8 diversity, equity & inclusion (DE&I) credentials to starttracking on your suppliers today
Today, businesses all around the world are setting targets and KPIs to advance diversity, equity & inclusion (DE&I) throughout their organisations and value chain. But with so many dimensions of DE&I, how can you measure your progress?
Set out below is a snapshot of 8 DE&I credentials that advance ‘S – Social’ and ‘G – Governance’ to start trackingamong your suppliers. You will also learn why embedding DE&I beyond your direct workforce, and throughout your organisation's entire value chain is a game-changer for your business.
Women’s Empowerment Principles (WEP) signatory
Description: The Women’s Empowerment Principles (WEP) are a set of 7 principles offering guidance to business on how to promote gender equality and women’s empowerment in the workplace, marketplace and community. The WEP were established by the UN Global Compact and UN Women and were informed byinternational labour and human rights standards. The WEP are a vehicle forcorporates to deliver on gender equality dimensions of the 2030 agenda and theUN Sustainable Development Goals (UN SDGs).
WEP signatories are companies (private, public, state-owned and cooperatives) that have provided a signed CEO Statement of Support for the WEP. There are no formal requirements to implement the principles in a particular order, specific way or particular timeframe, however, WEP signatories are expected to make efforts to advance gender equality in the workplace, marketplace and community. Signatories are encouraged to monitor and report on their progress.
WEConnect International Certified
Description: WEConnect International is a certifier of women-owned businesses in 46 countries (excluding the U.S.) and a global network that connects women-owned businesses to qualified buyers around the world.
WEConnect International certified businesses are certified by WEConnect as being at least 51% owned, managed and independently controlled by a woman, or a group of women. Certifications must be renewed annually. A certified business can be decertified if it no longer meets the eligibility criteria.
Workplace Gender Equality Agency Agency (WGEA) Pay Equity ambassador
The WGEA works with Workplace Gender Equality Agency (WGEA) Pay Equity ambassadors, a network of CEOs, heads of department and directors in the public and private sector, who are committed to pay equity and gender equality. WGEA Pay Equity ambassadors help to create change by: (i) playing a leadership rolein their business community and to the broader public; (ii) reinforcing theircommitment to pay equity within their own organisation; and (iii) profiling andpromoting their approach to pay equity.
A WGEA Pay Equity ambassador’s organisation is required to have:
(i) undertaken a pay gap analysis of its workforce in the last two years andtaken action on the results; (ii) reported pay equity metrics to the executiveand board; and (iii) communicated the organisation’s pay equity initiatives to employees. Ambassadors sign the pay equity pledge and commit themselves toworking with the WGEA to promote and improve gender equality. An ambassador’s commitment to pay equity must be renewed every 2 years.rs.
Femeconomy approved businesses are members of Femeconomy that have been certified by Femeconomy as having at least 30% women on the Board of Directorsor being 50% female owned. Members are verified annually against these criteria.
National Minority Supplier Development Council Corporate Plus Member
Jurisdiction: United States
Description: The NMSDC advances business opportunities for certified minority business enterprises located in the US and connects them to corporate members. Certified minority business enterprises are at least 51% minority-owned, managed and controlled by one or more minority group members. A minority group member is an individual who is at least 25% Asian-Indian, Asian-Pacific, Black, Hispanic or Native American.
Corporate Plus® is a membership program for NMSDC-certified minority businesses that meet higher requirements than other minority business enterprises.
The Corporate Plus® members are recommended by corporate members for this designation, have demonstrated their capacity to execute national contracts for major corporations and have a minimum gross revenue of US$10 million p.a.
Supply Nation* Certified
Description: Supply Nation supports the Indigenous business sector, including through facilitating connections between Indigenous businesses and Supply Nation members’ procurement departments through its Indigenous business directory.
Supply Nation certified organisations are for-profit businesses located in Australia that are verified by Supply Nation as being at least 51% Indigenous owned, managed and controlled and have trading evidence of A$50,000 income in the prior 12 months. Supply Nation conducts annual audits to ensure continuing compliance.
*Note: givvable does not have an affiliation with Supply Nation
The Valuable 500 signatory
The Valuable 500 signatories are companies that have committed to putting disability on the business leadership agenda and to making and publicly sharingone firm commitment to action (of their choosing).
BuyAbility Social Enterprise
Description: BuyAbility is an initiative of the National Disability Service (NDS) aimed at growing supported employment to give people with disability the opportunity to participate in the workforce. BuyAbility is committed toincreasing employment opportunities of people with disability through socially responsible procurement opportunities for BuyAbility Social Enterprises.
BuyAbility enterprises are National Disability Services members that currently (or previously) had a Disability Employment Assistance Funding Agreement withthe Department of Social Services to provide supported employment for people with disability.
BuyAbility enterprises employ people with disability in a supported working environment. BuyAbility enterprises offer a range of roles and employees aresupported to work, develop new skills and participate in their communities, thereby enhancing their economic and social participation. All products andservices from BuyAbility enterprises are quality assured and Australian made and operated.
What is Diversity, Equity & Inclusion?
Diversity, Equity & Inclusion, or DE&I, is a term used to describe the policies and programs of an organisation that promote the representation and participation of different groups of individuals.
