On October 5 SAP announced 5 & 5 by ’25, a corporate initiative targeting five percent of addressable spend* with social enterprises and with diverse businesses by 2025. In setting this target, SAP aims to inspire organizations around the world to buy more goods and services from purposeful suppliers, making a positive collective impact on the societies they operate in.

According to the World Bank, global procurement spend in 2019 was at least USD 14 trillion. By directing even just a small fraction of this spend to certified social enterprises and diverse businesses, organizations have the power to tackle some of the world’s most pressing social and environmental problems.

Based on early pilots in select markets, SAP estimates it could direct up to USD 60 million of its addressable global spend per year to social enterprises and diverse suppliers by 2025. Among DAX companies, this figure is estimated at approximately EUR 2.5 billion, and across U.S. Fortune 500 companies up to USD 25 billion.

SAP Executive Board member for Customer Success and recently appointed Global Buy Social Ambassador for Social Enterprise UK Adaire Fox-Martin announced the 5 & 5 by ’25 initiative at SAP’s Procurement Reimagined event in Singapore.

“Every company in every industry needs to procure,” Fox-Martin said. “We all need soap in our washrooms, landscaping for our offices, food and drink in our cafeterias, marketing services and office supplies. These and many more are all products and services provided by social enterprises and diverse businesses. This is money we are spending anyway. Why not spend it with suppliers who are delivering social impact as well?”

Social enterprises are businesses culturally and operationally focused on changing the world. They are similar to other commercially viable businesses, but with three crucial differences: They are founded and governed on the basis of a clear social or environmental mission; they reinvest the majority of their profit back into this mission; and they are majority controlled solely in the interest of this mission. A diverse supplier is a business that is at least 51 percent owned and operated by an individual or group that is part of a traditionally underrepresented or underserved demographic; such as women-owned businesses, minority-owned businesses and indigenous-owned businesses, among others.

“Together with our customers, partners, diverse suppliers and social enterprises, we have set out to expand social procurement where infrastructure exists and intend to establish the infrastructure and build capacity where it doesn’t,” Fox-Martin added. “We invite our entire ecosystem to learn more and take part, join us in this initiative, and help build the pathways and the momentum to realize this ambition and find a better way to grow.”

To learn more, read “Social Procurement: Finding a Better Way to Grow,” by Fox-Martin.

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About 5 & 5 by ’25

5 & 5 by ’25 is an initiative by SAP designed to encourage organizations across industries to direct more of their addressable spend toward certified social-enterprise and diverse-business suppliers. In joining the initiative, organizations agree to formalize their exploration of social procurement, including partnering with leading intermediaries, adopting social-procurement policies, consuming goods and services from purposeful suppliers, and expanding their engagement with more social enterprises and diverse businesses. The goal is to reach 5 percent of annual addressable procurement spend with social enterprises and with diverse businesses by 2025 and in doing so make significant impact on social inequalities and environmental imperatives. 5 & 5 by ’25 is part of the SAP One Billion Lives program, focused on promoting greater inclusion of social entrepreneurship in the global economy. For more information, visit 5 & 5 by ’25.

About SAP

SAP’s strategy is to help every business run as an intelligent enterprise. As a market leader in enterprise application software, we help companies of all sizes and in all industries run at their best: 77% of the world’s transaction revenue touches an SAP® system. Our machine learning, Internet of Things (IoT), and advanced analytics technologies help turn customers’ businesses into intelligent enterprises. SAP helps give people and organizations deep business insight and fosters collaboration that helps them stay ahead of their competition. We simplify technology for companies so they can consume our software the way they want – without disruption. Our end-to-end suite of applications and services enables business and public customers across 25 industries globally to operate profitably, adapt continuously, and make a difference. With a global network of customers, partners, employees, and thought leaders, SAP helps the world run better and improve people’s lives. For more information, visit www.sap.com.

