Saskia Bruysten co-founded Yunus Social Business (YSB) together with Nobel Peace Laureate Prof. Muhammad Yunus. YSB Funds invests in social businesses in developing countries with affordable financing and growth support. Its portfolio of social businesses provides employment, education, healthcare, safe water, and clean energy to over 17.8 million people worldwide. YSB Corporate Innovation partners with established corporations to help them use their core competencies to address social problems. Together with the World Economic Forum she co-initiated the COVID Alliance for Social Entrepreneurs spanning 80 leading impact-first organizations and networks. Bruysten was appointed to the EU Commission’s expert group on social business and has advised on Ban Ki-Moon’s UN MDG Advocacy Group as well as Richard Branson’s B-team. Prior to YSB, Bruysten was the Co-CEO of the Grameen Creative Lab and a management consultant at BCG in Munich and New York. She holds an MBA from the European Business School in Germany and an MSc in International Relations from the London School of Economics and Political Sciences. Bruysten recently spoke to The Innovator about how corporates can help fulfill their ESG goals through social procurement, the practice of buying products or services from ventures that primarily follow an environmental or social impact agenda.
Q: At the World Economic Forum in Davos Yunus Social Business and BCG launched a report entitled A $500 Billion Market Opportunity For Real Impact. What are the key takeaways of the report?
SB: During the COVID pandemic, 71% of supply chain managers were already actively reshaping their supply networks to bolster resilience. Social procurement can be one measure to increase resilience in supply chains, and it could additionally lead to benefits such as an improved brand reputation. Procurement budgets worldwide amount to trillions of dollars for things like water, coffee, paper and cleaning products. Even a 0.1% spend on social businesses could achieve a multi-billion-dollar impact. The argument is you are spending the money anyway, why don’t you use part of that budget for social business? So much of the focus on supply chains is around carbon emissions but we need to take the social implications into account as well.
Q: What was the reaction to the report in Davos?
SB: We had a session about this in Davos that involved SAP’s Chief Sustainability Officer, BCG and AmaliTech, a social enterprise that harnesses the potential of remote working to build the future of work in sub-Saharan Africa. It resonated very well with the people in the room. What I am seeing now in discussions about ESG is that corporates are taking responsibility for their role in climate change and committing to reduce their emissions to Net Zero but when it comes to the social dimension of ESG- the S – a lot of companies are still trying to crack that. They don’t know how to do it at scale. The S is also important because the S in ESG can impact the E – environment. A concrete example is if you don’t ensure that people have better incomes what are they are going to do? They will chop down trees if they don’t realize they could make more money from selling the fruit. Economics and climate change are incredibly interlinked. People are beginning to realize that this is an interesting lever to pull. There was a lot of interest expressed in social procurement in Davos. I easily had 30 meetings with companies who said they would like to follow up.
Q: Isn’t it hard for corporates to connect to social businesses? They are not usually part of their supplier network.
SB: Members of the World Economic Forum’s Global Alliance for Social Entrepreneurs are helping with this. Acumen, for example, has published a list of 100 social entrepreneurs ready for corporate partnerships. The Social Enterprise World Forum has initiated a community of practice for procurement managers. Euclid Network and its members are engaging companies in #BuySocial campaigns in Europe. Moving Worlds partnered with SAP, TRANSFORM, and Unilever to launch the TRANSFORM Support Hub, a platform that matches social enterprises with pro bono consulting sup port from companies. AB InBev is running its 100+ Accelerator to support social entrepreneurs with access to value chains. YSB has initiated the Unusual Partners program to match relevant social entrepreneurs to corporate partners. We now have an offering for corporates who want to do social procurement, they tell us their needs, we tell them which categories are possible and then we find them social business entrepreneurs to fit their criteria. We have our own database and some of our partners-also have a critical mass of social businesses that can sell their products and services at significant scale. We also do trainings with procurement teams to create awareness and teach them what social business is and what criteria they should use to evaluate whether a business fits into that category
Q: Can you point to some examples of companies that have started to embrace social procurement?
SB: Barclays, EY, IKEA, Johnson & Johnson, Natura, SAP, Suez, Unilever and Williams Sonoma, are among the companies who are stepping up. SAP has pledged to direct 5% of its addressable procurement spend to social enterprises and inclusive businesses respectively, by 2025. It is, for example, buying local cleaning services from an enterprise in the UK run and owned by immigrants. IKEA has set an ambition to create 95,000 procurement jobs through its collaboration with social enterprises. It is already sourcing textile products from the cooperative Rangsutra, supporting thousands of women artisans in rural India.
Q: What message would you like to give to big corporates?
SB: Companies in major industries are already starting to embrace social procurement. It is a trend that is gaining a lot of traction. We want to invite more corporates to take this topic seriously, Get in touch with us. There is a myth that social businesses don’t deliver quality goods and they can’t do it at scale. We have 100 corporate-ready social businesses that are prepared to sell quality goods at a good price so there is no trade-off. That said, there are cases when big corporates like IKEA want massive volumes that may require more than one social business to fulfill an order. Another thing to keep in mind is that the social entrepreneur doesn’t need to be a company’s direct supplier. Companies of a certain size have a power over their value chain. They can tell their tier one, tier two, or tier three suppliers that they want them to buy from social businesses. The other thing for companies to be aware of is that typically procurement departments don’t use social impact as a criteria. It is a learning process, and it requires a certain mindset shift and awareness that is necessary to do this. The direction needs to come from the top. Corporates hold the key to the success of social procurement. If there is not widespread support, it won’t happen.
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