Diversity includes all ways that people are different from each other, including age, gender, race and ethnicity, abilitiesand disabilities, language and culture and sexual orientation.
Equity aims to ensure the fair treatment, access, equality or opportunity and advancement of people, while also attempting to identify and remove the barriers that have prevented some groups from fully participating. It promotes justice, fairness and impartiality within the processes, procedures and distribution of resources of an organisation.
Inclusion builds a culture where everyone feels welcome by actively inviting every person or every group to contribute and participate. A work environment that is inclusive is supportive, respectful, and collaborative and aims to get all employees to participate and contribute. It also endeavours to remove all barriers, discrimination and intolerance within an organisation.
Why is it important?
The business case for DE&I in your organisation continues to get stronger.
Time has given us more data, and the research is in. It consistently shows that organisations with diverse leadership – by gender (+25%) and ethnic diversity(+36%) – are more likely to outperform financially, with higher ethnic representation placing organisations well ahead of their peers (McKinsey,2020).
DE&I is a competitive advantage and business differentiator. Inclusion matters to your employees, helping your organisation attract the best talent, which in turn translates into financial outperformance for those organisations making it a priority.
Unfortunately, many companies perform poorly on DE&I. McKinsey data reveals slow growth in diverse representation, with many companies stalling or even slipping backwards.
Companies that implement systematic, business-led approaches to DE&I, lay the foundations for higher, more consistent returns over the long term. In an era of ‘fast everything’, it gives your organisation an edge over competitors that cannot be replicated overnight.
How does DE&I relate to ESG?
Environmental, Social & Governance (ESG) criteria are a set of standards used by investors to analyse potential investments.
Environmental criteria consider how an organisation performs as a steward of nature.
Social criteria examine how an organisation manages relationships with employees, suppliers, customers and the communities where it operates.
Governance deals with a company’s leadership, executive pay, audits, internal controls, transparency and accountability, and shareholder rights
DE&I falls into the ‘S - Social’ and ‘G - Governance’ criteria of ESG. It is the subject of investment mandates and, increasingly, a KPI in executive remuneration and sustainable finance (e.g. sustainability-linked loans). Stakeholders expect to be informed about how your organisation is performing on these indicators.
Why do you need to track it?
Here is the game-changer:
The conversation on DE&I has largely focused on workplace diversity and inclusion. With sustainability & ESG squarely inthe spotlight, many companies are recognising that they cannot achieve their sustainability & ESG targets without aligned pools of suppliers.
Just as “diversity wins” for your own organisation, the same applies to your suppliers and trading partners. By engaging suppliers that are owned or led by people from diverse groups, or which have implemented DE&I workplace policies and practices, you multiply the benefits of a long-lasting inclusive culture throughout your entire value chain.
Supplier DE&I is a relevant metric to include in ESG reporting.
How do you identify DE&I suppliers?
There are numerous dimensions of diversity, including gender or sexual orientation, Indigenous and other ethnic or cultural minorities, people with disability, veteran and refugee – all bringing rich perspectives & experiences that help you deliver better customer and client experiences.
Certification and membership bodies exist to help companiesidentify diverse business owners and actively seek to improve the ratio of suppliers considered in a company’s discovery and tender processes.
DE&I bodies usually focus on a particular dimension of diversity and can have global coverage or defined jurisdictional coverage - with country or even locally administered schemes. They can also differ in type (e.g., certification, registration and membership) measurement (e.g., 50% vs.>51% owned), and scope or depth of enquiry.
There are also other third-party maintained credentials, including indexes, recognising workplace inclusive practices or measuring the relative inclusiveness of an organisation based on employee surveys and questionnaires, for example Great Place to Work’s Australia’s Best Workplaces 2021, Refinitiv’s diversity and inclusion top 100 and Financial Times Diversity Leaders 2021.
Add to this the dynamic nature of DE&I attributes. Businesses are bought and sold. Employee changes occur constantly. Policies & practices are updated and modified. Tracking this information internally is a difficult data management task and, captured point-in-time, will quickly date.
Externally managed DE&I certification & membership programs provide organisations with an effective way to screen suppliers for DE&I criteria linked to ESG objectives. The challenge faced by ESG, Sustainability & Procurement professionals is the multi-variate and highly fragmented nature of this data. It makes getting a complete and accurate picture on the DE&I profile of your suppliers difficult.
It is no secret that the ESG data task is huge. ESG on your direct or internal operations is complex enough. Multiply that by your suppliers – where the opportunity to achieve even greater performance on sustainability lies – and it can seem like an impossible task.
Going forward, suppliers will increasingly need to get formal, third party validated recognition of their DE&I (andother sustainability/ESG) credentials and attributes, and organisations will require digital solutions to continuously track them for internal and external reporting to stakeholders, particularly where KPIs and target spend requirements are in place.
Note: Information on credentials has been sourced from the credential issuer's website.
This article was written by givvable.com. givvable.com is an AI-Powered Supplier Intelligence Platform helping businessestrack third-party verified credentials and attributes of suppliers mapped toglobal sustainability & Environmental, Social and Governance (ESG) targets, frameworks and reporting standards.