*Addressable spend (as opposed to total spend) includes only a company’s orders for goods and services that can be fulfilled by a social enterprise or diverse business. For specific goods and services such as rent, energy, labor and some professional services, often neither social enterprises nor diverse businesses yet exist that provide them. Estimates based on assessments of SAP’s own spend suggest that between 10 percent and 30 percent of total spend could be designated as addressable spend, depending on country.

SEWF Digital took place in an extraordinary year, with the ongoing spread of the COVID-19 pandemic and the ensuing need to adapt to uncertainty and change.

From 21-24 September 2020, the global social enterprise community engaged online and participated in a programme of sessions that followed the sun, starting each day in Oceania and moving west to Asia, Africa, and Europe, finishing in the Americas.

Global challenges like the climate crisis and a decline in human rights in many countries around the world, influenced the SEWF Digital agenda. SEWF used its convening and influencing capability to enable the social enterprise movement and its supporters to share experiences and solutions to these global problems.

Download the event report

“With great power, comes great responsibility.”  It is a proverb that dates back through history, but many of us know it better as the Peter Parker principle, made popular through Stan Lee’s Spider-Man comics and movies. The concept that those entrusted with considerable resources have a duty to utilize them wisely.  At SAP Ariba, we recognize our position as leaders in the procurement market and fully embrace our responsibility to help the world spend better. 

In the past year, we had a fantastic opportunity with our customer, Insurance Australia Group (IAG), Australia and New Zealand’s largest general insurer, to enable the development of a business-to-business diversity channel of social enterprises and Indigenous and women-owned businesses.  In collaboration with SAP Ariba, IAG created an internal diversity marketplace to enable its employees to channel their spend to make a positive impact on local communities. With IAG’s drive and focus, SAP Ariba expanded its supplier community connected to the Ariba Network in Australia with suppliers from diverse backgrounds that will be available to all local and regional buyers using SAP Ariba Buying in Australia.  

Under this diversity initiative, IAG innovated utilizing tools within its SAP Ariba cloud solution to meet its business needs and growing demands for purposeful spending, creating a pathway to invest in community-driven suppliers. IAG and SAP Ariba worked closely with key supplier intermediaries across Aboriginal and Torres Strait Islander and women-owned businesses and social enterprises such as Supply Nation, Mums & Co and Social Traders to help identify diverse suppliers ready to transact on Ariba Network. By expanding the supplier pool, the diversity marketplace helps IAG employees make more informed decisions before purchasing. Equally important is the ability to provide social enterprises, Indigenous and women-owned businesses better access to markets and corporate spend, allowing them to go from your friendly neighborhood Spiderman (or in many of these cases Spiderwoman!) to full-fledged Avengers-level superheroes.

By working together towards this end and encouraging more programs like IAG’s diversity marketplace, we will build a more inclusive, more equitable and more sustainable economy – and enable organizations of all sizes and industries to find a better way to grow. Initiatives such as these benefit buyers and suppliers alike. For buyers like IAG, they elevate the role of procurement beyond cost reduction by allowing their employees to spend better and make a social impact in the community. For small, indigenous suppliers, we are growing their businesses by giving them access to the largest business-to-business network in the world. The collective power and purpose of our profession to build a community and figure out ways that we can work together to improve people’s lives and create a level playing field for everyone is as gratifying as it is impactful.

As the world’s largest business-to-business commerce network, with more than 4.2 million connected companies transacting nearly three trillion US dollars annually, the impact of SAP Ariba on the global economy is undeniable and growing. This community of buyers, suppliers, partners and business leaders has the power to make a positive impact on the world and it is truly our responsibility to utilize our “spidey senses” to benefit the greater good.

We invite you to follow Pat McCarthy on LinkedIn or join him online for his monthly PAT Chat series to learn more about the latest in procurement and technology.

