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Sustainable Procurement

A Big Income Opportunity for Impact Entrepreneurs

This past March, the world celebrated its first “Sustainable Procurement Day“. There were no fireworks, no celebrations, and unless you are a procurement nerd immersed in spreadsheets with sustainability data, you likely didn’t even notice that #WorldSustainableProcurementDay did not come anywhere close to trending on Twitter.

However, this grassroots movement is already making a massive impact, and has the potential to dramatically shift some of the biggest forces in our economy: how businesses and governments purchase goods.

Procurement has the potential to dramatically shift some of the biggest forces in our economy: how businesses and governments purchase goods.

“Procurement” is not the most buzzworthy business trend and often overlooked by impact entrepreneurs looking for new sales opportunities. Procurement professionals sit within most corporations over 1,000 employees. In some companies, procurement teams are over a thousand employees. A search on LinkedIn shows over 4 million professionals with procurements in their role; Unilever alone has over 3,500.

Man at computerProcurement professionals are responsible for understanding the needs of different business units within their companies, and then finding external business partners (aka suppliers) that can supply and/or address their needs. So, when the marketing department needs a new agency or a new product needs a new source of ingredients, they will go to procurement, which will then work to find businesses that can fulfill the need. (For a full primer on procurement, read this series that we published on the MovingWorlds blog.

While procurement is far from new, Sustainable Procurement is new, and creates a huge opportunity to build a more sustainable, just, and equitable economy. While estimates vary widely, over $13 Trillion worth of funds flow in business-to-business transactions with small-and-medium enterprises alone. According to the World Bank, governments globally spend another $11+ Trillion via public procurement.

In other words, there are tens of trillions of dollars that are spent with the support of procurement professionals every year, and now, thanks to the folks at the Sustainable Procurement Pledge (SPP), the organizers of Sustainable Procurement Day, over 6,800 have committed to using their roles to ensure that this money is being spent with sustainable and impact enterprises.

The opportunity for impact entrepreneurs

Companies like Unilever, Google, SAP, and more have made public commitments to spend billions of dollars with social enterprises and diverse-owned businesses. SAP, for example, has committed 5% of addressable spend for diverse and social enterprises, respectively by 2025.

Increasingly, when selling to new corporations, social and environmental impact data will be not just a nice-to-have in a sales pitch, but rather, something that procurement professionals will be looking for and prioritizing when reviewing business pitches and proposals.

Hands holding leaves

Beyond reviewing sales pitches, procurement professionals will also play bigger and bigger roles in the innovation and new product development processes for corporations and governments, too. Take, for instance, a company trying to develop a regenerative or circular product. The team leading this effort is more likely than ever to partner with procurement professionals to find new innovation partners that can help embed sustainability in their products, and work with new social enterprises as part of this journey.

This means that impact entrepreneurs likely have new and vastly underutilized sales channels at big companies: procurement.

This means that impact entrepreneurs likely have new and vastly underutilized sales channels at big companies: procurement. Savvy entrepreneurs, especially those with a business-to-business focus, should actively look for procurement individuals at both current and potential customers to identify new opportunities where they can sell in to.

To learn more about procurement, make sure to follow the Sustainable Procurement Pledge (SPP), as well as the Social Enterprise World Forum, which has a Community of Practice. For support in building corporate connections, impact entrepreneurs can also join the the TRANSFORM Support Hub, powered by MovingWorlds: an on-demand support network to help social enterprises grow their revenues and impact.

Mark Horoszowski is the CEO at MovingWorlds, a social enterprise helping social enterprises partner with corporations to build a more sustainable, equitable, and just economy. Mark is an RSA Fellow and is a founding adjunct faculty member and lecturer on Corporate Social Responsibility at the University of Washington Tacoma's Center ... Read more
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