Supplier diversity programs are shifting their focus toward small and local suppliers as companies look for more stability in a shaky economy.

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That’s one of the biggest takeaways from Supplier.io’s newly released 2025 State of Supplier Diversity Report, which shows that these programs are no longer being treated mainly as reputation builders. Instead, they are being tied more directly to sourcing strategy and supply chain resilience.

According to the report, 46% of organizations expect to increase small-supplier sourcing, while 38% plan to deepen their overall focus on small suppliers. At the same time, nearly half of companies said they have updated how they talk about supplier diversity, moving away from broad language and toward clearer definitions that now more often include small and veteran-owned businesses.

“Supplier diversity programs are directly tied to business performance and resilience,” said Neeraj Shah, CEO and Founder of Supplier.io. “As the cultural and political landscapes shift, it’s critical to redefine responsible sourcing strategies to prepare for tomorrow’s volatility.”

Despite economic pressure and political pushback in some areas, the report found that executive support remains strong, with 87% of organizations reporting steady or growing backing for supplier diversity efforts. Rather than pulling away, many companies are quietly reshaping their programs to better fit today’s sourcing challenges.

Small suppliers move from program goal to sourcing priority

One of the biggest shifts is how success is being measured. Teams are moving beyond basic spend tracking and placing more weight on business outcomes. Forty-six percent now track the impact of supplier diversity on winning RFPs, while 43% measure economic impact and 40% track cost savings. 

The report also points to major changes in how suppliers are being validated. There was a 74% increase in companies without membership in a certification agency council, signaling a move away from traditional certification models. At the same time, companies relying on manual onboarding and internal data reported 40% more data challenges, showing growing concerns about accuracy and verification.

With supplier diversity coming under greater public and political scrutiny, data quality is becoming a bigger priority. About 33% of organizations reported a renewed focus on data integrity, while 28.7% are increasing investment in technology to support their programs. Looking ahead to 2026, teams expect a 30% increase in internal tracking, a 34% increase in economic impact reporting, and 56% plan to report publicly.

Political and cultural pressure now tops the list of risks facing supplier diversity programs, cited by 39.6% of respondents. Economic concerns followed at 20.7%, with potential budget cuts close behind at 18.9%. Those risks are driving many organizations to rethink how publicly they position their programs and how tightly they link them to business performance.