About SAP:
SAP is the market leader in enterprise application software, helping companies of all sizes and in all industries run at their best. For more than a decade, SAP has worked to build trust and add value to the social enterprise sector. In addition to the partnerships mentioned above, efforts in this field focus on inspiring early stage innovation and new ventures, to accelerating and scaling mature social enterprises. With a global network of customers, partners, employees, and thought leaders, SAP helps the world run better and improves people’s lives. Join SAP at Social Enterprise World Forum – Digital on Thursday, September 24 at 5:00 p.m. CET to hear Adaire Fox-Martin, SAP executive board member and head of Customer Success share more about SAP Ariba and the procurement with purpose journey.

Corporate procurement is quickly becoming one of the main areas of interest for companies committed to social change and to positively impacting people and the planet. SAP has been leading the charge, demonstrating how integrating social enterprises into corporate supply chains can create added value for companies and communities.

In a recent blog SAP detailed their commitment to social enterprises and how their commitment to social procurement provides the company with a competitive advantage. By doing good, they are also doing well. SEWF’s Managing Director Gerry Higgins commented on the additional value social enterprises can add to traditional business purchasing criteria like pricing and quality. “‘If a city with youth unemployment challenges evaluates construction bids based in part, on the potential for greater community benefits, we’ve seen commercial companies commit to training qualified apprentices, instead of using cheap labor from somewhere else,’ [Higgins] said.”

Read more about SAP’s commitment to social procurement around the world and discover how SEWF is partnering for impact with SAP and other organisations that share our vision for a new global impact economy.

Last week we reflected on systemic and structural responses that are supporting the social enterprise sector in light of the COVID-19 pandemic. These structural responses often rely on the ingenuity, creativity, and hard work of frontline social enterprise organisations and leaders who advocate for the sector and frequently inform the delivery of these response funds and campaigns. These are the same organisations and leaders that are collectively responding to this crisis by serving the needs of the most vulnerable and most affected in our communities.

Across the SEWF network, there are numerous examples of social enterprises around the world stepping up to address and mitigate the impact of coronavirus. Some are scaling up with the assistance of their talented and committed staff and volunteer teams to deliver critical public services, while others are changing what they deliver or using innovative approaches to still serve the community.

In the food service and hospitality industry, social enterprises are working to keep supply chains intact, providing additional sources of income for local farmers, while providing meals to those that need them most. DC Central Kitchen (DCCK) is a social enterprise in the United States that scaled up their meal distribution efforts in March to meet increased demand for meals across Washington, DC. In their first two weeks of COVID-19 response, they provided over 80,000 meals to children experiencing hunger in the face of school closures and to partner agencies and shelters expanding their services. In addition to meal distribution, DCCK made their healthy corners food product even more affordable while supporting mutual aid networks and providing fresh produce bags for individuals who need extra support. Similarly, a newly formed social enterprise in South Africa called FoodFlow is providing families experiencing food insecurity with bags of fresh produce and groceries from local farms and suppliers.

Beyond protecting health and wellbeing by tackling food insecurity, many social enterprises are directly supporting the healthcare industry. Some like Biji-Biji, an up-cycling and community arts social enterprise in Malaysia, are staying true to their missions and core activities while developing a new service to response to COVID-19 specific needs. Recognising the shortage of essential personal protective equipment (PPE) for healthcare workers, Biji-Biji is currently up-cycling unused and unwanted materials that can be used to create needed PPE. Just north in Thailand, the social enterprise Opendream created a streamlined application called Sabaidee that focuses on anonymous participatory symptom reporting for the general public and person under investigation (PUI) management for hospitals. Their service will help public health officials better estimate the scope of the outbreak and fight the spread.

After this fight is ‘over’ and after lockdowns and quarantines are called off, social enterprises will still be on the frontlines fighting for society’s most marginalised and vulnerable. Even when the direct effects of the pandemic have subsided, the societal inequities that are currently being exacerbated as indirect effects of COVID-19, like food insecurity, homelessness, or educational inequality, will remain. In the face of that reality, social enterprises across all industries will continue to sustainably provide for our communities in ways they always have been. As they continue to work toward creating a more just and equitable society, it will be time for us all to rethink how our economy works and embrace social enterprises as they pave the way for a new global impact economy.