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What is social procurement?

11 September 2026

Sector News Best practice

Joanne Barrow
Head of Marketing & Digital

Embed social suppliers into your supply chain to create social impact with your buying power.

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Social procurement, more than just doing good

Every dollar you spend is a strategic decision. Social procurement puts that spending power to work, generating measurable social value beyond the goods and services you buy.

Leading businesses now embed social procurement into their supply chains to meet sustainability and ESG targets, diversify their supplier base, and build more resilient operations.

Traditional procurement measures value by price alone. Social procurement measures the wider impact a purchase has on people and planet.

Social procurement falls into two broad approaches: direct and indirect.

Direct social procurement: buying directly from social suppliers like social enterprises, Australian Disability Enterprises, Indigenous-owned and women-owned businesses.
Indirect social procurement: using the tendering process, and clauses in contracts with the private sector, to secure social and sustainable outcomes, such as employment targets for people facing long-term unemployment.

By partnering with social suppliers, you'll meet your social performance goals while growing your social value. That drives more business value for your organisation.

Demonstrating social value is now in every state, defining public contracts

Each state and territory takes a different approach to social value in tender requirements, but it is a defining factor to winning public contracts.

Victoria’s Social Procurement Framework governs how the Victorian Government procures goods, services and construction, and is widely regarded as the most mature, highest-expectation social procurement policy in the country. Depending on spend thresholds and location, buyers must seek out social suppliers, unbundle procurement to improve their access, or set spend targets suppliers must show how they'll meet.

NSW Government procurement policy requires every procurement opportunity to consider social outcomes and sustainability, with requirements for engaging SMEs, regional businesses, Aboriginal enterprises and Australian Disability Enterprises, and social enterprises are named as an encouraged supplier type in the NSW Buyer Guide.

From 1 January 2026, the Queensland Procurement Policy 2026 became the government's overarching procurement policy, built on five strategic pillars, the fifth of which commits to building a diverse supplier base, including social enterprises and Aboriginal and Torres Strait Islander businesses.

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The Western Australian Social Procurement Framework applies to all state agencies and sets Community Outcomes that feed into value-for-money assessments under the WA Procurement Rules, across all procurement types.

South Australia's Economic and Social Procurement Guideline sets out how public authorities build economic and social outcomes into everyday buying, and explicitly names social enterprises - organisations that reinvest the majority of their profit into their purpose - as a recognised social benefit supplier type.

Tasmania's Buy Local Policy requires an Economic and Social Benefits Test on all open tenders valued at $100,000 or more, weighted at 30% of the overall evaluation criteria, and a Tasmanian Industry Participation Plan is mandatory for contracts of $5 million or more.

The ACT's Government Procurement (Charter of Procurement Values) Direction 2020 applies to all new procurements regardless of value, committing agencies to weigh ethical, environmental, economic and social factors.

The NT's procurement framework is built around "Value for Territory", assessing the overall benefit of a purchase, not just price.

What social enterprise delivers for your business

Stop viewing social impact as a cost. Start treating it as a capability. Purpose-led businesses like social enterprises help you:

Unlock social value embedded in everyday spend
Drive long-term employment outcomes for people furthest from the workforce
Tackle entrenched disadvantage in the communities where you operate
De-risk your supply chain with agile, locally anchored suppliers
Create environmental benefits that strengthen your sustainability credentials

5 benefits of social procurement

1. Transform lives and your community footprint

Social procurement provides employment opportunities for marginalised people, empowers disadvantaged communities, and funds initiatives that advance social equity and environmental sustainability. It converts your operational spend into measurable community impact and gives your business positive stories worth telling.

2. Build a more resilient supply chain

Global supply chains carry global risk. Social enterprises are local, lean, and agile - able to pivot quickly when disruption hits. Partnering with them reduces your dependence on offshore suppliers, shortens your supply chain, and delivers high-quality, sustainable solutions closer to home.

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3. Earn deeper customer loyalty

Customers buy values, not just products. Social procurement makes your purpose credible and measurable, building brand trust and loyalty that set you apart.

4. Win more government contracts

Australian governments increasingly favour suppliers that demonstrate social and sustainable value. Embedding social procurement gives you a real edge when tendering for public sector work, where these criteria now often decide who wins.

5. Attract and retain the talent you need

Embedding social suppliers in your supply chain signals real ESG commitment, builds pride, and cuts costly churn. People want to work for organisations that are purpose-driven and want work that matters.

Looking for a practical guide to embed social procurement further? Take a look at our Social Procurement Playbook.

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Social procurement in action

John Holland & KADYN: Delivering infrastructure while breaking down barriers to employment.
Australian Grand Prix Corporation & All Things Equal: World-class sporting event putting inclusion first.
Mirvac & Green Connect: Reduced waste and supported ethical labour through sustainable partnerships.
Natura Pacific & Yarrabilba: Combined biodiversity conservation with employment for incarcerated individuals.
Icon & Assembled Threads: Created PPE while building a circular economy and providing jobs for marginalised workers.

Natura Pacific

Social Traders enabling social procurement

Social Traders has been the leading industry body for social enterprise and social performance since 2008.

For nearly 20 years, we've been helping Australian organisations turn social procurement from an intention, into a program that delivers.

We bring the deep expertise, access to the largest certified social enterprise network, and the measurement tools you need to embed social procurement as a genuine value creator for your business.

Here's how we help your organisation with social procurement:

Strategy and plan: we help set your ambition, build the policy and design a program that suits your needs.
Credible reporting: get independently verified social spend and demonstrate tangible outcomes, not just dollar spent.
Projects: find the right social suppliers and structure the work so more of them can participate.
Training: advisory sessions and in-house training support to uplift your team's skills and confidence to deliver.
Supplier development: build social suppliers' capability with our support, so they win larger opportunities and create greater impact with you.
Strengthening supply chains: we help your commercial suppliers and subcontractors embed social procurement and deliver more social value too.

Join the leaders turning good intentions into measurable impact

Whether you're setting your first social procurement policy or scaling an established program, Social Traders is your partner every step of the way. Get in touch and find out how we can support your organisation.

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