By Waka Itagaki
International organizations such as the United Nations (UN) and the World Bank have significant purchasing power. In 2014, the UN purchased $17.2 billion in their procurement process. Despite this purchasing power, international organizations have arguably not made the most of it to generate social impact across the world. “Buy Social,” a procurement process that seeks not only economic value but also social and/or environmental impact, has the potential to be transformative. This article highlights the benefits and challenges of Buy Social compared to “Socially Responsible Procurement,” and recommends that international organizations implement Buy Social.
There is no widely agreed term to describe this kind of socially conscious procurement. This article uses “Buy Social” but other names include “Social Procurement,” “Socially Impactful Procurement,” “Social Impact Purchasing,” “Social Purchasing,” and “Socially Impactful Purchasing.” It is important to note that Buy Social is different from Socially Responsible Procurement, which is already implemented by international organizations.
Socially Responsible Procurement applies negative or positive screens to bidders by using a “do no harm” approach. For example, the UN buys from companies that meet labor standards of the International Labour Organization (ILO). Socially responsible procurement typically only considers if a bidder is a business with social consideration, and does not measure the outcomes.
By Waka Itagaki
This article is the second in a series from this author on the topic of impact investing. For Waka Itagaki’s earlier post on reducing transaction costs in development impact bonds, please click here.
Introduction and Background
The role that impact investors are playing in international development is increasingly growing. The amount of assets under management (AUM), the total market value of investments managed by financial institutions, in emerging countries was $36.4 billion in 2015. This is larger than the net Official Development Assistance (ODA) provided by the United States. International development actors should pay attention to this shift and become acquainted with the work of impact investors. One way to do this is through reading the annual impact investor surveys conducted by the Global Impact Investing Network (GIIN).
GIIN is a nonprofit organization that supports activities, education, and research that accelerate the development of a coherent impact investing industry. GIIN has conducted annual impact investor surveys since 2009 by leveraging its network of impact investors, and the surveys provide information on the current situation of impact investors. However, these surveys fail to acknowledge how impact investors are changing over time. Moreover, there is not much literature by other stakeholders that analyzes the data and discusses trends in impact investing in a consumable way. This article fills this gap by analyzing six GIIN surveys from 2009 to 2015 to illustrate how impact investors are changing.
By Michael Jacobs
Last month’s signing of the long-delayed U.S.-Afghan Bilateral Security Agreement (BSA) allows American troops to remain in Afghanistan beyond 2014, providing a measure of security and stability for the country. The BSA is significant, but eventually American troops will head home. While U.S. military advisers and intelligence capabilities will likely remain in place for years, sometime soon Afghans will be substantively responsible for their own security and stability.
The BSA provides an opportunity for the U.S. to secure the progress we’ve established in Afghanistan over the past thirteen years. So far the cost has been high in both dollars and lives, and as we’ve seen in Iraq, those gains can be erased very quickly. At a minimum, Afghanistan’s long-term stability will hinge on a capable military and an inclusive government, but also on broad economic development: countries with an additional 2 percentage points of economic growth sustained over 10 years have been shown to have their risk of civil war reduced by 28% when compared to the risk of civil war in a typical low-income country.
U.S. Ambassador James B. Cunningham signs the BSA with Afghan National Security Adviser Hanif Atmar (September 30,2014)