SAP launches 5 & 5 by '25 initiative

SAP's 5 & 5 by '25 initiative aims to spend five percent of addressable procurement spend with social enterprises and companies that promote diversity by 2025. With this goal, SAP aims to inspire more companies around the world to buy more goods and services from socially engaged suppliers and thus make a positive impact on the societies in which they operate.

According to the World Bank, global procurement spending in 2019 was at least $14 trillion. By directing a fraction of this spend to certified social enterprises, organizations have the opportunity to address social and environmental issues.

Based on initial pilot projects in selected markets, SAP estimates that by 2025 it will be able to allocate up to US$60 million of addressable global spend per year to social enterprises and diversity companies. This figure is estimated at around €2.5 billion for DAX companies and up to US$25 billion for U.S. Fortune 500 companies.

Social enterprises are focused on making a positive difference in the world. They are similar to other commercial enterprises, but with three key differences: they are founded and managed on the basis of a clear social or environmental mission; they reuse the majority of their profits for that purpose; and they are audited primarily against the backdrop of that mission.

A diversity-focused supply chain favors businesses that are at least 51 percent owned and operated by an individual or group that is part of a traditionally underrepresented or disadvantaged population. These include women-owned, minority-owned, and Native American-owned businesses, to name a few.