vulnerable groups) and support the United Nations SDGs (75% of them tie their impact directly to the SDGs).

Before we discuss some of the insight from the discussion, I want to stress that if you have any interest in the “social” side of ESG in a procurement context, you should check out Yunus. Founder Prof. Muhammad Yunus won a Nobel Prize for his micro-finance innovations, and the YSB mission is “growing and supporting social businesses to solve the world’s most pressing problems”. Their approach is very structured, logical and business-like, and with an impressive range of collaborators, they are building an impressive bank of information and good practice that can assist organisations who want to have impact in this space.

Anyway, back to the Davos session. It was an impressive panel – including for instance Judith Wallenstein, who leads Boston Consulting Group’s CEO Advisory practice in much of the world. There was a small live audience too, and after the panel we were placed into small groups for a further virtual discussion session, which was good too; I got to chat with Andy Daly from Social Enterprise UK and Beate Rosenthal from consulting firm Berger.
Really, there was enough material from the session and our subsequent discussion to write a follow-up to “Procurement with Purpose”! The links that were provided during the session were particularly useful and pointed to further reading and information. Some related to success stories, such as Industree Foundation, established in 2000 to tackle the root causes of poverty by creating an ownership-based, creative manufacturing ecosystem for women micro entrepreneurs.

It has tripled the incomes of women in non-farm occupations by leveraging their artisanal skills and integrating them into the creative industries sector. Industree has reached 30,000 women artisans across India and Africa, with collaborative efforts with organisations like The Future group, IKEA, The Commonwealth Secretariat, Grassroots Business Fund and National Skill Development Corporation.

Perhaps the most stunning point for me from the session was this. By 2050, one third of global 15-24 year olds will be living in Africa. That continent will decide the success or failure of the world in my daughter’s lifetime, with Africa potentially the engine for a sustainable, successful future for the human race. Equally, you can imagine the issues if the continent becomes a massive source of economic failure, war or climate change-related tragedy … not least the number of refugees potentially heading for Europe. And social enterprises can be an important way for Africa to develop economically and to help address social challenges.

There was also discussion of the complexities which procurement professionals (and others) need to be aware of if they arise in this area. For instance, buying organisations have rightly tried to eliminate “child labour” in their supply chains. But if there is a social enterprise that supports women in Africa or Asia to become more successful, and those women get their kids to contribute a few hours of labour each weekend to their start-up business … is that really wrong? (Aged about 11, I helped my aunt and uncle when they bought a small newsagent shop in Philadelphia, near Sunderland. I didn’t feel I was being exploited, I loved it, but unfortunately, they proved to be the world’s worst newspaper shop owners…!)

Back to business. A new report was also “soft-launched” by YSB this week, co-authored with SAP and consulting firm BCG. The document available here now is a “taster” for the full report, which will be launched at the Sustainable Development Impact Summit of the World Economic Forum later in 2022. But even this short summary gives some useful insight into why social procurement makes sense, as well as considering some of the hurdles and how they can be addressed. I’ll have a look at it and probably come back with more from it here next week.

By Peter Smith, Business Author, Managing Director at Procurement Excellence Ltd, founder of the Procurement with Purpose initiative. Top 25 thought leader in Procurement and in Supply Chain, top 50 in Sustainability.

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