$1.4 billion and accelerating: why social procurement has moved from compliance to competitive advantage
For many CEOs, procurement has traditionally been viewed through a narrow lens: cost, quality, reliability and risk. Those measures still matter. No organisation can afford a supply chain that does not perform commercially. But the role of procurement is changing, and the latest data from Social Traders suggests that the change is no longer marginal.
For eight years, Social Traders has tracked the spend Australian businesses and governments direct towards certified social enterprises. The FY25 results show that $304 million was spent with certified social enterprises in FY25 alone, an 18% increase on FY24 and the highest single-year total on record. Cumulative spend has now passed $1.4 billion since FY18, with a 35% average annual growth rate sustained over eight years.
For CEOs and business owners, that sustained growth is the point worth paying attention to. A one-year increase can be explained by policy, a major project, a small group of early adopters or market enthusiasm. Eight years of average annual growth points to something deeper. It suggests that social procurement is moving from a values-led initiative to a strategic business lever.
At The CEO Institute, we see this through the lens of leadership. CEOs across enterprise, mid-market and SME businesses are under pressure to strengthen productivity, attract and retain talent, meet rising ESG expectations, manage stakeholder trust and make their organisations more resilient. Social procurement sits at the intersection of those pressures. It gives leaders a practical way to turn existing spend into measurable social, environmental and commercial value.
The supply chain is becoming a leadership lever
Social procurement is based on a simple but powerful premise: organisations can use the money they already spend to create broader social value. By partnering with certified social enterprises, businesses can procure goods and services while supporting employment, inclusion, community outcomes and environmental impact.
Social enterprises employ people who often face significant barriers to work, including refugees, people living with disability and those recovering from long-term unemployment. They also supply goods and services that meet community needs in underserved markets, and they provide environmental solutions across a growing range of categories.
The strategic value for CEOs is that this does not require a business to choose between commercial performance and social impact. When done well, an organisation receives the goods and services it needs, while also generating verified social and environmental outcomes through the same transaction.
In FY25, Social Traders reported:
- $304 million spent with certified social enterprises, a record single-year total, up 18% on FY24.
- $1.4 billion cumulative spend since FY18, with 35% average annual growth.
- 151 business and government members, and 735 certified social enterprises.
- 71% of members increased their spend year on year in FY25.
Across eight years, Social Traders member organisations have contributed to 13,383 jobs for people who face barriers to employment, one million training hours, $103 million in community goods and services, and 68,050 tonnes of waste diverted from landfill. In FY25, spend directed to marginalised women grew 56% year on year to $47.1 million, while spend supporting Aboriginal and Torres Strait Islander communities grew 69% to $18.8 million.
These outcomes matter because they are tangible. They are not abstract statements of intent in a sustainability report. They are the result of deliberate procurement decisions made by organisations that have embedded social performance into their supply chain strategy.
“35% average annual growth over eight years is not a trend. It’s a structural shift in how leading organisations think about their supply chains as a social performance driver. The businesses experiencing that growth aren’t doing it as a tick box. They’re doing it because it’s delivering real value, commercially and socially.”
— Tara Anderson, CEO, Social Traders
Why this matters for enterprise and SME leaders
For enterprise CEOs, social procurement is increasingly connected to ESG strategy, stakeholder confidence, government tenders, investor expectations and brand reputation. Large organisations are being asked to demonstrate measurable progress, not simply publish commitments. Supply chains are one of the clearest places to show that progress.
For SME leaders, the opportunity may look different, but it is no less relevant. Many SMEs do not have the same formal ESG infrastructure as large corporations. They may not have a dedicated sustainability team, social impact function or procurement transformation office. But they still have purchasing power, supplier relationships, local community presence and a need to differentiate themselves in competitive markets.
For an SME, social procurement can become a practical and credible way to demonstrate values through action. It can help build stronger local networks, appeal to employees who want to work for purposeful businesses, and strengthen relationships with larger customers that increasingly expect suppliers to understand and support ESG outcomes.
The CEO-level lesson is clear. Procurement is no longer only an operational function. It is becoming a visible expression of what the organisation values, how it manages risk and how it creates impact beyond its own walls.
