What is social responsibility procurement and why is it so important?

As businesses and government agencies walk the path of procurement, the emphasis has shifted from mere transactions to transformative interactions, from contracts to conscience.

In this dynamic landscape, where our actions are felt far beyond the boardroom, the power of social responsibility cannot be underestimated. It’s not merely a checkbox on a form, but a way towards impactful, inclusive, and ethical practices. It’s the positive change in our communities with reverberations through the very core of sustainable development.

But how do you weave the threads of social responsibility into the fabric of your tender response?

How do you make your commitment to responsible procurement not just evident but compelling?

Demonstrating social responsibility in a government procurement tender response involves showcasing your commitment to ethical practices, community engagement, and positive social impacts.

So lets go!

What is social responsibility procurement?

Social responsibility in procurement involves the ethical and sustainable practices that organisations and government agencies integrate into their purchasing processes. It includes the consideration of economic, environmental, and social factors when making procurement decisions, with an emphasis on fair labour practices, environmental sustainability, diversity and inclusion, and community well-being.

The aim is to make responsible choices that benefit society, minimise negative environmental impacts, and encourage ethical and inclusive business practices throughout the supply chain.

Why is there a push on a commitment to social responsibility procurement?

The push for social responsibility in procurement in Australia is driven by a confluence of global sustainability goals, government initiatives, stakeholder expectations, legal requirements, and a growing awareness of the need to balance economic, environmental, and social considerations in procurement decisions.

This shift reflects a broader commitment to responsible and sustainable business practices in the country.

The key reasons for this push include:

Environmental and sustainability concerns

There is a growing recognition of the need to address environmental challenges and reduce the ecological footprint in business operations and supply chains.

Government promotion and global commitments

The Australian government has taken initiatives to promote sustainability and social responsibility in procurement, aligning with international agreements such as the Sustainable Development Goals (SDGs).

Stakeholder expectations and competitive advantage

Increasingly, consumers, stakeholders, and organisations see responsible procurement as a way to meet expectations, enhance reputation, and gain a competitive edge, leading to broader adoption of social responsibility practices in procurement.

A successful model of government policy and the positive effects of social responsibility procurement is the Indigenous Procurement Policy (IPP).  Introduced in 2019, it mandates that Commonwealth government agencies allocate a minimum of 3% of their procurement budget to Indigenous businesses by 2024. The policy aims to enhance the participation of Indigenous businesses in the national economy, generating jobs and opportunities for Indigenous communities.

Since its implementation, there has been a substantial increase in government spending with Indigenous businesses, with $2.3 billion allocated in 2021-22, more than doubling the amount from 2018-19.

Explore other government procurement trends to equip you with the knowledge and foresight to seize the opportunities that lie ahead.

Examples of social responsibility in procurement

Ethical Practices

Highlight your organisation’s commitment to ethical practices. This could involve adhering to codes of conduct, promoting transparency, and ensuring fair and honest dealings.

Your company can source from suppliers who have certified environmental management systems in place or its suppliers to reduce the environmental impact of its supply chain. For example, you could work with your suppliers to reduce the amount of packaging used or to switch to more sustainable materials.

Fair labour practices and human rights

Detail your approach to ensuring fair employment practices and respecting human rights. Highlight initiatives such as equal pay, safe working conditions, and compliance with employment laws.

HINT! Use the Fair Work website to ensure all your employment contracts, wages and leave entitlements are up to date.  This can change often.

Diversity and social inclusion

Showcase your commitment to diversity and social inclusion in your workforce and supply chain. Explain how you promote equal opportunities for all individuals, regardless of gender, ethnicity, or other characteristics.

This could include indigenous procurement, an important way to support Indigenous economic development and create jobs and opportunities in Indigenous communities.  For example, a mining company demonstrates its diversity and social inclusion by contracting with an Indigenous-owned construction company to build a new road on their mining site.

Local community engagement

Describe your strategy for engaging with and benefiting the local community. Highlight initiatives such as job creation, skills development, community investment, and partnerships with local organisations.

Stakeholder collaboration

Emphasise how you collaborate with stakeholders, including local communities, non-governmental organisations (NGOs), and relevant advocacy groups. Show how their input and concerns shape your social responsibility initiatives.

Here’s an example of stakeholder collaboration – A technology company convenes a panel of experts from academia, industry, and civil society to advise on the development and deployment of the new AI system. The technology company incorporates the input and concerns of the experts into its development and deployment plans for the new AI system. They develop a set of ethical principles for the development and use of the AI system. The company also establishes a process for reviewing and approving the use of the AI system for specific applications.

Social impact assessment

Conduct a social impact assessment of your proposed solution. Demonstrate how your approach positively contributes to the well-being of the community and individuals affected by the project.

Employee Well-Being

Detail initiatives to support the well-being of your employees. This could include health and wellness programs, professional development opportunities, and work-life balance measures.

For example, a large technology company offers its employees an Employee Assistance Program (EAP) through its health insurance provider. The EAP provides employees with access to free counselling sessions and other support services such as fitness classes, on-site healthcare services, and healthy snacks in the office kitchen.

They demonstrate the success of their EAP by highlighting their recent survey, where 80% of employees said that they were satisfied with the EAP, and 75% of employees said that the EAP had helped them to improve their well-being.

