Social procurement benefits companies and social enterprises

THE Chamber of Social Entre-preneur Development Malaysia (CSED) applauds the Malaysia Impact Alliance, a non-profit focusing on impact investing in Malaysia, which worked in collaboration with Yunus Social Business, an impact investing advocacy non-profit, on the launch of the “Malaysia Social Procurement Country Report 2024” recently.

This report highlights an urgent and compelling case for Malaysian companies to adopt social procurement practices to support more impact-driven businesses in light of a broader global movement. Business leaders are encouraged to adopt social procurement as a way to address social issues and empower communities.

The World Economic Forum’s “State of Social Procurement 2025” report reveals that companies worldwide typically spend a hefty US$5bil (RM22.3bil) on procurement, dwarfing the US$12mil (RM53.55mil) they allocate to corporate social responsibility (CSR) efforts. CSED believes the disparity likely holds true in Malaysia as well.

Social enterprises don’t just want handouts. While CSR efforts play a key role as a start, social enterprises are keen to join the supply chain and deliver impactful products and services, they do not want to just rely on short-term goodwill. However, existing procurement policies and strict operational standards set by companies may often hinder impact- driven businesses from becoming vendors, especially when com­peting against larger, conven­tional suppliers.

Despite their proven success in addressing social needs, these social enterprises likely face barriers that dampen their ability to deliver both impact and value. In essence, procurement policies would need to be more flexible and prioritise impact metrics alongside cost.

As a company, adopting social procurement can immediately enhance brand reputation while tapping into innovative solutions. Buying everyday stationery items like lanyards or notebooks from social enterprises might seem minor to companies, but it’s a meaningful first step towards impactful change for those social enterprises.

A company may already budget for these essentials, so redirecting that spending to social enterprises is easily done and not only fulfils a practical need but also supports and empowers marginalised communities and aligns with the government’s goals to support domestic businesses. It’s a small choice with outsized potential.

CSED invites interested companies to join us in the global social procurement movement. It’s time for Malaysian companies to lead the charge.

IZWAN ZAKARIA

Secretary

Chamber of Social Entrepreneur Development Malaysia (CSED)