More industries are getting on board
Property and infrastructure built the foundations of social procurement in Australia, and those sectors remain the largest contributors by spend. That is not surprising. Major projects, government frameworks and large procurement budgets created early momentum.
The next stage of growth is broader. In FY25, Social Traders saw membership growth across banking, consulting, energy, education, FMCG and transport. The energy sector provides a useful example, with new energy sector members joining Social Traders every year for the past four years. That pattern suggests that organisations are watching peers move and deciding they do not want to be left behind.
The questions have also changed. Five years ago, many organisations were still asking why they should engage with social procurement. Now, the question is more often how it works and what social value can be created. That shift matters. It shows that the business case is becoming more widely understood.
For CEOs, there is an important competitive signal here. When a practice moves from a small number of leading sectors into a broader cross-section of the economy, it becomes part of the expected leadership conversation. Early movers shape the standard. Late movers are often left explaining why they have not yet acted.
Spotlight: breaking the mould through bold procurement
When Southern Program Alliance, a joint venture comprised of ACCIONA, WSP, Metro Trains Melbourne and the Level Crossing Removal Project, lost its landscaping supplier on the Parkdale Level Crossing Removal Project, the team had a choice. They could take the safe route and find another traditional subcontractor, or they could use the moment to do something different.
They chose different.
At $3.8 million, it was the first time SPA had awarded a major landscaping package to a social enterprise. For Navaroo, the impact was transformative. Five skilled migrants gained more than 3,891 hours of meaningful work, alongside 185 hours of training. A two-year maintenance scope provided stable employment and career pathways. Navaroo’s supply chain spend also included $224,000 with other social enterprises, amplifying the impact beyond the initial contract.
“For us, it was more than a contract. It was proof that if you back people with the right support, they rise, and the work speaks for itself.”
— Hashan Senarathna, Director, Navaroo
That decision earned ACCIONA, SPA and Navaroo the 2025 National Social Procurement Impact Partnership Game Changer Award, setting a benchmark for what values-driven procurement can achieve when commercial decision-making is matched with leadership conviction.
Social procurement is moving into core spend categories
One of the strongest signals in the data is the movement beyond the categories historically associated with social procurement. Catering and cleaning remain relevant, but the growth is now in engineering, technology, architecture, planning, community services and building trades.
Engineering and tech services moved from $155,000 in FY20 to $11.6 million in FY25. Architecture, planning and design grew from $80,000 to $2.1 million over the same period. Community and social services reached $1.6 million, up from just $22,000. Building trades, repairs and maintenance, now the largest category by volume, reached $62 million in FY25, compared with $1.8 million five years ago.
This diversification changes the conversation. Certified social enterprises are not only providing ancillary services. They are competing and winning in areas that sit much closer to the core of business operations.
For buyers, the question is shifting from whether a certified social enterprise supplier exists to which certified social enterprise is right for the contract. That is an important distinction. It moves social procurement from a niche option to a serious part of supplier strategy.
Spotlight: Ventia and Australian Spatial Analytics
Since 2021, Australian Spatial Analytics, a certified social enterprise dedicated to training and employing young autistic adults in data analytics, has partnered with Ventia, a leading infrastructure services provider.
The unemployment rate for neurodivergent adults in Australia is 34%, which is 10 times the national average. ASA is helping to change this, with 80% of its workforce identifying as neurodivergent.
The partnership began with Ventia’s Queensland and Victorian Telecommunications project teams, with ASA undertaking design work on the nbn project. The team worked on revised sets of drawings submitted by subcontractors upon project completion, factoring in modifications and changes required during the build. The scope then grew to include more elements of the design process.
This partnership won the 2022 Social Traders National Game Changer Award for Queensland and the Northern Territory, recognising the positive impact delivered through social procurement.
Compliance opened the door, ESG is now driving the agenda
Five years ago, many organisations joined Social Traders because they were responding to policy. Tender weightings, mandatory government procurement frameworks and the Victorian Social Procurement Framework were major catalysts.
In 2020, 54% of new Social Traders members cited compliance as their primary reason for joining. By 2025, that figure had dropped to 45%. ESG and sustainability goals now account for 38% of new member motivations. The gap between compliance and ESG motivations has narrowed from 16% to just 7% in five years.
