There are a lot of supplier diversity certifications your business can apply for, but which ones are the best certifications for your business? In this article, we’ll break down supplier diversity certifications, including the application process, what documents you’ll need, turnaround time to receive your certification, and how often you’ll need to renew your certification.
So, What Is a Diverse Supplier, Anyway?
In brief, a diverse supplier is a business of any size that is owned and operated by an individual or group of people that is part of a traditionally underrepresented or underserved group. In the US, there are seventeen categories used to identify diverse businesses. Note that ownership is specific to the legal ownership of the organization, while operations relates to the day to day running of the organization. Internationally, there are five classifications, but there may be more depending on the country in question.
Could My Business Be Classified as a Diverse Supplier?
If you meet the criteria for any of the classifications listed below, chances are your business could be classified as a diverse supplier:
U.S. Classifications:
Disabled Owned – A business that is a least 51% owned by one or more disabled persons who control and operate the business. Control in this context means exercising the power to make policy decisions and operate means being actively involved in the day-to-day management of the business.
Disabled Veteran Business Enterprise (DVBE) – This term is used by the State of California, public utilities, and many private corporations to designate a company that is owned (at least 51%) and controlled by a Veteran with a Service-Connected Disability rating of at least 10% from the Department of Veterans Affairs. Additionally, the Veteran must reside in the state of California.
Disadvantaged Business Enterprise (DBE) – A business that is usually certified by a federal, state or local government agency as having met all of the government standards that award eligibility, but may include women, minority, disabled and other disadvantaged as a result of economic disadvantages with respect to education, employment, residence or business location or social disadvantage and lack of business training.
Disadvantaged Veteran Enterprise (DVE) – A business that is a small business concern owned and controlled by veterans, where not less than 51% is owned, controlled, and managed by veterans.
Historically Black Colleges / Universities & Minority Institutions (HBCU/MI) – Historically Black and minority colleges and universities that are recognized by the government as legitimate set-aside business opportunities.
HUBZone Certified – A business that is operating in a certified historically underutilized business zone. There are 7,000 qualified census tracts (HUD) and 900 qualified non-metropolitan counties.
LGTB Owned (LGBT) – A business that is at least 51% owned and operated by an LGTB person(s).
Minority-Owned – A business that is at least 51% owned by, and whose management and daily business operations are controlled by, one or more members of a socially and economically disadvantaged minority group, namely U.S. citizens who are African Americans (Black), Hispanic Americans, Native Americans, Asian-Pacific Americans, Alaskan Native Americans and Indian Sub-Continent Americans.
Minority Business Enterprise (MBE) – A Minority Business Enterprise usually certified by a federal, state or local governmental agency as having met all of the government standards that award eligibility.
Service-Disabled Veteran (SDV) – A business that is owned by one or more veterans with a disability that is service-connected. The term “service connected” means, with respect to disability, that such disability was incurred or aggravated, in the line of duty in the active military, naval or air service. (38 U.S.C. ‘101(16).
Small Business – A business considered eligible for assistance from SBA as a small business is one that is organized for profit, with a place of business located in the United States. It must operate primarily within the United States or make a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor. Together with its affiliates, it must meet the numerical size standards as defined in the Small Business Size Regulations, 13 CFR 121
Small Disadvantaged Business (SDB) – Small Disadvantaged Business: New certification eligibility criteria established by the SBA effective 7/1/99. All firms must be certified by one of the SDB Certification Agencies designated by the SBA. To qualify must be a small business, not exceed standards for Primary SIC, meet Contracting Officers’ assigned SIC code, be a U.S. Citizen and be 51% owned and controlled by one or more Socially & Economically Disadvantaged Individuals. The SBA classification is based on a Preponderance of the Evidence Clause” this SDB Certification is good for 3 years.
Veteran Business Enterprise (VBE) – Under SBA Guidelines Small Business Act (PL 85-536) as amended states: Small Business Concerns owned and controlled by veterans not less than 51% owned by one or more veterans and in the case of a publicly owned business not less than 51% of the stock is owned by one or more veterans.
