How Supplier Diversity Could Be Impacted By the Supreme Court’s Affirmative Action Ruling & 5 Ways Your Organization Can Respond

The recent Supreme Court decision ending affirmative action calls for introspection and informed decision-making on the part of corporate leaders and supplier diversity professionals. We must adapt to this shifting landscape, facing an uncertain future with an unyielding commitment to inclusive procurement practices—and Diversity, Equity, and Inclusion (DEI) more broadly. In this article, Hire Ground explains what the concern is all about and what steps you and your organization can take to stay ahead of the curve.

About the Ruling

If you’re not familiar with the ruling, it requires the nation’s educational institutions to cease considering race in admissions. The landmark 6 to 3 decision, penned by Chief Justice John G. Roberts Jr., struck down race-conscious admissions policies at Harvard and the University of North Carolina. The majority opinion suggested that these programs violated the equal protection clause of the Constitution’s 14th Amendment, as they provided an advantage to Black and Latino applicants over white and Asian applicants.

However, this interpretation was not unanimous. In a dissenting opinion, Justice Sonia Sotomayor expressed that the Supreme Court had regressed from its long-standing jurisprudence promoting more inclusive and equal schools: “Today, this Court stands in the way and rolls back decades of precedent and momentous progress. It holds that race can no longer be used in a limited way in college admissions to achieve such critical benefits. In so holding, the Court cements a superficial rule of colorblindness as a constitutional principle in an endemically segregated society where race has always mattered and continues to matter.”

Implications for Supplier Diversity

As Justice Sonia Sotomayor makes clear, the ruling on affirmative action sets a precedent that will likely affect more than the realm of education in future cases and rulings. Ying McGuire, President and CEO of the National Minority Supplier Development Council (NMSDC), brought this point home in a statement released immediately following the ruling: “The Supreme Court’s recent decision could potentially jeopardize supplier diversity programs that corporations use to diversify their supply chains. It can also hurt minority-owned businesses, limit their growth, and hinder economic recovery in our communities.”

Though no changes to current supplier diversity practices are required by the new ruling, we believe organizations should adopt a proactive approach to safeguarding their supplier diversity efforts in light of the court’s disapproval of race as a determining factor in admissions. To be clear, Hire Ground sees race-conscious initiatives as integral to creating inclusive procurement practices, fostering diverse and resilient supply chains, and promoting economic development. However, we also believe that the recent ruling compels corporate leaders to critically review supplier diversity strategies and consider the possibility of future challenges to practices that overtly favor one racial group over another. Such practices might include organizational targets to increase spend with specific racial or ethnic groups. This would require a monumental shift in the prevailing approach organizations have taken to supplier diversity, but such a shift may be required to circumnavigate potential legal pitfalls and ensure that supplier diversity efforts remain effective and impactful.

All of that said, there are aspects of supplier diversity that are less likely to encounter legal challenges and can continue to be effective tools in our diversity arsenal without any reconsideration. These include efforts that work towards eliminating barriers and creating an equal playing field for all suppliers. Outreach initiatives, capacity-building among diverse suppliers, unbiased supplier evaluation and selection, and widespread information dissemination about contracting opportunities are all components of a supplier diversity program that are unlikely to be challenged based on the precedent set by the affirmative action ruling.

Lastly, advocating for the inherent value of diversity and inclusion within supply chains — a strategy promoting resilience, better market understanding, and meaningful economic impact — is not just legally sound but also an absolute imperative.

5 Things Your Organization Can Do Next

We offer these steps to navigate and fortify supplier diversity amidst a shifting legal climate:

1. Engage Your Legal Team & Stay Abreast of Changes: Regularly monitor legal developments related to supplier diversity, adapting your strategies and policies to ensure ongoing compliance and effectiveness.
2. Reaffirm Commitment: Redouble your dedication to supplier diversity through visible and decisive actions. Review and adjust your procurement policies to align with current legal standards while continuing to prioritize diversity.
3. Equip Your Team: Invest in training programs focused on supplier diversity to dispel misconceptions, foster understanding, and inform stakeholders of the legal context and its implications on procurement.
4. Prioritize Data: Harness the power of data to highlight the empirical benefits of supplier diversity to all stakeholders. Comprehensive data collection and analysis can illuminate the tangible economic and innovative value that diverse suppliers bring to your organization. Utilize these insights to drive informed dialogue, advocate for supplier diversity, and ensure your procurement practices continue to foster inclusion within the bounds of the law.
5. Advocate Publicly for Supplier Diversity: Use your corporate influence to actively promote supplier diversity within and beyond your organization. Your voice in this arena is powerful and necessary.

In Conclusion

The road ahead may be challenging and though your organization’s commitments to supplier diversity—and DEI—may need to shift strategically, they do not need to waiver. We can persist in promoting supplier diversity and fueling economic inclusion while ensuring legal compliance. Let’s continue our journey toward a diverse, inclusive, and equitable business world, not deterred, but galvanized by the challenges we face. Together, we march on.

Key Takeaways

1. The recent Supreme Court decision ending affirmative action in educational institutions sets a precedent that could potentially impact supplier diversity initiatives.
2. While no immediate changes are required in current supplier diversity practices, corporations are encouraged to adopt a proactive approach to safeguarding their supplier diversity efforts.
3. Supplier diversity strategies that overtly favor one racial group over another, such as targets to increase spend with specific racial or ethnic groups, may come under legal scrutiny in the future.
4. Despite the ruling, there are aspects of supplier diversity that are less likely to encounter legal challenges. These include eliminating barriers, unbiased supplier evaluation and selection, and advocating for the inherent value of diversity and inclusion within supply chains.
5. Actions organizations can take include engaging legal teams to monitor developments, reaffirming commitment to supplier diversity, investing in supplier diversity training, prioritizing data to highlight the benefits of supplier diversity, and using corporate influence to advocate for supplier diversity.
6. Despite potential challenges, the commitment to supplier diversity and DEI doesn’t need to waver. It is possible to promote economic inclusion while ensuring legal compliance.