Diversity and Inclusion (DI) - simply human
Diversity and inclusion in the supply chain have become more contested topics since this post was first written in 2023. In parts of the world - particularly the United States - political pressure has led some large companies to publicly scale back their supplier diversity programmes, while continuing many of the same practices under different labels. The noise around the politics of D&I has, in some boardrooms, become an excuse to deprioritise what was never really a political question in the first place.
My position has not changed. D&I in sourcing is a business decision, a human decision, and increasingly a regulatory one. The companies treating it that way are doing better - on talent, on market access, and on the bottom line - than those treating it as a compliance checkbox or, worse, abandoning it because it became inconvenient.
Where D&I sourcing comes from
The history is worth understanding because it explains why this is not a passing trend. US supplier diversity has its roots in the civil rights legislation of the 1960s. President Kennedy's 1961 executive order introduced affirmative action into federal contracting. Nixon's 1969 order extended that to require government contractors to engage minority-owned businesses, with results reported against defined targets. Companies like IBM, General Motors, Ford, and AT&T launched their first supplier diversity programmes in that era - not because it was fashionable, but because it was embedded in the conditions of doing business with the federal government.
On a global level, the 2015 UN Sustainable Development Goals - the culmination of a process that began at the Rio Earth Summit in 1992 - set diversity and inclusion as two of seventeen goals tracked annually by member states and used as a reporting benchmark by a growing number of multinationals. The SDG framework is now the de facto gold standard for sustainability reporting in most of Europe and increasingly in Asia.
The history reveals that D&I progress follows the same formula as any other durable organisational change: clear goal-setting, governance, and relentless reporting. Nothing more exotic than that.
The business case, stated plainly
Companies that have embedded genuine D&I sourcing programmes - Cisco, Nestlé, SAP, Unilever, Procter & Gamble, Johnson & Johnson, and IBM, among the larger ones, and a long tail of mid-sized firms across the US, UK, South Africa, and Europe - consistently report positive impacts on employee satisfaction, supplier innovation, and market perception. The bottom line follows.
The argument that D&I suppliers are more expensive or harder to qualify is not supported under scrutiny. Small cost differentials, where they exist, are typically absorbed within the same spend category without any net cost increase. The real barrier is almost always internal: procurement teams that have not been trained on how to find and develop diverse suppliers, and leadership that has not made it a genuine priority.
Eight questions to assess where you stand
Do you understand the D&I regulatory requirements in the markets you sell into, and is your supply base managed accordingly?
Have you set measurable D&I sourcing targets and established a baseline trend over time?
Is your D&I track record improving consistently and reported quarterly inside and outside procurement?
Can you differentiate your D&I reporting by ownership category - race, gender, and other relevant criteria?
Are your ESG objectives aligned with the 17 UN Sustainable Development Goals, supported by dedicated resources and ring-fenced budgets?
Is D&I supplier development genuinely cross-functional rather than owned solely by procurement?
Do you actively promote D&I suppliers internally - through internal communications, events, and leadership visibility?
Are you an active member of relevant D&I associations such as NMSDC, WBENC, WEConnect, or regional equivalents?
A clear yes to most of those means your programme is in solid shape. If most are no or unclear, the gap is real - and so is the opportunity.
Setting up the programme
The timeline is 18 months, with the CHRO or CEO as board sponsor and the CPO leading execution. The work is straightforward: define overall and category-level targets, set up tracking and reporting systems with clear metrics from the start - percentage of spend covered, number of suppliers by D&I category, percentage of buyers trained - and communicate progress throughout the organisation without softening the current-state picture. Honesty about the gap earns more respect than a polished narrative about aspirations.
Change management matters more here than in most supply chain programmes, because the resistance is typically cultural rather than technical. The most common failure modes are lip service without action, blaming unavailability or quality of D&I suppliers - which is almost always inaccurate - and blind spots about where diverse suppliers actually exist. They are present across every spend category: law firms, accounting firms, logistics providers, IT services, insurance, facilities management. The assumption that D&I sourcing only applies to manufacturing or direct materials is itself a gap.
Quarterly reporting to the executive board, consequence management when targets are missed, and celebrating visible wins are what sustain momentum beyond the first year.
The investment required is modest. D&I suppliers are not more expensive as a category. The cost is primarily internal: time, training, and the will to hold the organisation accountable.
It is not difficult. It just needs focus.
Stay safe. Be bold.
Daniel
The views expressed in this post are my personal professional opinions, based on research and publicly available information. They reflect analysis of industry trends and practices, not assertions of fact about specific companies or individuals. Nothing in this post constitutes legal, financial, or investment advice.
