Recently, several major US companies with a significant presence in the UK and Europe – such as Harley-Davidson, Molson Coors Beverage Co., and Brown-Forman, the parent company of Jack Daniels and Woodford Reserve – have been scaling back their Diversity, Equity, and Inclusion (DE&I) efforts.
Driven by financial pressures and political challenges in the US, these moves prompt important questions for UK businesses: Are we at risk of heading in the same direction? What might this mean for our supply chains? And how can UK firms ensure diversity remains a priority, especially in procurement?
At a time when global brands are reassessing their DE&I strategies, UK businesses must remain steadfast. Supplier diversity isn’t merely about adhering to ethical standards; it’s a vital driver of innovation and resilience. By maintaining a focus on diverse suppliers, businesses can foster growth, creativity, and competitive advantage, as well as, de-risk their supply chain.
Why Are US Companies Scaling Back on DE&I?
The reduction in DE&I efforts among US companies is largely due to economic pressures and political challenges. The pandemic’s economic fallout, rising inflation, and increased costs have led many businesses to scrutinise their expenditures. Unfortunately, DE&I initiatives are sometimes deemed expendable in this context. Additionally, political opposition in certain US states has intensified the pressure, making it harder for companies to sustain robust DE&I programmes.
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However, the landscape in the UK is different. Here, diversity is not just a box to tick; it’s integral to business success. UK consumers, employees, and stakeholders expect companies to uphold high ethical standards, and a diverse supply chain is essential for maintaining trust, driving innovation, and enhancing a brand’s reputation. Scaling back on diversity could hinder your ability to attract top talent and foster customer loyalty.
The Impact on UK Supply Chains
For UK companies, overlooking supplier diversity presents serious risks. Minority-owned suppliers often bring fresh perspectives, agility, and innovative solutions that larger, traditional suppliers may lack. Neglecting these suppliers means missing out on opportunities that could enhance competitiveness and drive growth. Additionally, there is a reputational risk. In the UK, diversity is increasingly viewed as a marker of corporate responsibility. Customers expect businesses to align with these values, and cutting back on DE&I could alienate consumers who care about social impact. This could result in a loss of customer trust and, ultimately, sales.
The Risks of Ignoring Supplier Diversity
Ignoring supplier diversity can also stifle business growth. Companies that work exclusively with traditional suppliers may miss out on innovative solutions and flexible partnerships that could provide a competitive edge. Minority-owned businesses often offer unique insights and access to niche markets, creating fresh growth opportunities.
Additionally, minority-owned businesses play a vital role in the economy. Our research shows that in Europe, there are at least 800,000 minority-owned businesses, generating a combined turnover of over €570 billion and employing 2.7 million people. In the UK alone, according to the NatWest “Business Growth Report”, ethnic minority businesses (EMBs) contribute more than £25 billion annually to the economy. With the right support, this figure could rise to £100 billion. These figures highlight the untapped potential of fully integrating minority-owned businesses into mainstream supply chains.
Moreover, the UK government actively promotes diversity in procurement, particularly within the public sector. ESG is important. Organisations that demonstrate social value, including diversity and inclusion, are more competitive when bidding for public contracts. Reducing DE&I efforts could hinder your ability to win new business, especially from clients and sectors that prioritise social responsibility.
How UK Businesses Can Stay Ahead
While a few US companies are scaling back on diversity efforts, many are expanding the global supplier diversity programmes, UK businesses have the opportunity to lead by example. By reaffirming their commitment to supplier diversity, companies can differentiate themselves and strengthen their operations. Partnering with organisations like MSDUK can help identify and integrate diverse suppliers into procurement strategies, ensuring diversity remains a core business principle.
The Power of Supplier Diversity
As some US businesses reduce their DE&I efforts, UK companies can take the lead by prioritising diversity in their supply chains. Far from being an additional cost, diversity is a valuable investment in innovation, resilience, and long-term success.
By staying committed to supplier diversity and collaborating with expert organisations, UK businesses can future-proof their operations, enhance their reputations, and remain competitive in a rapidly evolving market. Embracing diversity is not just a business trend—it’s essential for building stronger, more sustainable, innovative companies.
Reshma Sheikh, CEO of MSDUK, is a dedicated advocate for supplier diversity, ensuring ethnic minority businesses gain access to corporate supply chains. With a background as a corporate lawyer and ethnic minority business leader, her expertise is matched by a deep understanding of the challenges these businesses face. Her influence extends beyond her role, with board memberships and speaking engagements on entrepreneurship and supplier diversity globally. Her work has been featured on mainstream television and in national media. Reshma's dedication to supporting CEOs and business leaders, has helped numerous organisations achieve sustainable growth. Recognised as a top business leader, Reshma combines business acumen with a strong commitment to social responsibility.
