Our commitment to diversity, equity, and inclusion is a top priority at HP and applies equally to our workforce and to our relationships with suppliers. Through purchasing decisions and business relationships, we foster greater opportunity, equality and representation. Building a more diverse supply chain reflects our values while driving greater innovation, fortifying our business, and strengthening local economies.
HP’s commitment to fostering opportunity and equality for our people extends to our relationships with our business partners and suppliers. As part of this commitment, we work to improve the representation of women and minorities within our supply chain through our purchasing decisions. As do our own employees, diverse suppliers offer perspectives and experiences that drive innovation, fortify our business, and strengthen local communities and economies.
We encourage small businesses and diverse companies—that is those owned by women, minorities, veterans, service-disabled veterans, LGBTQ+ individuals, and aboriginal or indigenous individuals—to compete for our business. In 2021 in the United States, we spent US$276 million with small businesses, US$79 million with minority owned businesses, and US$91 million with women-owned businesses1 . During the year, our supplier diversity program in the United States had an overall economic impact of more than US$650 million.
In 2020, we continued to develop our supplier diversity program in the United States. To accelerate our efforts, we work with the National Minority Supplier Development Council (NMSDC), Georgia Minority Supplier Development Council, Women’s Business Enterprise National Council, and industry groups such as tech:SCALE.
In September 2020, we took the NMSDC “In This Together” pledge and sponsored programs to invest in minority businesses struggling to recover from COVID-19 as well as coalitions to help eradicate racial wealth gaps and access to start-up capital. We also participated in the U.S. House of Representatives Small Business Committee Supplier Diversity Roundtable to discuss ways to develop and engage minority suppliers. Our work supporting U.S. veteran-owned businesses earned us recognition on the Military Friendly® 2020 Supplier Diversity list.
We launched the HP Racial Equality and Social Justice Task Force in June 2020 and have pledged to drive economic empowerment for Black/African American-owned U.S. businesses by increasing our spending with them. Through policies, programs, and executive sponsorships, we will help these suppliers develop relationships with HP that can help strengthen their businesses and build economic power. Our goal is for 10% of HP supplier diversity spend in the United States to be with Black/African American suppliers by 2022, up ten-fold from 2020. We achieved 4.5% in 2021.
To advance progress deeper in our supply chain, we have added a clause in new and renewed contracts for suppliers that provide services to HP in the United States, setting the expectation that they should spend a minimum of 10% of any work subcontracted and/or purchased on behalf of HP with diverse businesses. To strengthen the program’s racial equality focus, top suppliers subcontracting work in the United States must spend at least 5% with certified Black/African American businesses. In 2021, our allocatable indirect spend2 with diverse suppliers through this program was more than $350 million.
In 2021, HP issued its inaugural Sustainability Bond by partnering with Black/African American-, Latino-, women-, veteran-, and disabled veteran owned banks, which have received approximately 5% of total underwriting fees. We engaged a Black/African American- and women-owned firm to execute the more than 10% of share repurchases carried out during 2021, and have continued working with a minority-owned firm as one of a small group of commercial paper (short-term borrowing) dealers.
Raising standards and practices across the marketing industry
We encourage our suppliers and partners to prioritize diversity and inclusion within their own operations. In 2016, we challenged our top five U.S.-based marketing agencies to significantly increase the number of women and U.S. minorities in top creative and strategic planning roles on HP account teams. During 2020, we saw strong improvements compared to 2019 for underrepresented minorities working on HP account teams and in non-account roles. Moving forward, we will continue to challenge our marketing agency partners to identify underrepresented groups in order to set specific goals, plans, and measurement that help increase diverse creative talent across HP account and senior leadership roles.
Promoting diversity with our legal partners
Our legal department is also focused on improving diversity among our U.S. law firm partners and withholds up to 10% of all invoiced spend of those firms who fail to meet or exceed diverse minimal staffing on work for HP.
Law firms are asked to staff at least one underrepresented minority or one woman partner and one racially/ethnically diverse attorney, each performing at least 10% of the billable hours on HP business. Firms are required to track and share data reflecting compliance quarterly. As of the end of 2020, 93% of engaged firms met the requirements, up from 46% in early 2017 when this initiative was launched.
Overall, 83% of HP’s outside counsel teams were led by a diverse partner at the end of 2020—up from 46% in 2017.
Supporting diversity in the financial sector
In 2020, HP’s treasury department expanded the scope of its diversity initiatives, intended to support greater diversity in the financial sector and to diversify HP’s investor base and banking expertise. HP’s Bank Model—the tool by which HP ranks and prioritizes potential bank partners—incorporates an annual diversity survey that looks at the diversity of the bank(s) overall and the teams that service HP. The rankings that stem from this model are an important factor in banking allocation decisions.
In 2020, HP partnered with Black-, Latino-, women-, veteran-, and disabled veteran-owned banks to distribute $100 million in bonds as part of HP’s inaugural bond offering. HP also appointed a Black- and women-owned firm for the execution of material amounts of share repurchase during 2020 and continued working with a minority firm as one of a small group of commercial paper (short-term borrowing) dealers.
Economic empowerment in South Africa
In South Africa, we support Broad-Based Black Economic Empowerment (B-BBEE) initiatives through our supplier purchasing, to advance distribution of wealth across a broad spectrum of disadvantaged groups.
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During 2020 we spent3:
R185.2 million ($11.2 million) with all B-BBEE-compliant businesses (up 10% and 84.8% of HP’s total spend with suppliers in South Africa in 2020).
• R133.6 million ($8.1 million) with large B-BBEE-compliant businesses (up 8% and 61.1% of total spend).
• R51.6 million ($3.1 million) with small and medium-sized businesses (up 16% and 23.6% of total spend).
• R103.6 million ($6.3 million) with firms with at least 51% Black ownership (down 9% and 47.4% of total spend).
• R39.4 million ($2.4 million) with firms with at least 30% Black women ownership (down 15% and 18.0% of total spend).
• R18.2 million ($1.1 million) with youth-owned firms or firms owned by people with disabilities (up 14% and 8.3% of total spend).
In 2020, HP in South Africa was rated as a Superior Level 1 contributor to B-BBEE, the highest rating possible, which measures the company’s performance in this area.
1Data is for the 12 months ending September 30 of the year noted. Figures are for purchases in the United States and Puerto Rico from U.S.-based businesses. Suppliers are categorized as minority-owned or women-owned, not both. These categories include all sizes of businesses.
2HP’s allocatable indirect spend is calculated based on suppliers’ spending with diverse suppliers and their dollar volume of HP’s business compared to their total revenue.
3The categories “large, B-BBEE compliant businesses” and “small and medium-sized businesses” may overlap with firms with at least 51% Black ownership, firms with at least 30% Black women ownership, youth-owned firms, and firms owned by people with disabilities. As a result, spending in some cases may be counted more than once. Percentage changes noted are compared to 2019 and based on South African Rand.