Veteran Owned – A business that is a least 51% owned by one or more veterans, who control and operate the business. Control in this context means exercising the power to make policy decisions and operate means to be actively involved in the day-to-day management of the business. The term “veteran” (38 U.S.C.’101(2)) means a person who served in the active military, naval, or air service, and who was discharged or released there from under conditions other than dishonorable.
Vietnam Veteran – A business that is a least 51% owned by one or more Vietnam Veterans who served between 1/1/59 and 5/7/75 and have control and operate the business. Control in this context means exercising the power to make policy decisions and operate means to be actively involved in the day-to-day management of the business.
Women-Owned – A business that is at least 51% owned by, and whose management and daily business operations are controlled by one or more women who are U.S. citizens.
Woman Business Enterprise (WBE) – A Women Business Enterprise usually certified by a federal, state or local Government agency as having met all of the government standards that award eligibility.
8(A) Designation – The 8A designation is given to small companies owned by socially and economically disadvantaged persons, so that they may bid and obtain federal government contracts and other assistance to develop their business. The business owner must be eligible under the same rules and guidelines set down by the federal government.
International Classifications:
Disabled Owned – A business that is a least 51% owned by one or more disabled persons who control and operate the business. Control in this context means exercising the power to make policy decisions and operate means to be actively involved in the day-to-day management of the business.
LGTB-Owned – A business that is at least 51% owned and operated by one or more LGTB person(s)
Minority-Owned – A business that is at least 51% owned by, and whose management and daily business operations are controlled by, one or more members of a socially and economically disadvantaged minority group. Minority (ethnicity) is defined by country as the socio-economic under-represented. Intel does not require disclosure of ethnicity per privacy policy. Disclosure of ethnicity is voluntary, not a requirement.
Veteran Owned – A business that is a least 51% owned by one or more veterans, who control and operate the business. Country exceptions: Israel, Taiwan
Women-Owned – A business that is at least 51% owned and operated by one or more women.
Which Supplier Diversity Certification is Right for My Business?
Now that you’ve figured out what classification your business falls into, it’s time to think about getting certified for those classifications. Keep in mind that just because you think your business qualifies as diverse doesn’t mean that your business actually qualifies asdiverse. Most organizations with supplier diversity programs and initiatives won’t enter into a contract with a diverse business unless that business has a third-party certification to prove diversity status.
There are several types of supplier diversity certifications you can obtain for your business. You can self-certify, but most businesses require a third-party certification in order to enter into a contract with your diverse business. Federal certifications, state-level certifications, local certifications and certifications issued by non-governmental organizations (NGO) are all considered third-party certifications, and those are the certifications we’ll be going over.
Below is a list of currently available non-governmental third-party supplier diversity certifications, and who these certifications apply to:
It’s important to note that a single business can hold multiple certifications. Say, if you’re a lesbian Native American woman who owns a business, you’d be eligible for four separate certifications—one from National Minority Supplier Development Council (NMSDC), one from Women’s Business Enterprise National Council (WBENC), one from Native American Chamber of Commerce (NACC), and one from SupplierGATEWAY.
The Supplier Diversity Certification Process
Most diversely-owned businesses obtain their certifications via a third-party certification agency. This is an organization that promotes the business development of a particular group of minority and/or underrepresented people. The process or getting certified varies based on organization, but most require the following in order to certify your business:
Documentation. All of the certifying organizations listed above require documentations to attest to the truth of your diversity statements.
Screenings and interviews. You, your staff, and other members of your organization may be interviewed and screened.
On-site visit. Some organizations require site visits to visually and physically confirm the diversity of your business.
Waiting. Most applications take several weeks to be approved.
SupplierGATEWAY’s Enhanced Digital Certification® does not require a site visit and is done entirely online via supported documentation and identity verification. The approval process is also expedited—applications are generally approved within 3-5 days, if not sooner. The Enhanced Digital Certification® is also all-in-one and certifies many different classifications with one certificate.
