From intent to impact: embedding supplier diversity in procurement
Following RPS’ National Reconciliation Week presentation with Supply Nation, Toby Dawson, Director – Social Advisory, reflects on how organisations can move from awareness to action by making more conscious procurement decisions that support Aboriginal and Torres Strait Islander businesses.
Reconciliation is shaped by more than words, plans or symbolic moments. These are important, but lasting change also depends on the practical choices organisations make every day. One of the most powerful choices is where money is spent.
For businesses involved in infrastructure, development, energy, property, government services and major projects, procurement is more than a commercial function. It can influence who participates in economic opportunity, who builds capability, and where value flows through communities. This is where supplier diversity becomes a practical pathway for reconciliation.
Toby Dawson
Supplier diversity is practical economic participation
Supply Nation defines supplier diversity as a global movement that benefits businesses, minority groups and their communities. Its purpose is to redirect procurement spend to traditionally under-represented businesses, where it can create greater social good and give businesses a stronger competitive advantage.
In the Australian context, this means creating fairer opportunities for Aboriginal and Torres Strait Islander businesses to compete for work.
This is not necessarily about finding new money. It is about looking at existing procurement spend and asking whether it can be directed more intentionally. It could be a project supplier, a consultant, an event provider, a training partner, a facilities contractor, a design agency, a caterer, or a professional services provider.
The key shift is moving from passive support to deliberate participation. Too often, procurement defaults to known suppliers, existing networks and established pathways. That can make the process feel efficient, but it can also reinforce structural barriers for businesses that have historically been excluded from those networks.
Supplier diversity asks organisations to make those pathways more visible, more accessible and more equitable.
Indigenous business growth is creating measurable value
Supply Nation member spend with Indigenous businesses has grown from $1.6 billion in FY20 to $5.83 billion in FY25. Indigenous Business Direct also now includes more than 6,300 verified Indigenous suppliers across Australia, spanning categories including construction, facilities management, education and training, information technology, marketing, recruitment, professional services, environmental and land management, transport, waste, water supply and more.
Supply Nation’s The Sleeping Giant Rises report found that Indigenous businesses create $42.6 billion of social value each year for Indigenous business owners, employees, households and communities. For every dollar of revenue, Indigenous businesses create $3.66 of social and economic value for Indigenous communities.
That value can be experienced through employment, financial security, pride, stronger family relationships, improved wellbeing, expanded aspirations, and stronger connections to Culture and Country.
For organisations, this reframes procurement. A buying decision can still be commercial, compliant and value for money. But it can also be a decision that supports economic empowerment, self-determination and long-term community strength.
Why targeted opportunities matter
Targeted procurement is sometimes misunderstood as preferential treatment. In practice, it is a way of addressing barriers that have prevented fair participation.
Exclusion is not always obvious. It can sit inside systems and processes that appear neutral, such as short tender timeframes, insurance thresholds, credit history requirements, complex onboarding, long payment cycles or procurement models that bundle large scopes into packages smaller businesses cannot realistically access.
These barriers can affect many small businesses, but they can have a particular impact on Aboriginal and Torres Strait Islander businesses that have been excluded from economic participation over generations.
This is why intent matters. Without deliberate action, procurement often continues to favour the businesses and networks already in the system. With deliberate action, organisations can identify where Indigenous businesses can realistically participate, create better pathways to engage, and build relationships that support capability over time.
Verification protects trust and integrity
Recognised verification processes help organisations make confident decisions and ensure economic benefits flow to Aboriginal and Torres Strait Islander people and communities.
As supplier diversity becomes more embedded in procurement, these safeguards become increasingly important because they help reduce the risk of black cladding.
Supply Nation defines black cladding as the practice of a non-Indigenous business entity or individual taking unfair advantage of an Indigenous business entity or individual to gain access to Indigenous procurement policies or contracts.
The impact is not administrative. It can divert opportunity away from the people and communities supplier diversity is intended to support.
Using verified databases, asking the right questions and taking time to understand business ownership and control are practical ways organisations can protect trust while continuing to expand their supplier diversity efforts.
Meaningful engagement is relational, not transactional
Supplier diversity is not only about finding a business, issuing a purchase order and counting the spend. Meaningful engagement takes time, and it depends on organisations being willing to listen, build trust and understand what Aboriginal and Torres Strait Islander businesses need.
For some organisations, that may require a shift in pace. Procurement teams are often under pressure to move quickly, use familiar suppliers and reduce perceived risk. But relationship-based engagement can create better outcomes over time.
It helps organisations understand the market. It gives suppliers clearer visibility of future opportunities. It also creates space to identify where a business may be ready now, where it could grow into future work, or where a larger contract could be broken into smaller packages that support participation without compromising delivery.
This is where supplier diversity becomes more than a procurement target. It becomes a long-term partnership approach.
Moving from commitment to everyday action
The most useful step is often the simplest one: start. Organisations do not need to wait for a perfect opportunity. Supplier diversity can begin with everyday procurement decisions across projects, offices and business functions.
Practical actions include mapping current spend categories, identifying where Indigenous businesses could participate, using Indigenous Business Direct early in procurement planning, and building preferred supplier lists that teams can access easily.
For larger contracts, organisations can consider whether scopes can be broken down, whether onboarding requirements are proportionate, whether payment terms create unnecessary pressure, and whether smaller suppliers can be supported to build capability for future work.
Teams can also share wins. Promoting Aboriginal and Torres Strait Islander suppliers, recognising good work and encouraging others to use verified businesses helps normalise supplier diversity across an organisation.
The point is not to make supplier diversity the responsibility of one team or one annual campaign. It is to embed it into everyday decisions.
Reconciliation is built through practical choices
Supplier diversity gives organisations a practical way to connect reconciliation commitments with commercial decisions.
For RPS, the message is clear. Economic empowerment is not abstract. It is created through jobs, business growth, capability, confidence, relationships and opportunity.
Every procurement decision is a chance to ask a better question: could this opportunity support an Aboriginal or Torres Strait Islander business?
When organisations take the time to ask that question, use verified pathways, build genuine relationships and track the value created, supplier diversity becomes more than good intent. It becomes a practical contribution to long-term social value.
To learn more about embedding supplier diversity, social value and practical economic participation into your organisation, connect with Toby Dawson, Director – Social Advisory at RPS.
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