Supplier diversity and the Black Lives Matter movement

PL Staff

By pursuing supplier diversity in both public and private sector organisations, we have the power to make a long-lasting difference, writes MSDUK founder Mayank Shah

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The events following George Floyd’s death have seen people all over the world demanding justice and equality, denouncing racism and discrimination across global institutions and industries. The Black Lives Matter movement has reached every one of us. For the first time, we are seeing a collective response from corporate leaders, who are not only releasing statements of support but are announcing actions and measures to tackle these issues.

Whether you are a journalist, political activist or writer, addressing issues of socioeconomic inequality, criminal injustices, systemic and structural racism requires a collective effort from all of us.

Economic empowerment and supplier diversity

As the founder of a leading non-profit organisation in the UK that champions supplier diversity by supporting Ethnic Minority Businesses (EMBs), I was recently asked to make a statement about MSDUK’s position on these issues. Speaking at a virtual business opportunity event this month, I shared my views on how we can start to move forward and address economic inequality.

As a social entrepreneur, I am good at finding solutions to these types of problems. I am not an activist, a historian nor a public speaker; I see a problem and seek a solution. Addressing economic inequality is exactly what MSDUK has been doing for the past 16 years. By pursuing supplier diversity in both public and private sector organisations, we have the power to make a long-lasting difference.

Calling FTSE 100 to commit to spending 1% of revenue with ethnic minority business

Supplier diversity helps to reduce economic inequalities by encouraging entrepreneurship in disadvantaged communities. Over time, this leads to the creation of jobs and an increase in wealth within those communities, which subsequently leads to better living standards and improved levels of health.

However, both the private and public sectors in the UK have been too slow to realise the full potential of supplier diversity as a powerful tool to drive social and economic change. Only five FTSE 100 and twelve Fortune 500 firms are MSDUK members.

We are asking all FTSE 100 firms and global corporations with a significant presence in the UK to make supplier diversity a core part of their strategies. We urge organisations to make a public commitment to do business with EMBs and to back this with measurable targets. We ask all FTSE 100 firms to commit to a minimum of 1% spend of their annual revenue with EMBs and we are starting this campaign by asking all current MSDUK corporate members to make this commitment.

When it comes to the public sector, sadly, the position of organisations is even worse in the UK. None of the 24 government departments nor any local councils in the UK has a remit or mandate around supply diversity – this needs to change and must do so quickly.

Lack of data around ethnic minority businesses

One of the biggest challenges is a lack of data on business ownership in the UK. The UK government does not monitor the ownership of businesses around ethnicity or gender. How can you produce policies to support disadvantaged business groups if you do not collect or analyse any data? Quality data helps to develop informed policies that have a lasting impact.

For the past 20 years, MSDUK and many other business support groups, as well as academics, have been asking the government to measure business ownership without any success. We are asking the UK government to direct Companies House to include questions around the ethnic background and gender of directors and business size, each time a new company is registered and when annual tax returns are submitted.

Commit to socioeconomic change

MSDUK is committed to lead from the front to bring about this socioeconomic change. A growing economic inequality sits right at the heart of social injustice, poor health, housing, and education levels within Ethnic Minority Communities across the UK. But we can only succeed if we get more corporate organisations to join us, and more Ethnic Minority Businesses to become part of this movement. MSDUK is offering a one-year free membership to EMBs.

Calling the public sector to rise to the challenge

And, if we want the private sector to deliver on these promises, we also need public procurement policies. We need to make supplier diversity mandatory in government tender and contract processes. All underrepresented business groups – ethnic minorities, women and others – should be a key part of the government’s policy to spend 33% with SMEs.

The UK Government has to implement provisions of The Social Value Act 2012 which calls for all public sector commissioning to factor in (“have regard to”) economic, social and environmental well-being in connection with public services contracts.

Only by working together, will we be able to create more opportunities and more business. So, let us all come together now to build a fairer, more equal, and more inclusive society.

MSDUK is committed to raising socioeconomic change issues by:

  • Calling British firms to take supplier diversity seriously.
  • Calling the UK government to make supplier diversity mandatory in public procurement.
  • Showcasing the best of British Ethnic Minority Businesses (EMBs).

Mayank Shah is founder and CEO of MSDUK. This is a guest post, written at the invitation of Procurement Leaders.

MSDUK is currently running campaigns using these two hashtags: #EMBMatters and #SpendwithEMBs. Please follow our campaigns and share with your online networks.

For more information about MSDUK, please contact us.

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