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28 June 2017 | By Rachel Woolliscroft, Community

Why it pays to buy social

Wates Group sustainability director Rachel Woolliscroft has been gathering evidence that shows there’s a commercial value to procuring from social enterprises as well as a community benefit

Business can be a real force for good, and we shouldn’t be afraid to say so. For the past five years, the Wates Group has been dedicated to integrating social enterprises into its supply chain. As one of the founder partners of the Buy Social Corporate Challenge – a drive for businesses to spend £1bn with the SE sector by 2020 – we’re committed to working with social enterprises wherever we can. We set a target to work with at least one such organisation on every project we manage.

Why do we do it? Because we’re committed to making a real difference to the societies in which we work. But we also do it because it makes sense commercially.

Social enterprises are businesses that trade for profit, but reinvest any earnings back into a social or environmental purpose. They can be anything from recycling firms to transport operators, media companies, conference venues, caterers and hotels – the sectors they operate in are as wide and various, as with any other type of business.

The growing importance of social enterprises was acknowledged last year when the government launched the Inclusive Economy Unit, which aims to encourage private firms to engage with “profit for purpose” organisations. By using social enterprises in their supply chains businesses can play an important role in supporting the growth of organisations that tackle some of society’s most pressing problems – such as homelessness, unemployment and drug abuse.

Wates is targeting spend of £20m before the end of the decade with social enterprises and spent more than £2m with social enterprises last year. To support us in our 10-year goal we commissioned the consulting arm of the New Economics Foundation (NEF) to examine our working relationship with social enterprises. NEF’s report compares and contrasts responses from both social enterprises and commercial businesses in our supply chain to demonstrate what is working well, and where we need to improve.

NEF found that the social value generated from us buying products and services from social enterprises within our supply chain is 77 per cent higher than that generated by working with commercial businesses. Or, put another way, for every £1 we spend with a social enterprise, £1.77 of social value is created. This social value can come in the form of reduced unemployment, lower crime rates or improved standards of health and wellbeing. The report also identified that social enterprises tend to be more inclusive and diverse than their commercial equivalents, even at leadership level.

There is always more that companies can do to improve their relationships with social enterprises, allowing the sector to become more efficient and successful. The report makes a number of recommendations, for example, encouraging project managers to trade with social enterprises. We will certainly be learning from these suggestions at Wates to improve our own relationship and maximise the mutual benefits.

We hope that NEF’s insights can help others learn from our experience and provide a multiplier effect that will boost the sector exponentially and help tackle some of society’s biggest problems, while also building stronger local economies and more sustainable communities.

Find out more about how your business can get buy from social enterprises.

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