Supply chains are the missing link in D&I

Are organisations doing enough to promote diversity and inclusion on their supply chains? In short, no.

The consideration of D&I within supply chains often ends up way down on the list. But in reality, paying attention to this key area is critical to building a truly diverse and inclusive ecosystem.

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It’s well-established that diversity can fuel innovation and creativity, and ultimately improve the bottom line. But where do supply chains come into play in the equation?

There are two key points for organisations to consider:

  • How can they ensure that their suppliers are aligned with their D&I vision and organisational values?
  • What actions can they undertake to ensure that their supply chain is diverse and, if possible, representative of the communities within which they serve and operate?

Supply chains naturally create risk around D&I for organisations. When third parties deliver services and interact with customers, members of the public, or are working in communities, they are directly representing the organisation they work with, and that inherently carries risk. Suppliers are working on the business’ behalf and their culture can directly impact the client firms’ reputation both positively and negatively.  

These risks can be mitigated if businesses ensure that contractors are aligned to similar values and vision their brand upholds. However, embedding D&I within supply chains is about more than just mitigating risk.

Setting appropriate and proportionate contractual requirements and clear KPIs will encourage suppliers to think about how they might also build diverse, equitable, and inclusive working environments and provide their services in an inclusive way. This will build a more sustainable and robust chain, with suppliers reaping the benefits of creating a diverse and inclusive workforce.

Organisations that aren’t including D&I requirements within their contractual arrangements with suppliers are missing an enormous opportunity to promote D&I more broadly beyond their workforce and become a force for change.

To attract and retain businesses owned and/or led by people from diverse backgrounds and those who are currently under-represented in the supply chain, organisations must first put systems in place that will enable them to monitor diversity. Once a picture is obtained of the diversity of the chain, the information can be used to proactively target suppliers from diverse backgrounds and inform exercises that will reveal why this is the case.  

Perhaps most importantly, if organisations want to embed D&I within their supply chains, they must understand that there’s a cost associated with this. It needs to be resourced, led from the top, and people held accountable for its implementation and (or lack of) progress.

If there are companies in the supply chain that don't want to commit to improving D&I within their organisations, and do the basic stuff, it’s time to ask, as a business, if working with them is the right decision.  

By tasking suppliers to build D&I into their culture and practices, there’s a ripple effect as it encourages more businesses to follow and invest in collaborative efforts towards building competitive, diverse, and sustainable supply chains. Influencing and reminding businesses of their social responsibility is paving the way to an improved society - one supply chain at a time.


Rosanna Duncan is chief diversity officer at Palladium


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