Social procurement is the practice of corporations using their buying power to scale social businesses that have a social and/or environmental benefit. It is an effective strategy whereby corporations and social businesses collaborate with one another to create social impact outcomes while fulfilling their business needs. We interviewed Jaime Paiva and Alexandra Santos from Zurich Insurance Group (Zurich) to understand their experience with social procurement and Yunus Social Business (YSB). In this interview, we uncover the steps that Zurich is taking to implement social procurement in their organisation including the nuances of working with the local implementation of an international strategy, as well as ambitions for the future.
“Social procurement is fully aligned to Zurich's strategic sustainability ambitions.”
Why did Zurich start working on social procurement? What was the catalyst and how is it relevant to Zurich's larger corporate strategy?
Jaime: Our first steps into social procurement go back to 2015 in the UK. Zurich Municipal, which is part of Zurich UK and is focused on providing insurance solutions for the public and voluntary sectors, connected us with Social Enterprise UK (SEUK) and some social enterprises. Very soon, we realised social enterprises could be competitive on costs and quality and add value in the form of employee engagement or offering a superior account team to Zurich. Furthermore, social procurement is fully aligned to Zurich's strategic sustainability ambitions.
Why did you choose to partner with YSB?
Jaime: There are a few aspects that we value in this collaboration with YSB, but there are two in particular which are most important to us.
The first are their research and knowledge-building capabilities which has given us the possibility to do internal training across our teams through YSB’s Social Procurement Online Course. Because social procurement is such a new topic, it is essential that people in our organisation are given the tools and material to understand it and work with it. In that regard, we will make the Social Procurement Online Course available globally on our internal e-learning platform for all our teams to complete, and are offering it in English, German, French, Spanish and Portuguese.
The second thing which we value most in this collaboration with YSB is their organisation’s presence in Latin America, which is helping us to identify and work with social businesses in the region. Because Zurich is a multinational company, it’s important for us to be able to work with an organisation that can partner with us on both local and global levels. While the direction to move towards social procurement is a global initiative, the first steps of our implementation must of course be local, in this case in Latin America starting with Brazil.
Alexandra: Although Brazil has many development opportunities, contracting a social company takes time and effort. YSB has worked with us to understand our needs and demands, looking for companies that could become our suppliers and identifying potential partners aligned with our sustainable purposes. YSB was a crucial piece in connecting us as a corporation with the right social businesses.
What are some of the challenges you experience in social procurement from working with a global organisation that has local implementation? How do you overcome these challenges?
Jaime: The maturity level of the sector is very different from country to country. The UK was probably the first country to have specific legislation on this with the Social Value Act from 2012, and other countries are now following this path. To a certain extent we see the same maturity level on social procurement across our various country offices, and we’re working to close the gap quickly by applying the learnings from the more mature countries in other geographies.
In addition, we see many social enterprises with very promising products or services that unfortunately lack the readiness to work with a large corporation such as Zurich. This is where the local intermediaries and/or accelerators such as YSB play an important role by helping those social enterprises to become ready for a business-to-business (B2B) relationship with a large corporation such as Zurich.
Could you describe one social enterprise that you met and that inspired you the most?
Alexandra: It is hard to choose just one but in particular, I found the company Laboratoria very interesting. They focus on the inclusion of women in technology, empowering and technically enabling them to start a career and transform their lives. Initiatives like this help to improve gender equality, a value that is fully aligned with what we stand for as Zurich.
What's coming up for 2023?
Jaime: I’m very excited about our roadmap for this year. I see a greater interest coming from our business to embed social enterprises in our supply chain, and for this year we’re planning to:
Looking beyond 2023, we plan to support the Buy Social Europe project, which is a pan-European initiative led by Euclid Network that supports large companies seeking to engage with social enterprises. Looking at the horizon, we definitely want to build the expansion plan to work with more social businesses in more countries in 2024.
YSB is committed to social procurement as a crucial element for business as a force for good: It allows corporations to partner with social businesses in a business-integrated and strategy-aligned way.
Corporations are able to meet their purchasing requirements in a meaningful and social value-adding way through buying the products, services and materials they need anyway from social businesses. Corporate employees have the opportunity to interact with and learn from social entrepreneurs and integrate impact directly into their work.
For social entrepreneurs, stable commercial relationships with corporations can greatly support the financial sustainability of their businesses and help them to grow.
It’s a win-win: social procurement enables both parties to leverage on their strengths while meeting each other’s needs. With more than 60 percent of an average company’s ESG footprint within its value chain, social procurement is an incredible opportunity to go beyond compliance, risk-mitigation and “pure” CSR to create tangible social impact.
To learn more about social procurement, you can read YSB’s Social Procurement Manual here.
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