# What is supplier diversity?

> Supplier diversity means deliberately buying from businesses owned by under-represented groups. What counts, why companies do it and how to start a programme.

Source: https://www.procol.ai/answer/what-is-supplier-diversity/
Author: Shivangi Singh, Senior Content Writer (Procol)
Published: 2026-10-19

Supplier diversity is a procurement practice of deliberately including businesses owned by under-represented groups in your supply base, and measuring how much you spend with them. A diverse supplier is typically a business that is at least 51% owned, operated and controlled by people from such a group.

## Who counts as a diverse supplier

Definitions vary by country, but common categories are businesses owned by:

- Women
- Ethnic minorities
- Veterans
- People with disabilities
- LGBTQ+ people
- Small and micro enterprises, or businesses in economically disadvantaged regions

In India, procurement policy also recognises micro, small and medium enterprises (MSMEs) and businesses owned by scheduled castes and scheduled tribes, with public sector purchase targets attached.

## Why companies run supplier diversity programmes

- **Wider supply base.** More qualified suppliers means more competition and more resilience.
- **Innovation.** Smaller suppliers are often more flexible and quicker to adapt.
- **Customer and regulatory expectations.** Many large customers and public tenders ask for diversity spend data, and some mandate targets.
- **Community impact.** Spending reaches businesses and regions that large-company procurement usually bypasses.

## How to start a programme

1. **Define your categories** and the certification you will accept, such as third-party certification bodies or self-declaration with evidence.
2. **Baseline your current spend** by tagging existing suppliers.
3. **Set a target** and report on it alongside savings and other procurement KPIs.
4. **Make it easy to find and onboard diverse suppliers.** Include them in sourcing invitations by default and keep onboarding simple.
5. **Track and publish results.**

A supplier database with diversity flags, certifications and expiry dates makes the reporting automatic. Procol's [supplier management](/ai-supplier-management/) and free [Vendor Finder](/tool/find-suppliers/) help teams widen the supplier pool in the first place.

## Go deeper

- [What is Supplier Diversity and Why is It Important?](https://www.procol.ai/blog/supplier-diversity/)
- [What is Sustainable Procurement? A Complete Guide](https://www.procol.ai/blog/sustainable-procurement/)
- [Supplier Relationship Management Strategies: The Complete Guide](https://www.procol.ai/blog/supplier-relationship-management-strategies/)