Embedding social impact into the heart of business
SAP’s Adaire Fox-Martin explains how social procurement could have orders of magnitude greater impact than corporate social responsibility programmesShow transcript
As society faces extraordinary challenges on an unprecedented scale, businesses on the forefront of solutions are putting purpose and social impact at their core. One way companies can do this is by working with social enterprises – businesses that direct at least 50 percent of their profits to a societal, environmental, or humanitarian goal. Adaire Fox-Martin is the Executive Board Member for Customer Success at SAP: she explains how SAP UK has started using ‘social procurement’ for some of its business necessities – and how SAP is making it easier for other companies to follow suit.
The New Economy: Adaire, why do corporates need to think seriously about integrating social impact into their core business?
Adaire Fox-Martin: I think we need to think about it seriously, Charlotte, because we actually don’t have a choice. If you think today about the stakeholders of a company, your customers are demanding this kind of approach. Your employees demand that you live the purpose of your company. And there are many major equity investors that are looking not just at the traditional KPIs of a business, but the type of societal impact that that organisation has.
The New Economy: One way to prioritise social impact is by partnering with social enterprises – what are social enterprises, and how big an impact can social procurement have?
Adaire Fox-Martin: A social enterprise will associate itself with an outcome that either has a phenomenal societal, environmental, or humanitarian impact. And at least 50 percent of their profits – in some cases it’s all of their profits – are directed towards that core mission outcome.
Now what’s social procurement? Regardless of what you do, all of us require indirect goods and services to actually operate our business. The paper for the printer, the coffee in the machines, the pens and pencils in the stationery cupboard. Very many social enterprises provide a range of goods or services that fall into this category.
Social procurement is the opportunity to redirect some of your spend – money that you’re spending anyway – to social enterprises. You can buy a ream of paper; or you can buy a ream of paper from a social enterprise whose profits go to educating young girls in Africa.
And it’s so interesting when you consider the impact that this can potentially have. Most corporates today have corporate social responsibility programmes. But for every one dollar that we spend on our CSR programmes, we spend $400 on the indirect goods and services it takes to run our business.
Last year we began a pilot programme in SAP UK. And within a very short period of time, we had redirected 2.5 percent of our spend on indirect goods and services to social enterprises, having a very significant impact on a wide variety of different societal and environmental issues. And we are inviting as many corporates as deem this a worthy cause to join us. Because we today run the largest business to business network. And we are onboarding social enterprises onto that network.
So if companies want to participate in social procurement, they have the opportunity, using this network, to locate social enterprises that are capable of providing the goods and services that they need. And they can do so knowing that their spend is having such a significant impact.