The trajectory is clear. Organisations are no longer engaging in social procurement only because policy requires it. They are increasingly doing so because social performance through the supply chain is becoming central to how they manage and report on ESG goals.
That shift has commercial implications. Businesses that can demonstrate credible, measurable social outcomes are better placed to strengthen stakeholder relationships, attract and retain talent, compete for work and reduce supply chain risk. Social performance is becoming a marker of industry leadership.
John Holland provides one example. For the second year running, it has been recognised for having the most diverse social supply chain among Social Traders members. In FY25, John Holland spent with 54 certified social enterprises, demonstrating a sustained commitment to supplier diversity and social value creation.
Repeat spend shows this is becoming systemic
The most meaningful behaviour in any strategic shift is repeat behaviour. Social Traders member organisations that spent with certified social enterprises two years in a row increased their spend by 47% in the second year. In FY25, 71% of active members grew their spend, while 26 organisations exceeded $1 million in annual spend.
That threshold matters. Once an organisation passes $1 million in annual spend, social procurement has typically moved beyond an isolated initiative. It has become part of the way the organisation thinks about supply chain strategy, procurement governance and impact measurement.
Organisations spending more than $5 million with certified social enterprises include ACCIONA, Ambulance Victoria, ANZ, CPB Contractors, Downer EDI, Fulton Hogan, John Holland, Laing O’Rourke, Victorian Infrastructure Delivery Authority and Visy Industries.
Organisations spending between $1 million and $5 million include Adelaide University, Bild Group, Built, Charter Hall, City of Moreton Bay, Conduent, CSR, Eastern Freeway BTA, Kinetic Group Services, Lendlease, Macquarie Group, McConnell Dowell, Mirvac, University of New South Wales, Ventia and Westpac.
These organisations are not treating social procurement as a side project. They are building it into the way they operate.
Spotlight: CPB Contractors and CareerSeekers
CPB Contractors spent $34.2 million with certified social enterprises in FY25, earning the Top Social Spender acknowledgement. One example of this approach can be seen in its partnership with CareerSeekers, a certified social enterprise supporting refugees and people seeking asylum into professional employment.
What began as a modest commercial arrangement between CPB Contractors and CareerSeekers is now a strategic, values-aligned workforce initiative. The partnership is in its third three-year agreement and has hosted 148 internships for 79 participants, with 57 securing permanent employment outcomes. That represents a 72% conversion rate. In 2024 alone, 22 interns joined the business, with five already securing ongoing roles.
Those outcomes position the partnership as a proven model for inclusive workforce development, not simply a procurement programme.
The leadership question now
For CEOs, the question is no longer whether social procurement belongs in the conversation. It clearly does. The more useful question is whether the organisation is using its existing spend as strategically as it could.
At an enterprise level, that may mean embedding social procurement into ESG strategy, procurement policy, tender processes, supplier diversity targets and board reporting. At an SME level, it may mean starting with a smaller number of supplier categories, building trusted partnerships and using social procurement as a practical expression of purpose and community connection.
The opportunity is not only reputational. It is commercial and cultural. It helps organisations show employees, customers, partners and communities that values are being translated into decisions. It also helps leaders build organisations that are more connected to the society in which they operate.
“Australia is moving faster on this than anywhere else in the world. We have the certified supplier base, the member network, and eight years of data to prove it works. The question for any organisation now isn’t whether to embed social performance; it’s how quickly they can get moving.”
— Tara Anderson, CEO, Social Traders
The organisations shaping the social performance leadership position are not waiting for policy to require action. They are investing in it because the commercial, reputational and human case is increasingly clear.
For CEOs and business owners across Australia and New Zealand, social procurement offers a practical reminder that leadership is often expressed through the decisions that already sit inside the business. The suppliers we choose, the contracts we award and the value we measure all say something about the kind of organisation we are building.
The time to lead in social performance is now.
This article was developed in collaboration with Social Traders, a leading industry body in social enterprise and social performance. Established in 2008, they’ve been supporting more than 300 businesses to track, measure and improve their social performance. Social Traders is also Australia’s certifier of over 700 social enterprises. Learn more at www.socialtraders.com.au