Back in June 2020, U.S. Bank announced its commitment to boost supplier diversity as part of several initiatives to address social and economic inequalities, which make up the vital 'S' pillar in ESG.
These actions came in response to the tragic and unjust death of George Floyd, and during the coronavirus pandemic, which research shows is disproportionately hurting Black and other minority small business owners in the US the hardest. Black-owned businesses have been almost twice as likely to shutter as firms overall during the pandemic, the New York Federal Reserve reported.
In response to this, U.S. Bank hosted its first ever Supplier Diversity Tradeshow last month, to build business relationships and potential partnerships with more Black-owned companies.
The bank hosted the event as part of its goal to double partnerships with Black-owned suppliers by June of 2021. It was an opportunity for suppliers to gain insight from each other, participate in workshops on a range of business topics and connect with U.S. Bank decision-makers. Nearly 400 people participated in the tradeshow. There were 119 companies from across 31 industries represented.
“2020 has presented a series of challenges that have shown the persistent inequities in our society,” said Andy Cecere, chairman, president and CEO of U.S. Bank. “If we're truly going to draw strength from diversity, we must do better. That’s why it's critical for us to support more Black and minority-owned suppliers that create jobs and help our customers and communities."
Targeting supplier diversity
The U.S. Bank supplier diversity programme has had a significant impact nationwide on small firms owned by women, minorities, veterans and LGBTQ owners. The bank requires a company to be at least 51% owned, controlled and managed by one or more minority group member, a woman, a veteran or LGBTQ person.
In addition to prioritising Black-led projects and partnerships, U.S. Bank says it continues to explore ways each of the company’s business lines lends, invests and influences capital to drive racial equity.
Awarding more contracts to diverse businesses has been a major focus of the U.S. Bank Supplier Diversity Task Force. The group is led by Tom Lutz, chief procurement officer; Greg Cunningham, chief diversity officer and a member of the bank’s managing committee; and Hector Martinez, head of the supplier diversity programme.
“We believe that by doing business with certified minority business enterprises we will improve the banking experience and drive bottom-line profitability for years to come,” said Lutz. “This event will help us build and deepen our relationships with more Black-owned firms, which are crucial to our business and communities.”
The amount that U.S. Bank spends with diverse suppliers is growing steadily each year and hit US$566m in 2019, up by 15% over the past two years. The growth is due to several factors: senior executives - not just supplier diversity staff - attending minority supplier meetings, managers actively championing vendors for additional contracts across the bank, and clear support from the bank’s senior leaders.
“To me, the impact that large corporations can have is to do meaningful business with these entrepreneurs and small businesses who have amazing ideas, products and services they can deliver,” Cunningham said. “Those of us who sit in decision-making positions in large organisations and can influence how resources get applied can start to invest back in these small businesses and communities - not just through philanthropy. Small businesses create jobs, which is the bedrock on a vibrant community, which is good for everyone.”
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