Background information

In a globalising economy with enhanced mobility of people, goods, services, capital and information, diversity is increasingly seen as a business asset. In order to be competitive and to survive, organisations must reach out to the untapped resources that diverse suppliers represent. The products and services offered to the consumer base must begin to incorporate a wider audience and understanding of all unique populations. 

European countries, with their diverse communities, are an obvious choice for multinational businesses to reap the benefits of diversity. However, all too often under-represented business partners are not utilised by multinational and national businesses, public bodies and governments. Consequently, their full potential has not yet been realised.

Corporate Social Responsibility

Encouragingly, a number of companies and organisations are beginning to recognise the benefits of working with these under-represented businesses, often as part of their corporate social responsibility endeavours, and are strategically incorporating diversity principles into their purchasing policies. Taking such corporate action can stem from enlightened self-interest. Companies and organisations need to be able to service a culturally diverse community and client base. Under-serviced and under-represented communities profit from market creation and economic stability. By promoting Supplier Diversity, companies, organisations and the wider community benefit, creating a 'win-win' situation and strategy for all.

Hence the benefits of Corporate Social Responsibility initiatives such as Supplier Diversity are potentially plentiful: a wider and more loyal customer base, new partners for import and export, improved services and enhanced reputation. In addition, European public bodies are taking a lead in actively promoting Supplier Diversity in their own capacity as 'a business'; often they are the largest employers and purchasers of goods and services.

Nevertheless, people from ethnic minority communities and women still face economic marginalisation, high unemployment rates and glass ceilings. This has created significant pressure on governments to legislate on equality issues. As a result, the legal landscape in Europe is changing. At the European Union level, legislation has recently been adopted to protect people against discrimination on the basis of race and ethnicity, religion and belief, disability, age and sexual orientation. In addition, European legislation against gender discrimination has been strengthened.

At present, this new body of legislation makes discrimination punishable, but does not permit positive discrimination or affirmative action. However, there are clear indications that European legislation regarding public procurement may in the near future be widened to achieve social objectives, e.g. requiring companies actively to recruit and/or select under-represented suppliers for public contract work. Companies that have Supplier Diversity programmes in Europe may gain competitive advantage in bidding for public contracts.