How can procurement help to advance the social value cause? Our thought leaders in the first Big Ideas panel tell us how.
In the first panel of the day, our delegates grilled our social value and sustainable procurement experts on how procurement can advance the social value cause, and help to bust some myths around social enterprises.
Timo Worrall, Senior Category Manager FM EMEA, introduced the work that Johnson & Johnson are doing with their Social Value through Procurement. The organisation is aiming to spend 3 per cent of its total spend in the UK with social enterprises by 2020, as well as creating 150 jobs for people who are furthest from the job market today.
Peter Holbrook, CEO of Social Enterprise UK, talked more about his organisation’s announcement of the ‘Buy Social Corporate Challenge’. 10 major global organisations, including RBS, Santander and J&J, will commit to spending £1 billion social enterprises by 2020.
Lucy Siegle, journalist and broadcast, expanded on her keynote around the true cost of supply chains, and how we can change our consumer behaviour to help make greater, global change.
- Do we think there is a shifting social attitude for social and sustainable procurement? – Tom Derry, ISM
Timo – Don’t assume that businesses aren’t interested in social value. We’re not involved to sell more products, it’s more about how we choose as an organisation to engage with our customers. The social value cause is larger than just a single programme, it’s part of a greater movement. I just hope that in 10 years we’re not talking about this as something new, but how we are all spending our money with social enterprises.
Peter – There is a new generation of products that people are getting involved with. I have a Fairphone – it’s the first smartphone in the world that is free from conflict minerals. It has a better spec than the iPhone, and it’s also half the price. The social value cause will also help organisations with recruitment and retention. Companies are realising that they need to make commitments, and make CSR part of their DNA, or millennials will go somewhere else to work.
Lucy – There is some aspirational research out there. Environmental and social value isn’t far off the idea of social consumers, but now there is more willingness to engage with brands. Companies can’t second guess the consumer wants, they need to be authentic and decide on their own values.
- In the procurement world, measurement is based on cost reduction. Social value is not incentivised in corporate procurement – are companies changing their measurements to account for social value? – Gabe Perez, Coupa
Timo – Procurement are second guessing their corporate stakeholders, and what their stakeholders want. We have much more engagement around social enterprises at J&J, and are opening up new conversations with business stakeholders. Cost is still paramount, but we’re conscious that there still needs to be social value.
Peter – There is a rapidly growing industry around integrated reporting, particularly in the accountancy profession. They realise that this reporting will have voluntary or mandatory adoption in the coming years. Public procurement is beginning to adopt the social value cause. If we can encourage public procurement to take this on, then we can change practices in the rest of the organisations around the world. The change just needs to be faster.
Lucy – We all have our parts to play. Taking something like how stock is traded, how do people have the time to understand the wider impact of the businesses involved in the trades, when everything happens in under 10 seconds.
- We work for a fundamentally corrupt profession. When we look at procurement across the globe, 30-40% of spend is lost through fraud and corruption. Where do you see the agenda going from fraud and corruption, to the social value agenda? – Chris Browne, The World Bank
Peter – There is a Social Value Innovation Unit at the World Bank, just so you know! One component of the change is transparency – businesses need to be rewarded for transparency, for airing their dirty linen, as well as the glossy CSR agenda. The fraud economy is bringing together an alliance of organisations, all of whom want to get transparency into supply chains. We’re not moving fast enough though.
Fortune will favour the bold and the brave in this – you will attract the best talent, and win more business by leading this agenda.
- There is a myth to bust that social enterprises cost more. How can we bust this? – Helen Mackenzie
Peter – Evidence has demonstrated that social enterprises out-innovate private sector, and are cheaper than them too, in 52 per cent of cases. The social value products are using materials that would have otherwise been discarded. Even my underwear is made by a social enterprise (Pants to Poverty)!
- What Big Ideas are there to introduce authenticity and accountability into the social value process? Alex Kleiner, Coupa
Timo – We use accreditation from the experts at Social Enterprise UK. You shouldn’t let it become a barrier to working with social enterprises – the story is much stronger than this.
Peter – Transparency, transparency, transparency is the key, we have to build it into the process. This is a road and journey that will be filled with challenges, but the future depends on it. Procurement are the new superheroes in this – they are the people who can deliver the sustainable procurement goals, and bring redundant materials into the supply chain.
Lucy – There will be mis-steps along the way. There needs to be more of a holistic view, right throughout the the supply chain. There is a lot more communication in the brand and the supply chain now.
Certainly an enlightening panel, with some very thought-provoking thinking from our experts (as well as finding out what kind of underwear our leaders wear…). Stay tuned for more from our experts, and more panel discussions, as the Big Ideas Summit 2016 progresses.