Why is Supplier Diversity Certification Important?
Supplier diversity certification is important for several different reasons. Firstly, most buyers with supplier diversity programs won’t do business with your diverse business unless you have third-party certification to back up your diversity claims. Businesses with supplier diversity programs oftentimes struggle to find diverse suppliers to give contracts to. Being certified means that your business can be identified as diverse, which will help you gain contracts from those companies looking for diverse suppliers. Certification also opens the door for government contracts as well. In the US, the federal government requires that federal projects use a certain percentage of diverse suppliers.
Certification also opens the door to the networks associated with your certifications. For example, once your business is certified, your business will be entered into a database full of other diverse suppliers. Large corporations and other organizations with supplier diversity initiatives rely on these databases to find diverse suppliers to do business with. Aside from exposure to buyers looking for diverse suppliers, your certifications often come with access to specific events, educational opportunities, and business development tools that your business wouldn’t have access to otherwise.
Outside of financial benefit to your business, certification also offers social benefits for supply chain management and corporate responsibility initiatives. Through certification, diverse businesses can work together to advocate for diversity and effect change within current supply chain management culture. The more businesses that become diversity certified, the more robust corporate supply chain diversity programs can become, causing a positive feedback loop for ever-increasing supply chain diversity.
Sustainability Certifications 101 – Definition, Benefits and How To Obtain One
You’re no longer surprised to hear “sustainability” everywhere you go.
As more consumers become conscious of the brands they buy and decide based on the brand’s values, including environmental and social issues, the business practice of sustainability has become a necessity and more than just the “right thing” to do. According to the Pew Research Center report in 2021, 71% of Millennials and 67% of Gen Z said climate should be a top priority to ensure a sustainable planet for future generations.
Due to the change of consumer perspective, many organizations have added sustainability as part of their branding strategies and taken this criterion seriously into their procurement decisions. Hence, it’s critical for suppliers to incorporate that practice into a business.
But how do prospective clients know if your company, product or service is operating sustainably? How do they ensure you meet the sustainability standard? This is where sustainability certification comes in to make it easier for your clients.
What Are Sustainability Certifications?
Sustainability certifications are issued by an independent or third-party organization to a company, product or service. To obtain a certificate, a company must meet specific standards and criteria to demonstrate a strong commitment to good economic, environmental and social business practice.
Though these certifications are not mandated, obtaining one indicates your business practice is socially responsible and is a point of differentiation.
Sustainable Procurement Is Fundamental of Building Resilience In Supply Chain
The Sustainable Procurement Barometer 2021 report shows valuable insights into growing the recognition and awareness of sustainability in procurement with these key findings:
Labor and human rights issues shape procurement strategy.
Procurement is now paying attention to diversity, racism, nondiscrimination and equity.
Sustainable procurement proves key to supply chain resilience.
Sustainability performance is critical for revenue and growth.
Mid-sized companies (from $100M to $1Bn in revenue) are embracing sustainability.
Sustainable procurement practices have been adopted and implemented at scale by many businesses of all sizes. Evaluation of sustainability criteria is becoming a new norm and is predicted to become a mandatory requirement in the future.
Where To Obtain Sustainability Certifications
Depending on the business and product type, a single entity can hold numerous certifications that target different aspects of its business. We have listed below some of the most popular and reputable third-party certifications you can consider.
Business Sustainability Certifications
B Corporation is the only certification that measures a company’s entire social and environmental performance. The B Impact Assessment evaluates how your company’s operations and business model impact your workers, community, environment, and customers.
CarbonFree Certified determines the carbon footprint of the product and associated carbon emissions are offset with reduction projects.
Green Seal-certified products have reduced climate and environmental impacts at one or more stages of their lifecycle.
ENERGY STAR Most Efficient recognizes the best of ENERGY STAR certified products with the highest efficiency and maximum carbon reductions.
