Getting Sustainable and Social Procurement Lingo Straight Once and for All
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There are a lot of terms being thrown around in the sustainable and social procurement world these days and it’s a source of confusion for many. For example, have you heard Senior Executives or City Councillors talking about fair wage when they actually mean living wage? Or think social procurement is somehow different or distinct from sustainable procurement?
The Canadian Collaboration for Sustainable Procurement (CCSP) is here to clear the air because how can we be effective in advancing our social and environmental goals if we aren’t all speaking the same language? Find below definitions of sustainable and social procurement as well as other important related terms.
4 PILLARS OF SUSTAINABLE PROCUREMENT
Sustainable procurement embeds relevant sustainability considerations into processes for selecting goods and services, alongside traditional considerations like price, quality, service, and technical specifications. It’s a broad term that all sustainability issues can be nested under.
Typically, organizations draw from some combination of the following 4 pillars depending on their organizational plans and priorities. However, the best programs integrate all 4 pillars in a comprehensive, holistic way.
1. Environmental or Green Procurement
Sometimes referred to as circular procurement, aiming to:
- reduce greenhouse gas (GHG) emissions, waste, energy and water usage, and toxicity,
- increase the circularity of our economy, and
- support clean, renewable industries.
2. Ethical Procurement
Reducing ‘sweatshop labour’ by:
- setting workplace standards for suppliers and subcontractors,
- assessing compliance with International Labour Organization conventions against child labour, forced labour, and employment discrimination, and
- upholding fair labour standards consistent with the United Nations’ Universal Declaration of Human Rights.
3. Indigenous Procurement
Sometimes referred to as Aboriginal procurement, purchasing from Indigenous owned and operated businesses to support Reconciliation and socio-economic resilience for Indigenous peoples and communities.
4. Social Procurement
Reducing poverty and fostering inclusivity by creating economic opportunities for equity-seeking groups and other target populations. This includes:
- purchasing from suppliers that offer social value, such as non-profits, social enterprises, and diverse suppliers, and
- mandating suppliers to deliver social value as a condition of the contract, often outlined through Community Benefit Agreements (CBAs).
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KEY TERMS FOR SOCIAL PROCUREMENT
Within the domain of social procurement, there are many other related concepts to understand. Find a list of definitions for commonly used terms below.
EQUITY-SEEKING GROUPS, often referred to as marginalized populations, include women, Indigenous peoples, members of visible minorities and persons with disabilities.
TARGET POPULATIONS are groups that are of special interest to a community. They may fall outside of traditional equity-seeking groups but are nevertheless important for the health and vibrancy of the community. Examples include youth, new immigrants, veterans, ex-convicts, homeless people, and small-medium-sized business owners.
SOCIAL VALUE within the context of procurement includes suppliers offering:
- socially responsible production (e.g. certified B Corps), and
- leading diversity, equity and inclusion practices,
- employment and training for equity-seeking groups and target populations,
- full-time fair and/or living wage employment,
- advanced health and safety practices, and the like.
SOCIAL ENTERPRISE is an entity with a mission to achieve social, cultural or environmental aims through the sale of goods and services that reinvests the majority of its profits back into its mission.
DIVERSE SUPPLIERS are majority-owned, managed, and controlled by Indigenous Persons or individuals from an equity-seeking community including, but not limited to, women, racialized minorities, persons with disabilities, newcomers, and LGBTQ+ persons.
Many organizations with supplier diversity programs require suppliers to be certified by organizations including the Canadian Aboriginal and Minority Supplier Council, Women Business Enterprise Canada Council, Canadian Gay and Lesbian Chamber of Commerce, Canadian Council for Aboriginal Business, and/or the Inclusive Workplace Supply Council of Canada.
LIVING WAGES reflect the hourly amount a family needs to earn to cover basic expenses in their specific community. These basic expenses include food, clothing, rental housing, childcare, transportation, and small savings to cover illness or emergencies. Living wages reduce severe financial stress by lifting families out of poverty and providing a basic level of economic security.
For example, Canadian municipalities certified as living wage employers include the City of Vancouver, New Westminster, Burnaby, Port Coquitlam, Cambridge, Kingston, Grey Bruce, North Perth, and the County Huron. Some cities have adopted category-specific Living Wage policies like the City of Edmonton’s policy for janitorial services.
FAIR WAGES are minimum wage rates for specific occupations. They must be paid by contractors doing work for governments with fair wage policies. These policies generally apply to the construction, trades, and sometimes cleaning and security workers. They are often tied to union wage rates, ensuring contractors don not slash wages and benefits.
For example, the Government of Canada, Manitoba, Ontario, New Brunswick, Yukon and a number of municipalities such as the City of Toronto, Thunder Bay, Clarington, Hamilton, and Vaughn have adopted fair wage policies.
COMMUNITY BENEFITS AGREEMENTS (CBAs) require suppliers to provide jobs, training, procurement opportunities, and other benefits to marginalized and target groups in a particular community. They are most often included in Industrial-Commercial-Institutional developments.
For example, Infrastructure Canada’s CEB initiative requires applicable projects to employ or provide procurement opportunities to at least three out of the eight following targeted groups: apprentices, Indigenous peoples, women, persons with disabilities, veterans, youth, recent immigrants, and small, medium-sized and social enterprises.
LOCAL PROCUREMENT refers to the purchase of goods and services from suppliers in the buyer’s region and aims to foster local economic development and build stronger relationships with their community.
For example, the Government of Newfoundland and Labrador increased their procurement thresholds and implemented a local preference provision in June 2020 to better support local businesses through COVID-19 and beyond.
KEEP IN TOUCH
Stay up to date with sustainable procurement news in Canada by following the CCSP on LinkedIn, signing up for the CCSP’s monthly newsletter, and reading our latest Annual Report on the State of Sustainable Public Procurement in Canada.
WRITTEN BY: TIM REEVE AND ALYSSA MCDONALD FROM THE CANADIAN COLLABORATION FOR SUSTAINABLE PROCUREMENT (CCSP)