Around the world, trillions of dollars are spent on procurement every year. In the last few years, various pledges and initiatives have pushed to see more of that annual procurement budget spent with social enterprises – to help grow and create an opportunity for businesses to do more good for people and the planet through their supply chains.

To learn more about social and sustainable procurement, we spoke to Jaime Paiva, Head of Procurement & Supply Chain Management EMEA at Zurich Insurance Group (Zurich) and Co-Chair Supplier Diversity and Inclusion at the Sustainable Procurement Pledge. Not only did Jaime share his reflections on the growing awareness of sustainable procurement today, he also shared about his career so far and how verifications play an important role in social procurement.

Can you tell us how you first got into sustainable procurement?

It was one of those coincidences in life. About 10 years ago, Zurich Municipal, which offers the public and voluntary sector with insurance and risk management solutions in the UK, connected us with Social Enterprise UK (SEUK). At that time, SEUK was launching an initiative called the Buy Social Corporate Challenge to increase procurement spend with social enterprises and we decided to support that by becoming a founding member.

Since the initiative started, over £350 million has been spent by its members on buying from social enterprises. This effort has generated more than £30 million in profits for those social enterprises, enabling them to reinvest in their missions.

In addition to collaborating with SEUK on this initiative, we’ve also expanded our social procurement program within the wider Zurich organisation, to include more countries across Europe and Latin America.

Can you explain your work with the Sustainable Procurement Pledge?

The SPP is a grassroots organisation that supports procurement professionals drive a more sustainable and responsible procurement agenda. It was started about five years ago by the Chief Procurement Officers (CPOs) from Henkel and Bayer and it works on two fronts.

First, it collaborates with the CPOs of about 25 global companies to drive change today. Second, it works through region and topic-specific chapters on education and raising awareness. This will often be with students or procurement professionals early in their careers. Our goal is to educate them so that when they progress in their careers, they will have this sustainable procurement mindset in them from the beginning of their careers.

I joined the SPP about three years ago on a pro-bono basis. Currently, I serve as one of the two co-chairs for the Supplier Diversity chapter, which includes social procurement as one of its main topics.

How did you first learn about the People and Planet First verification and why do you think verification is important?

I first heard about People and Planet First in 2022. Gerry Higgins, the Founder and Managing Director of the Social Enterprise World Forum (SEWF), visited our London office to discuss the verification process that was being piloted at the time – and specifically the idea of working with local intermediaries on defining the minimum requirements.

At Zurich we don’t have our own verification process or definition for what constitutes a social enterprise. We rely on local intermediaries in each country and their verification process. However, we have realised over time that these intermediaries don’t always have consistent requirements.

Having consistent verification is important from a reputational perspective. If we start working with a company that claims to be a self-assessed social enterprise, but it turns out that this not entirely true and they become embroiled in a scandal, it could impact our brand and the trust our customers have in us.

Verification helps to mitigate that risk and expedites the process as we don’t need to conduct the entire vetting and verification process ourselves each time.

Quai Zurich Campus | Credit: Zurich

What changes have you seen within the sustainable procurement space over your career?

Looking back to procurement conferences six or seven years ago, sustainability and social procurement were rarely included on the agenda.

For example, in 2018, I was invited to participate in a panel on supplier diversity, but the focus was general and not specifically on social procurement. However, in recent years I have often been invited to these events as a keynote speaker to discuss social procurement.

The awareness in the industry has grown. While it is not yet where it should be, fewer people are asking, “What is social procurement, is it charity?” Sustainability and social procurement have become industry topics, especially with the Paris Agreement and greater awareness of climate change. Today, I believe every procurement function has at least one person primarily focused on sustainability.

It has also become a more significant topic for individuals. At Zurich, we have had new employees who mentioned that one of the reasons they accepted the job offer was our overall sustainability agenda. Some were already aware of our focus on social procurement and wanted to work with a company that prioritised it.

The Innovation Hub | Credit: Zurich

What do you hope that we will see in the future, what do you believe we need?

Currently, most social enterprises start as B2C businesses, but B2C alone is not sufficient.

For example, at Zurich, our largest area of procurement spend is in IT. There aren’t many social enterprises offering IT services, but if there were, a huge opportunity would be waiting for them. While an entire supply base of social enterprises would be ideal, it is also unrealistic. We are working on building a supply market with as many social enterprises as possible high-spend.

On the corporate side, there’s still much to be done in terms of awareness and advocacy for social procurement, such as our efforts with the Sustainable Procurement Pledge.

And in government, policymakers can do more on both fronts. They can make social procurement more attractive to large companies and provide more support to social innovators to incubate, as well as to scale social enterprises, enabling them to meet procurement demands and fulfil their social or environmental missions.

People and Planet First is a verification and a global collective that is accelerating the transition to an economy that puts people and the planet first. A collaborative approach with network partners across the globe is taken to verify enterprises in multiple countries. Learn more on how to get People and Planet First verified and the global #PeopleAndPlanetFirstWeek.