Rainforest Alliance’s seal stands for more sustainable farming methods that help improve farmer livelihoods & mitigate climate change.
SMaRT Consensus Sustainable Product Standards is the consensus sustainable products standard and label for building products, fabric, apparel, textile & flooring, covering over 80% of the world’s products with environmental, social, & economic criteria.
Sustainable Forestry Initiative (SFI) has a robust set of forest certification standards that enable forest managers in the United States and Canada. It demonstrates sustainability while measuring quality, biodiversity, wildlife habitat, species at risk, forest conservation value, forest fiber content, and forest product traceability.
EcoVadis provides holistic sustainability rating services of companies, delivered via a global cloud-based SaaS platform. The EcoVadis Rating covers a broad range of non-financial management systems, including Environmental, Labor & Human Rights, Ethics and Sustainable Procurement impacts.
ISO 26000:2010 provides guidance rather than requirements, so it cannot be certified, unlike some other well-known ISO standards. Instead, it helps clarify what social responsibility is, allows businesses and organizations to translate principles into practical actions, and shares best practices relating to social responsibility globally.
ISO 14000 Family sets out the criteria for an environmental management system and can be certified. It maps out a framework that a company or organization can follow to set up an effective environmental management system.
Consumer Goods Green Business Certifications
Leaping Bunny Certified Cruelty-Free is a certification for cruelty-free products by the Coalition for Consumer Information on Cosmetics (CCIC). The CCIC comprises eight animal protection groups to develop and promote the use of a single, comprehensive standard for cruelty-free and animal-friendly products.
NPA Standard and Certification dictate whether a product can be deemed truly “natural.” It encompasses all cosmetic personal care products regulated and defined by the FDA.
Fairtrade International certification is awarded to producers, farmers, traders, and importers/exporters. The certification process is undertaken by FLOCERT, an independent body originally formed by Fairtrade International but became independent in 2008.
SIP Certified sustainable is a program providing third-party verification that a wine, winery, or vineyard has adopted and implemented stringent sustainable winemaking and wine growing standards. The sustainable certification is based on best practices and is committed to continuous improvement in those areas.
Non-GMO means a product was produced without genetic engineering, and its ingredients are not derived from GMOs.
Demeter’s “biodynamic” certification assures consumers that the product has been certified to a uniform standard. Therefore, Demeter holds these marks and is solely responsible for ensuring their adherence to protecting the integrity of Biodynamic agriculture and the products that result, both for consumers and farmers.
USDA-certified organic foods are grown and processed according to federal guidelines addressing, among many factors, soil quality, animal raising practices, pest and weed control, and use of additives. Organic producers rely on natural substances and physical, mechanical, or biologically based farming methods to the fullest extent possible.
Introduction to Supplier Diversity Certifications
Updated 2/28/2022
The initial goal of Supplier Diversity programs was to combat social injustices in the United States by supporting growth and jobs at underrepresented small businesses. Over the last few years, buyers have also realized that effective inclusive procurement also delivers significant benefits to the bottom line and can drive innovation.
Following the old axiom “What gets measured gets done,” many corporations with Corporate Social Responsibility (CSR) programs measure the effectiveness of their supplier diversity efforts by “counting” every dollar spent with diverse suppliers in all categories. To be sure they are measuring correctly, most companies tend to utilize third-party processes to validate the diversity data.
Diversity Certification for Suppliers is Important
All of these are important to you as a supplier. Why? A “certified” version of you is more attractive to a corporate buyer with a CSR program than a “not certified” version of you (all other things being equal – quality, performance, customer service and price are all still very important.)
Hence, if spending with certified suppliers is deemed more reliable and thus better to count, the smart move is to become certified and make it easier for your prospective customer to pick you.
Now that we know how important inclusion is to your customers, it’s time to do all you can to leverage your position as a diverse-owned business. If you’re curious about how to identify if you’re a diverse-owned business specifically, check out this article for a more in-depth breakdown of different classifications.
