Australia: You don't have to be a corporate giant to do social good - a corporate responsibility procurement strategy

The procurement of goods and services is a reality in any company, regardless of size. Businesses that incorporate corporate responsibility (CR) into their procurement strategies not only enhance their ability to do social good but may increase their business competitiveness.

Social procurement strategies led by public sector

Many social procurement strategies that have been successful in Australia have been undertaken by local and state government. One such programme has been undertaken by the Victorian Department of Human Services (DHS).

With a spate of crime and violence in housing estates in deprived inner city Melbourne, the DHS partnered with the Brotherhood of St Lawrence, rather than outsourcing its security services, to offer concierge employment to residents of the estates, who before the scheme experienced a 95 percent jobless rate. The residents were given 12 months of employment with the chance of continuing upon completion. The scheme now goes to tender and offers twenty roles, and 80 percent of those employed go on to find work in the wider job market. The enterprise is also credited with fostering a greater sense of safety and community pride.

Long Street Coffee promotes coffee with a conscience

As well as in government, a number of effective social procurement programmes have been developed in small and medium enterprises (SMEs). Collaboration between SMEs, community organisations and charities can promote benefits at the grassroots level, as well as for the business, offering employment to disadvantaged groups who would normally otherwise miss out. A striking example of this cooperation is the employment of refugees at the Long Street Coffee in Melbourne.

A partnership between café owners Jane and Francois Marx, the Brotherhood of St Lawrence and the Asylum Seeker Resource Centre, the scheme offers employment to refugees who normally suffer significant hardships in finding employment. Rather than focusing purely on the bottom line, the café owners recognised their procurement of labour as a potential tool to make a difference to marginalised jobseekers.

According to Melbourne City Council's economic development chair, social enterprises are reinvigorating the city's economy, with a raft of similar schemes operating, including a similar scheme where indigenous hospitality students are employed by a restaurant in Fitzroy. The Long Street Coffee social enterprise has proven popular, with the distinct advantage of adding diversity to the economy. Put simply, social procurement allows your business to stand out, while doing good.

Procuring goods from a responsible source can transform lives

SMEs can also make a difference by sourcing goods in a socially responsible way. A celebrated example of this is the New Zealand-based company All Good Organics, which sources fairtrade bananas to sell on, and also makes the Karma Cola drink which is made from cola nuts sourced from a village in Sierra Leone. All Good Organics offers a continuing monetary commitment to the village with each bottle of cola sold. Since winning Fairtrade International's "Fairest Fairtrader" award, some 60,000 banana bunches are now sold every week in New Zealand alone and sales of Karma Cola have rocketed. This demonstrates the transformative power of social procurement for the business, as well as for the villagers.

Focusing on social good can increase business competitiveness

Despite the more limited purchasing power of SMEs compared to large corporations, effective social procurement decisions can have a significant positive impact at a grassroots level, and these benefits work for the community and business alike. Rather than reducing business competitiveness by focusing on social good over what is necessarily the cheapest option, the opposite is in fact true. The appetite for socially responsible and ethical causes means lucrative business opportunities for SMEs; research indicates that 80 percent of Australians are more likely to purchase goods and services from a business that incorporates CR strategy into its procurement practices.

For further information, please contact:

Daniel Creasey
Corporate Responsibility
Colin Biggers & Paisley

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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