Social Procurement

Have you received a prequalification package or even a vendor enrollment form for EFT payments from a client and were asked to indicate your social procurement status?

Social procurement is growing among organizations looking to have a positive social impact while also meeting their business goals. Social procurement is becoming more important for major clients by helping to mitigate social and environmental risks.  

Today we're talking about social procurement in high-risk industries. We'll explain the various organization types and where they fit in the bigger picture.  

What is Social Procurement?

‘Leveraging money that would already be spent on contracts by government, private companies, or non-profits to also further a social good’. This often involves buying contracts for goods and services from social enterprises with eh intention of making a positive social impact (such as job creation for a historically disadvantaged community).’ Source: David LePage - Buy Social Canada

‘Social procurement is not an added cost but an innovative adaptation of current procurement processes to achieve broader public policy goals. Goods and services are still purchased through a competitive and transparent bidding process, while added value is sought by including social impact criteria as part of the bid evaluation process. Social procurement can be an integral element of infrastructure and other major development projects'. Source: momentum.org

Social Procurement Organizations Explained

Coming up, information about:

• B corporations,

• Registered Indigenous Businesses,

•  Certified Aboriginal businesses,

• Certified Social Enterprises,

• Registered Charities, and

• Provincial Not-for-Profit corporations.

B Corporation Certification

B Corporation, or B Corp, is a private certification earned by for-profit businesses that meet specific social and environmental standards. To receive B Corporation certification, a company must meet rigorous criteria related to its environmental impact, its treatment of employees and suppliers, and its contribution to the community.

B Corporation certification is becoming increasingly popular in high-risk industries because it can help companies to demonstrate their commitment to social and environmental responsibility. Contractors certified as B Corporations are also attractive to large clients because they provide transparency and accountability that can help mitigate social and environmental risks associated with these industries.

B Labs, a global non-profit corporation, confer B Corp certification. While B Lab certification has no legal status, it also imposes no additional legal liability. Certification can be a powerful corporate branding tool. Participants typically benefit from a product and services discounting program exclusive to fellow members.

Registered Indigenous Businesses

Registered Indigenous Businesses are businesses that are owned and operated by Indigenous people. These businesses are often created to provide economic opportunities and support for Indigenous communities. Registered Indigenous Businesses can include many businesses, including maintenance and construction companies, energy producers, and support service providers.

In high-risk industries, there is a growing recognition of the importance of engaging with Indigenous businesses. This recognition is driven by a desire to build positive relationships with Indigenous communities and recognize the value that Indigenous businesses can bring. By working with Registered Indigenous Businesses, companies can help to support economic development and provide training and employment opportunities for Indigenous people.

Certified Aboriginal Businesses

Certified Aboriginal Businesses are similar to Registered Indigenous Businesses, but they are certified by an independent organization. To receive certification, a business must meet a set of criteria related to its ownership, control, and management by Indigenous people. Certified Aboriginal Businesses are often seen as promoting economic self-sufficiency and self-determination for Indigenous communities.

In high-risk industries like industrial plant maintenance and logistics, there is a growing recognition of the importance of working with Certified Aboriginal Businesses. This recognition is driven by a desire to build positive relationships with Indigenous communities and promote economic development. By working with Certified Aboriginal Businesses, companies can help to create opportunities for Indigenous people and build positive relationships with these communities.

Certified Social Enterprises

Certified Social Enterprises are businesses created to have a positive social or environmental impact. These businesses are often structured as non-profits or cooperatives, and they reinvest their profits into their social or environmental mission. For Certification, a business must meet a set of criteria related to its social or environmental impact and financial sustainability.

In high-risk industries like trucking and railways, there is a growing recognition of the importance of engaging with Certified Social Enterprises. This recognition is driven by a desire to have a positive social or environmental impact and to support businesses working towards a social or environmental mission. By working with Certified Social Enterprises, companies can help reinforce positive social or environmental outcomes while meeting their business goals.

Registered Charities

Registered Charities are organizations created to have a charitable or public benefit purpose. These organizations are often structured as non-profits and receive tax-exempt status from the government. Registered Charities can include various organizations focused on social or environmental causes.

In high-risk industries like oil & gas production, there is a growing recognition of the importance of engaging with Registered Charities.

This recognition is driven by a desire to support organizations working towards a positive social or environmental mission and demonstrate a commitment to corporate social responsibility. By working with Registered Charities, companies can help support a wide range of social and environmental causes while meeting their business goals.

Provincial Not-for-Profit Corporations

Provincial Not-for-Profit corporations are organizations incorporated under provincial or territorial legislation and operate as non-profits. These organizations can include various organizations focused on social or environmental causes, industry associations, and trade organizations.

In high-risk industries mining and manufacturing, there is a growing recognition of the importance of engaging with Provincial Not-for-Profit corporations. This recognition is driven by a desire to support organizations working towards a positive social or environmental mission while engaging industry associations and trade organizations to promote best practices.

Large Client Procurement and ESG

There are several reasons why large clients in high-risk industries favor social procurement organizations. First, social procurement organizations can help companies to demonstrate their commitment to social and environmental responsibility. By working with organizations with a strong social or environmental mission, companies can demonstrate to their stakeholders that they are committed to making a positive impact.

Second, social procurement organizations can help to mitigate social and environmental risks associated with high-risk industries like construction and energy production. By engaging with organizations working towards a positive social or environmental mission, companies can help ensure that their projects are carried out responsibly and sustainably.

Third, social procurement organizations can help companies to build positive relationships with Indigenous communities and other stakeholders. By working with organizations owned or operated by Indigenous people or focused on social or environmental causes, companies can help build trust and goodwill with these communities.

Case studies

One example of social procurement in action is the Canadian Council for Aboriginal Business's Supply Change initiative. This initiative aims to connect Indigenous businesses with large corporate buyers, focusing on construction and energy production industries. The Supply Change initiative has helped to create new opportunities for Indigenous businesses. It has helped to build positive relationships between Indigenous communities and corporate buyers.

Another example is the Social Procurement Framework developed by the City of Vancouver. This framework requires city contractors to meet certain social and environmental criteria, including the use of Certified Social Enterprises, Registered Charities, and other social procurement organizations. The Social Procurement Framework has helped to promote positive social and environmental outcomes in the city while also meeting the city's procurement needs.

Conclusion

ESG-focused procurement is increasing in high-risk industries. Companies can demonstrate their commitment to social and environmental responsibility by implementing ESG policies and aligning with or supporting other social procurement organizations. Social procurement is an essential tool for companies looking to have a positive social impact while also meeting their business goals.