By Tony Khing
SAN FRANCISCO — PG&E spent a record $2.5 billion with diverse suppliers in 2015, accounting for 44 percent of its total procurement, the company announced today (March 7).
For the fourth straight year, diverse suppliers accounted for $2 billion-plus of the utility’s spend and more than 40 percent of the utility’s total spend for the third year in a row.
In addition, PG&E eclipsed the California Public Utilities Commission’s diverse spending goal of 21.5 percent for the 10th consecutive year.
“By building a supplier network that taps into California’s extraordinary diversity, we are helping to create greater economic opportunity in our local communities as we work to provide our customers with energy that is safe, reliable, affordable and clean,” said PG&E Chairman, CEO and President Tony Earley.
In 2015, PG&E established new spending standards in all reporting categories. Minority Business Enterprise spend rose 17 percent ($1.591 billion from $1.365 billion in 2014 — an increase of $226.1 million). Women Business Enterprise increased 16 percent ($723.1 million from $621.9 million — $101.2 million). And Service Disabled Veteran went up 24 percent ($154.6 million from $125.1 million — $29.5 million).
Over the past 35 years, PG&E has been committed to supporting a diverse supply chain. The company has developed one of the leading supplier diversity programs in the energy industry.
PG&E’s dedication to supplier diversity is shown in numerous ways. In addition to maintaining high levels of spend with diverse suppliers, PG&E has focused on elevating the quality of its supplier diversity program by addressing key success factors for suppliers:
- PG&E was the first utility and one of the initial 26 companies to participate in President Obama’s SupplierPay Pledge, which encourages large corporations to develop ways to assist small business suppliers address financial challenges.
- In 2014, PG&E introduced “Diverse Suppliers are Cyber-Secure,” a technical assistance program to raise cybersecurity awareness within the small and diverse business community by highlighting the risks associated with cybercrime and resources to help mitigate risks.
- PG&E has actively supported the development of its diverse suppliers through mentorship, scholarships, opportunity identification and value chain analysis. In addition, PG&E’s formal Supplier Development Program has matched 30 diverse suppliers with PG&E senior executive mentors.
- In 2012, PG&E was the first energy company to add LGBT-owned enterprises, certified by the National Gay and Lesbian Chamber of Commerce (NGLCC), to its supplier diversity program. Last year, PG&E also played hosts to the first LGBT Business Builder sponsored by the U.S. Small Business Administration, NGLCC, Golden Gate Business Association and CPUC.
PG&E’s Supply Chain Responsibility Department has produced many industry-leading events to support diverse businesses. Some of the most popular have been workshops that provide networking opportunities and information to help enterprises compete for PG&E’s business.
For example, PG&E partnered with an internationally-known advisory firm last year to educate diverse consulting service suppliers on the company’s key initiatives and consulting opportunities. PG&E has also held workshops to educate Hispanic, African-American and Disabled Veteran-owned businesses on how to compete for utility business.
PG&E has also been an active participant in organizations such as the CalAsian Chamber of Commerce and an active sponsor or participant in activities such as the American Indian Chamber of Commerce of California EXPO ’15 Annual Conference.
PG&E’s diversity programs have received numerous honors in the past year (partial list):
- Minority Business News Magazine named Earley to its 2015 “Best of the Decade” list in recognition of the company’s long-standing record of supporting minority business development through its supplier diversity programs.
- Recognized in 2015 by Black Enterprise as one of the “40 Best Companies for Diversity.” The publication cited PG&E’s Supplier Diversity Program as a strength.
- Received a perfect 100 percent rating on the Human Rights Campaign’s 2016 Corporate Equality Index for its consistently strong commitment to embrace diversity and inclusion.
- The U.S. Hispanic Chamber of Commerce named PG&E to its “2015 Million Dollar Club” for the second consecutive year for spending $477 million with Hispanic-owned businesses in 2014.
- The Women’s Business Enterprise National Council recognized PG&E on its 2014 list of “America’s Top Corporations for Women’s Business Enterprises.”
“PG&E has shown a commitment to the development of its business relationships with MBE vendors,” said Rickey Hart, CEO of RDAF Energy Solutions, LLC, an energy consulting and management company. ”The assistance to minority business enterprises from PG&E is brilliant. If more corporate entities took the interest that PG&E has in MBEs, there would be a lot more successful MBEs to offer products and services to corporate America.”
PG&E’s Supply Chain Responsibility website contains more information about the program. The site also provides details on how to become a certified diverse supplier.
Email Currents at Currents@pge.com.