Buying travel to impact social good

When Siemens UK travel commodity manager Emma Eaton visited Business Travel Show Europe in London last year, she stayed at a different hotel than the other hosted buyer visitors. Eaton checked herself into Good Hotel London, a property she had recently added to Siemens’ preferred supplier list not only because it meets the company’s quality and price standards but also because it is a social enterprise.

Social enterprises are businesses that allocate at least 50 per cent of profits for philanthropy, such as training and supporting disadvantaged people. In most cases, including Good Hotels’ parent Good Group, the figure is 100 per cent. All Good Group profits fund Niños de Guatemala, a foundation providing education to 500 children in Central America. Good Hotel London also provides a training programme for long-term unemployed people in Newham, the borough where it is located and one of the poorest in the UK.

Eaton is one of a tiny but growing number of travel and meetings managers aiming to buy social, a phrase she defines as “the opportunity for corporates to use their purchasing power to do good. Instead of just using our purchasing volume through traditional routes, it’s looking at buying from the many wonderful organisations which exist to improve the lives of people who need some help.”

Another convert is Faye Carter, London-based head of experiential at Deloitte. Like Siemens, Deloitte is one of 30 large corporations to have joined the Buying Social Corporate Challenge, which aims to get them spending £1 billion annually through social enterprises.

Deloitte has already used Connection Crew, a community interest company which employs, trains and generally supports homeless people, to build stages and provide other support at events. It also hired Luminary Bakery, which trains and employs socially disadvantaged women, for a virtual 'bakealong' as a Christmas staff activity.

“Our aim is to accelerate spend with social enterprises next year,” said Carter. “Why not spend money on businesses that maximise their impact on society and the environment?”

A changing mindset for purchasing
It is a sentiment wholeheartedly endorsed by Eaton. “Instead of being part of an isolated corporate world, you’re actually doing some good in society, which I feel with the size of our purchasing volumes we have an obligation to do,” she said. “I see this more and more as a duty than something nice to do.”

The entire Siemens UK supply chain team became actively engaged in buying social two years ago. “I was then able to think about how to apply it to my sourcing approach and communications,” said Eaton. “In the last six months it feels like it has really accelerated. It’s trickling through many different parts of our organisation now, not just within central supply chain management but going out to our divisions as well.”

Outside travel, Siemens has replaced its global stationery supplier in the UK with WildHearts Office, a social enterprise whose profits go into a foundation that addresses gender inequality and provides entrepreneurial training for people from deprived backgrounds.

Social Enterprise UK, the body which created the Buying Social Corporate Challenge, measures corporate spending with social enterprises in terms of the number of lives positively impacted. “Through that metric we have set ourselves a goal of positively impacting as many lives as we have employees,” said Eaton. “We are hoping to achieve one-to-one by the end of 2022.”

How far that goal can be reached through travel and meetings sourcing remains to be seen. “For travel it’s a huge challenge,” said Eaton. “We have just two [social enterprise] hotels as direct suppliers. There aren’t any airlines which are social enterprises; there aren’t any train operating companies, car hire providers or anything like that. That makes it difficult because obviously you have the most influence with your first tier of suppliers.”

The situation is healthier for meetings, with a good number of venues from which to choose (see sidebar for an example). For transient travel, according to Eaton, buyers need to think more in terms of secondary suppliers – in other words, the supply chain used by direct suppliers. 

“There is a wonderful range of social enterprises that the hospitality and travel industry could utilise,” she said. “Even if they were just to build in one or two, when you think of the number of chains that there are, that’s immense.”

Social Enterprise UK has given Eaton a list of potential secondary suppliers, including purveyors of tea, coffee, beer, wine, toiletries, stationery and plants. One example is Change Please, a coffee company whose entire profits are spent on reducing homelessness. Since 2019, its coffee has been used by Virgin Atlantic both in the air and in its lounges.

Eaton addressed buying social in her hotel request for proposal process for 2022. She discussed the topic in a virtual conferencing session with prospective suppliers and included a question about use of social enterprises in the RFP itself.

“We’re also asking if they are sourcing locally because from an environmental as well as a social perspective that’s very beneficial and I wouldn’t wish to discourage such suppliers on account of not being social enterprises,” Eaton said.

Answers to her RFP question will be material to Eaton’s property selections. “Where there is a good choice in the market, I will definitely use that as one of my key decision-making criteria,” she said.

Eaton encountered a mixed response from hotels in terms of knowledge levels and sincerity of engagement. She also acknowledges that many hotels are struggling simply to survive Covid. But if nothing else “it planted a seed with those hotels and hopefully that seed will grow so that when the pressure is off a bit more financially, it is something they can revisit,” she said.

The question of cost and other challenges
There are conceivable challenges to buying social beside the paucity of social enterprises in the travel sector. Eaton deals with each of them comfortably. The first is whether it costs more. She believes this question must be addressed in the context of the human cost when a cheap supply is built on child or slave labour or, more often, legal but miserable working conditions. 

“Everybody has had to re-evaluate their ethics,” said Eaton. “It’s become more understood now that sometimes to be more ethical and do the right thing does cost you more. But if goods are going to cost more, then you think more carefully about your consumption of them. So in procurement terms it’s all about demand management. 

“And it’s not always the case that things are more expensive. If I look at the example of Good Hotel, it’s well within our rate cap. And knowing our spend is doing some good for society is far more valuable than swimming in a pool at another hotel nearby.”

Another potential worry is supplier failure. “Most social enterprises are very small, so it is a risk,” she conceded. “You would always have a contingency plan in place for critical suppliers, but social enterprises tend not to be critical suppliers. They’re not producing chemical ingredients. They’re producing simple goods and services which could be switched should the need arise.”

Finally, there’s the question of quality. “Understandably, the terrible challenges that some people trained by these organisations have had to work through in their lives means they might not always deliver the same customer service as someone with decades of experience in that profession,” Eaton said. “You need a bit of compassion and empathy to understand sometimes it is more difficult for them. 

“There are pros and cons to anything but if you make people internally aware of the quirks of the social enterprises and the need to weigh up against the benefits delivered, then hopefully there will be that level of understanding. But if there are improvements to be made, then as with any supplier, no matter who they are, we would work with them to communicate that and to improve.”

That said, neither Eaton nor Carter has had any bad experiences with social enterprises. On the contrary, because social enterprises think differently from big businesses, they often offer much more distinctive service. Good Hotels, for example, has no televisions in its bedrooms. Instead, guests are encouraged to mix in the downstairs area, known as the 'living room'. Eaton spent two happy hours there during her stay making new acquaintances with whom she remains in contact.

Likewise, social enterprise meetings venues are often more interesting than standard hotels. And, as a bonus, said Carter, social enterprise leaders make excellent speakers. “Invite them to come and speak at your event,” she said. “We’ve had very good experiences. Many of them have amazing stories to tell.”

For any travel buyer contemplating buying social, Eaton offers encouragement. “Start conversations with people already engaging with social enterprises,” she said. “You'll realise how easy it is to change people’s lives just by doing your day-to-day job.”