By Stacey Abrams & Lara Hodgson | Fast Company | February 15, 2022
Last year, corporate business leaders pledged to support businesses led by people of color and women with investments and programs to the tune of millions of dollars. Many of these pledges were made in the wake of social movements and protests to address racial and economic disparity. Some of these pledges and new programs have been successful, especially with supplier diversity becoming an essential rather than a “nice to have” for corporate America. Despite the progress, there is still much more that can be done.
As MIT Sloan Management Review writes, “Even though 85% of Fortune 100 companies in the United States have [supplier diversity] initiatives, only 59% of these companies report how much they source from diverse suppliers, according to our research. These companies procure on average only 10% of their supplies and services from diverse suppliers.”
Organizations across every industry must increase their efforts to build an inclusive economy. But what can companies do to fulfill their pledges and make the sustainable, long-term impact intended through their commitments?
THE TOUGH PART OF SUPPLIER DIVERSITY
After the press releases went out and the task forces were created, many Fortune 100 companies found that achieving their stated goals was much harder than they thought it would be. As reported in Harvard Business Review: “More than half (53%) of Black business owners report that their revenue dropped by at least half since the pandemic began, compared to 37% of white owners,” according to data from H&R Block. This data speaks to an underlying fundamental that often goes unaddressed: Access to capital is not complete without access to commerce. These underrepresented business owners need corporations to buy from them…