Traditional Supplier Diversity Certifications
Below is a list of traditional supplier diversity certification entities. This list is not exhaustive, and there are many more certifying bodies both at the local and state levels depending on where your business is headquartered.
Supplier Diversity Certification in the Digital Age
SupplierGATEWAY uses advanced technology to enable sole proprietorships and small businesses who have limited resources (time and budget) to become certified and ultimately expand the opportunity to do business with major companies.
The Enhanced Digital Certification™ (EDC) is a fast and inexpensive way for a small business to get certified as a diverse-owned organization while at the same time exposing to new opportunities afforded by being in the SupplierGATEWAY network. EDC certifies all of the following categories and you can have more than one diversity category in your certification:
Globalization has brought not only significant benefits to the business but also difficulties in sharpening its competitive advantages. Across all industries, many organizations have been embracing a strategic supplier diversity program to set themselves apart from the competition.
However, to certify or not certify – that’s still a question most suppliers face at some point in the journey of positioning their brand. Is a supplier diversity certification worth it? Why does it matter? Do I have to certify my business? This article will give you answers to these questions.
Diversity Certification for Suppliers, Explained.
A supplier diversity certification is issued when a third-party certification agency verifies, screens and validates that your business is diverse. This certification serves as proof to buyers that your business meets the inclusion program requirements, therefore increasing opportunities to get into the door that may not be available to the non-certified suppliers.
These certifications are vital when you’re trying to partner with government agencies, some of which are mandated by law to source a certain percentage of the supply needs from certified small or diverse-owned businesses.
Type of Diversity Certification for Suppliers
As per definition, a diverse supplier is a business that is at least 51% owned and operated by an individual or group that is part of a traditionally underrepresented or under-served group. Some common classifications include:
Small Business
Minority-Owned Business
Woman-Owned Business
Veteran-Owned Business
Disability-Owned Business
LGBTQ-Owned Business
Does It Really Matter to Buyers?
Today consumers are getting smarter in knowing what brand aligns with their values, whether it’s supporting small or minority-owned businesses. Hence, supplier diversity matters to buyers. It is a key part of a company’s efforts to keep promises in maintaining high ethical and moral standards.
For example, Coca-Cola is spending over $800 million annually on diverse suppliers and has a goal of increasing that to more than $1 billion by the end of 2020. As of 2019, the retailer Target, one of our SupplierGATEWAY platform users, increased diverse supplier spend by over 35% (compared with 2017) and spent $1.4 billion on goods and services provided by first-tier diverse suppliers.
Certifications Are Your Marketing Tool, Not Everything You Have
It’s great for your business to have a certification. Yet, it’s not the only thing you should rely upon, especially when you’re pitching to buyers. Certifications don’t guarantee winning new business. Instead, certification should be a marketing tool to facilitate your business being noticed and make the right sales pitch. Leveraging it as a value of trust shows your brand’s promise and what you stand for.
Introducing Enhanced Digital Certification – A New Digital Diversity Certification for Suppliers
Enhanced Digital Certification™ (EDC) is a fast and inexpensive way for small businesses to get certified as a diverse-owned organization while at the same time exposing them to new opportunities afforded by being in the SupplierGATEWAY network.
EDC is gaining widespread acceptance by some of the most prominent advocates of inclusive purchasing – all of whom also seek to create new economic impact at scale. By digitizing and streamlining the diversity certification process, we have made it easier, faster and much less costly to achieve your diversity certification.
If your business belongs to a small and minority-owned category, EDC is a go-to program for becoming certified as a diverse-owned business.
Promote Your Business With Certifications
Certifications increase the opportunities for your business to be found and get noticed by buyers. For those looking to expand your market presence with prospects, registering a free account with SupplierGATEWAY gives you access to new business opportunities. Our platform connects you with customers of all sizes – from Fortune 500 companies and globally recognized companies to your local health system, manufacturer or business. Our easy-to-use app will help you stay connected to the opportunities that could make all the difference to your bottom line.