Partnerships with NGOs and not-for-profits

Highlight any partnerships or collaborations your organisation has with NGOs or not-for-profits that work to address social issues and contribute to community development.

Education and Training Initiatives

Showcase your efforts to provide education and training opportunities to local communities, helping individuals acquire valuable skills and improve their employability.

A construction company may develop a pre-apprenticeship program to local residents or a large defence industry company has partnered with the local TAFE college to develop a new apprenticeship program in defence engineering.

Local sourcing and supplier diversity

Explain your approach to sourcing goods and services locally, whenever feasible. Also, discuss your commitment to working with diverse suppliers from different backgrounds.

Measurable social metrics

Include measurable social metrics and targets that you plan to achieve through your social responsibility initiatives. This could include metrics related to job creation, training participation, community investments, etc.

An example for an engineering company – their metric is to increase the percentage of women in the engineering workforce from 20% to 30% within five years and their target is to increase the number of women hired into engineering roles by 50% each year.

Long-Term Commitment

Highlight your long-term commitment to social responsibility beyond the duration of the project. Describe how your efforts will continue to benefit the community even after the project is completed.

Say for example, a law firm has established a foundation that supports environmental organisations and initiatives. The foundation provides grants to organisations that are working to protect the environment and to promote sustainable development.

The foundation has a dedicated staff member that is responsible for developing and implementing grant programs, and the foundation has raised a significant amount of money to support its work.

Strategic Steps for Social Responsibility in Procurement

Here’s a step-by-step guide on how to effectively demonstrate social responsibility in your tender response –

1. Understand the buyer’s social responsibility requirements.

This can be done by carefully reading the tender documentation and identifying any specific social procurement criteria that the buyer is looking for.

HINT! Buyers may also have published social procurement policies or guidelines on their website, which can provide further insights into their priorities.

2. Map your existing social responsibility initiatives to the buyer’s requirements.

Once your company understands the buyer’s social responsibility requirements, you should identify which of your existing initiatives align with these. This could include initiatives related to employment practices, diversity and inclusion, environmental sustainability, or community engagement.

3. Develop a clear and concise social responsibility statement.

This statement should outline your company’s commitment to social responsibility and highlight the specific initiatives that you will implement if awarded the contract. The statement should be tailored to the specific tender and should be specific, measurable, achievable, relevant, and time-bound.

4. Provide evidence to support your social responsibility claims.

Your evidence could include case studies, testimonials, or data and metrics. For example, if your company is claiming that you are committed to diversity and inclusion, you could provide evidence of your employee diversity statistics or your diversity and inclusion policies.

5. Executive Summary of Social Responsibility

Consider including an executive summary that succinctly captures the key social responsibility aspects of your proposal. This can provide evaluators with a quick overview.

6. Make a financial commitment to social responsibility.

In some cases, buyers may require tenderers to make a financial commitment to social responsibility. This could involve donating a percentage of the contract value to a charity or social enterprise, or investing in social impact initiatives.

Extra tips for demonstrating social responsibility in your tender response.

So, you’ve got some great social responsibility initiatives in your tender response.

But is this enough?

Check out these tips from our Tender Evaluation team to help your company demonstrate your commitment to social responsibility in your tender responses and increase your chances of winning contracts –

• Are you specific and provided examples in your tender response?

Have you just made general statements about your commitment to social responsibility? Ensure your tender response includes specific examples of initiatives and programs that you have implemented.

• Are you transparent and honest?

Don’t try to greenwash your business or overstate your social responsibility achievements. Be honest about what you are doing well and where you can improve.

• Are you authentic?

Your social responsibility commitment should be genuine and authentic to your business values. Don’t just do it because you think it will help you win the tender.

• Have you used visuals and testimonials?

Use visuals, infographics, and testimonials in your tender response to showcase the real-world impact of your social responsibility initiatives in previous projects.

Demonstrating social responsibility goes beyond compliance – it’s about showcasing a genuine dedication to creating positive social change and making a meaningful contribution to the communities you operate in.

Read Part 2 of our series on social responsibility procurement –

How to communicate your social procurement in your tender submissions

FAQs

What is the difference between corporate social responsibility (CSR) and social responsibility procurement?

CSR has a broader scope, encompassing a company’s overall impact on society and the environment, social responsibility in procurement focuses specifically on ethical and sustainable practices within the procurement process. However, both concepts share common ethical principles, emphasize transparency, and contribute to a company’s reputation and stakeholder engagement. Integrating social responsibility in procurement is a key aspect of fulfilling a broader CSR commitment.

What are the three pillars of sustainable procurement?

The three pillars of sustainable procurement are environmental, social, and economic considerations, encompassing practices that minimize environmental impact, support social well-being, and maintain economic viability within the supply chain.

What is the triple bottom line (TBL) in social responsibility procurement?

The triple bottom line in social responsibility procurement is a framework that assesses the comprehensive impact of procurement decisions, considering three key dimensions: economic, social, and environmental.

The goal is to make procurement decisions that simultaneously benefit the organisation’s bottom line, contribute to social well-being, and reduce environmental harm, ensuring a well-rounded and sustainable approach to procurement.