Why your business needs social enterprises

29 August 2014

A guide to selecting suppliers that will deliver a triple bottom line and open up supply chain opportunities for your business.

What is a social enterprise?

Many people think that social enterprises and charities are basically the same thing, but they’re actually very different.  Whilst a charity operates through grants and donations, a social enterprise acts like any other private business, selling goods or services in competitive markets. 

It’s what happens after this that separates a social enterprise from its privately owned competitors – instead of the profits going into the owner’s or shareholders’ bank accounts, they are instead used to fund a social mission. So, at Newground, we gift aid all our profits at year end to our Group’s charity, Newground Together.  The charity then distributes them in the form of grants to charities and community groups that are delivering projects that match our social mission.

The number of social enterprises in the UK has been growing pretty quickly, with the latest figures showing there are around 70,000 of them in the UK.  Clearly there are plenty of customers out there who choose such organisations over their private sector competitors.  But why?

Why are more and more businesses choosing social enterprises as suppliers?

  • Social enterprises offer the same level of quality in their services/goods as any other business so there’s no issue with standards of delivery or production.  Our company is even certified to ISO 9001, ISO14001 and OHSAS 18001 (which very few of our competitors can boast of) which highlights how organisations such as ours can even surpass expected standards.
  • Many larger companies are now asking their suppliers to demonstrate their environmental and social credentials on tender applications.  Sometimes they even specify that the winning supplier must work with social enterprises as part of the contract.  If a company is already working with a social enterprise supplier, they’re using this information to gain competitive advantage in their tender application.
  • Local authorities now also have to comply with the Social Value Act (2012) which requires them to consider the economic, social and environmental wellbeing aspects of any contract.  Showing them that you’re using social enterprises as part of your supply chain could help you win more public sector contracts because you’ll be helping them evidence their compliance.
  • There’s a growing trend for companies to produce Corporate Social Responsibility Reports and sustainable procurement policies and working with social enterprises provides a weighty contribution to these.  The great thing about this is that it’s actually cost the company nothing – they’ve merely selected one supplier over another.  So, companies who use Newground to maintain the landscaped areas outside their offices can actually include this in their annual report because it shows they’re supporting social enterprise.
  • Another reason businesses choose social enterprises is because it’s just the right thing to do. We’ve all heard of carbon footprints but all businesses also have social footprints too. Every company’s activities is going to have an impact on society - locally and nationally - and working with social enterprises helps to reduce this social footprint.

How to find a social enterprise.

There are several directories of social enterprises in the UK, which are all categorised by type of service or product, so they’re pretty easy to use.

If you can’t find what you’re looking for there, you can also send a tweet to @SocialEnt_UK and include the hashtag #buysocial.  The Social Enterprise UK team will help you find the supplier you want.

What should you do now?

  • Take a look at your current suppliers – are there any products or services that you could buy from a social enterprise?  Use the above directories to check.
  • Next time you’re selecting a supplier, check the directories again.  If you’re  a larger company and issue tender documents, make sure there’s a space for businesses to say if they’re a social enterprise.
  • Spread the word amongst the rest of your colleagues with procurement responsibilities.
  • Get the ‘We Buy Social’ badge from Social Enterprise UK to show your customers and stakeholders that you buy from social enterprises.  For more information, you can contact Social Enterprise UK’s business team on 020 3589 4950 or email business@socialenterprise.org.uk.
  • Don’t forget to record your activities with social enterprises.  You can use the information in your annual report, CSR report and to evidence your sustainable procurement activities.  It’ll also give you competitive advantage in tender documents, especially if you’re bidding on public sector contracts.

Further information

If you want to know more about social enterprises and how to get involved, here’s a really great video from Social Enterprise UK.

 



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