Over the past few years, we have seen a major shift in how Diversity, Equity, and Inclusion (DEI) efforts are being viewed; not just inside companies, but across entire industries. New legislation across several states is now putting limits on how companies can use race, gender, and other identities in business programs. And for suppliers, especially small, minority-, woman-owned, and veteran- owned businesses, this changing landscape brings both challenges and opportunities.
Impact on Diverse Suppliers
At its core, DEI efforts have opened doors. Supplier diversity programs helped level the playing field by ensuring that businesses from historically marginalized communities had a fair shot at contracts that could grow their companies and fuel local economies.
Today, the reality is shifting. Some states, like South Carolina, are passing laws that make it harder to prioritize diversity in public and private procurement. Companies are feeling the pressure, and so are suppliers. Without intentional DEI programs, many small businesses risk losing the visibility and opportunities they have fought hard to earn.
In a nutshell: fewer DEI-focused programs could mean fewer contracts, slower business growth, and a wider wealth gap over time. It’s not just a political issue — it’s an economic one. Based on the CVMSDC economic impact report, for every $1 that a buyer spends with a diverse supplier, there is a $1.72 impact back into the local economy. The cascading economic impact of that $1.72 equates to $401 billion within our network. When we can help businesses thrive, we strengthen the economy. Business owners buy products, pay taxes, and hire people. As a result, small businesses pour into the economy instead of being a drain on the economy.
How Companies Are Reacting
Corporate America is at a crossroads. Some companies are doubling down on supplier diversity, using language that focuses more on “economic inclusion” or “business equity” to stay compliant with new laws while still moving the mission forward. Others are quietly scaling back, afraid of lawsuits or negative media coverage.
Here are some key trends we’re seeing:
- Reframing language: Companies are still committed but are being cautious with words like “diversity” and “equity.” You’ll hear more about “inclusion,” “market access,” and “business opportunity.”
- Shifting strategies: Instead of public pledges, some companies are embedding supplier diversity deeper into their operations, making it a standard part of doing business rather than a separate program.
- Regional approaches: Companies with a national footprint are tailoring their DEI efforts based on the laws in each state. What is promoted in California may look very different than what happens in Florida or South Carolina.
While it feels like the environment is getting tougher, it’s also sparking innovation. Forward-looking companies are finding creative, legally sound ways to continue supporting diverse suppliers, because they know it’s smart business.
The Future of Our Work
The future of supplier diversity and DEI work is going to require a more strategic, agile approach. We can’t rely on old models. Advocacy, innovation, and collaboration are going to be key.
- Suppliers must be ready. It has never been enough to just have a certification; businesses must be competitive, scalable, and able to clearly articulate their value beyond being a diverse supplier.
- Partnerships will matter more. Organizations like CVMSDC, and others that advocate for diverse businesses, will play a critical role in helping companies and suppliers navigate this new reality.
- Storytelling will be essential. We must continue to show the real-world impact that diverse suppliers have on communities, jobs, and innovation — shifting the narrative from perceived goodwill to economic imperative.
In Summary
Yes, the road ahead may feel uncertain. But history has shown us that progress rarely moves in a straight line. Supplier diversity was built on resilience, creativity, and relationships — and those strengths will carry us through this moment, too. Eventually, the pendulum will swing back to the middle.
Every connection you make, every contract you secure, and every business you grow makes a statement: DEI isn’t just good social policy. It’s good business that strengthens our economy.
Be intentional and courageous. DJSM
