PG&E Corporate Responsibility and Sustainability Report 2018

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Supplier Diversity

For nearly 40 years, PG&E has embraced working with diverse suppliers and small businesses as a core part of our work to provide safe, reliable, affordable and clean energy to our customers. Building a diverse supply base is an essential aspect of our commitment to better serve our customers and support economic development, create local jobs and support diversity in our communities.

Our Approach

PG&E makes it a priority to bring diverse business enterprises (DBEs)—small businesses and businesses owned by women, minorities, service-disabled veterans and LGBTQ individuals—into our supply chain. We also connect DBEs with other organizations to help grow their businesses and empower them to succeed in today’s economy.

In addition, we host workshops and training sessions to help our suppliers operate more safely, securely and sustainably. Helping our diverse suppliers improve and grow, in turn, helps us better achieve our energy delivery goals, improve our local communities and ultimately better serve our customers.

Championing Diverse Suppliers

Within PG&E, a group of supplier diversity champions set diversity goals, share best practices and monitor progress within their lines of business, with the direct support of senior leadership. In addition, PG&E’s annual Supply Chain Responsibility Awards recognize employees who have made the largest impact on our diversity efforts.

At diverse business community events, we are represented by dozens of volunteer outreach ambassadors who share information about how to do business with PG&E.

Focusing on Small Businesses

To support small businesses, PG&E hosted several workshops and training sessions throughout the year, including collaborating with the U.S. Small Business Administration to hold capacity-building training seminars. Training topics ranged from how to complete a request for proposal to the importance of certifications, to financial education on understanding credit profiles and financial statements.

PG&E also developed the Accelerated Pay Program in 2015 to support small business suppliers in need of financial and cash flow assistance. Through the program, PG&E offers business owners scholarships to business financial analysis and management courses at the University of California, Berkeley, as well as one-on-one business coaching sessions with a professional advisor.

Encouraging Prime Suppliers to Participate in Supplier Diversity

We encourage our prime suppliers to submit a supplier diversity plan, set a supplier diversity performance goal, report on subcontracting with diverse suppliers and then detail their progress toward these goals.

In 2017, our Prime Supplier Academy celebrated its third year of success in delivering supply chain responsibility training to PG&E suppliers. The Academy provides resources, tools and training to assist prime suppliers with increasing engagement in and ownership of their own supplier diversity initiatives, as well as environmental sustainability and ethical code of conduct initiatives. This includes supplier code of conduct webinars to educate suppliers on PG&E’s conduct and conflict of interest standards.

Strengthening Suppliers and Relationships

PG&E offers a wide variety of technical assistance programs to our suppliers, many in collaboration with community organizations. Among other things, these initiatives help diverse suppliers build their business acumen and include scholarship opportunities for the UCLA Management Development for Entrepreneurs Program, the University of Washington Minority Business Executive Program, Tuck Minority Business Programs at Dartmouth and U.C. Berkeley.

PG&E also sponsors educational scholarships that help diverse suppliers manage supply chain risk and improve quality via International Organization for Standardization (ISO) certification. These scholarships provide DBEs with one-on-one training that helps them successfully implement ISO standards in their management systems.

PG&E’s Technical Assistance Program includes signature training packages for diverse suppliers:

  • Diverse Suppliers are Safe educates diverse suppliers on developing and improving their safety plans, with four trainings in 2017.
  • Diverse Suppliers are Cyber-Secure raises cybersecurity awareness and offers approaches that a small business can take to cost-effectively assess its vulnerabilities and reduce risks, with three workshops in 2017.
  • Diverse Suppliers Go Green instructs participants on how to establish a sustainability program, reduce their environmental footprint and identify green business opportunities, with three workshops in 2017. A third-party expert helped suppliers assess their maturity in sustainability, identify sustainability projects relevant to their operations, create plans to implement those projects and report the results.
  • Diverse Suppliers Go Global workshops offer information and share resources on how to evaluate and participate in the global marketplace.
  • Business Tune Ups for Diverse Business is a new initiative created to help DBEs become more competitive and explore strategies for operational efficiency, increase productivity and reduce costs.
  • Future-Proofing Your Business addresses some of the disruptive forces driving rapid change in business. Participants in this pilot reviewed impacts such as e-commerce, big data, globalization, smart grid, advanced technology, artificial intelligence and robotics.

2017 Milestones

Highlights from 2017 include:

  • Graduated five businesses from the Supplier Development Program. For the last seven years, we’ve provided participating suppliers with mentorship, capacity-building resources, opportunity identification and value chain analysis. In 2017, 10 DBEs participated in the program.
  • Strengthened training for prime suppliers. Through our Prime Supplier Academy, we offered courses and programs for prime suppliers covering the role that supply chain diversity and sustainability play in corporate strategies and providing best practice tools to support their efforts. In 2017, more than 200 prime suppliers attended three in-person workshops on supplier diversity.
  • Offered innovative supplier development initiatives. As a part of our Technical Assistance Program, PG&E offered workshops to raise awareness in the diverse business community about important business considerations such as cybersecurity, safety, environmental sustainability and global supply chains.

Measuring Progress

In 2017, PG&E spent $2.58 billion with diverse suppliers, representing 42.25 percent of our total procurement expenditures. This was the sixth consecutive year that PG&E exceeded $2 billion and the 12th consecutive year Pacific Gas and Electric Company exceeded the California Public Utilities Commission’s goal of 21.5 percent.

In addition, PG&E’s supplier diversity subcontracting performance increased, with PG&E’s prime suppliers reporting more than $697 million in spending with DBEs, representing a 2.7 percent increase over 2016.

Highlights of PG&E’s spending with diverse suppliers included:

  • Minority-owned business enterprises: $1.55 billion
  • Woman-owned business enterprises: $712 million
  • Service-disabled veteran-owned business enterprises: $311 million
  • LGBTQ-owned business enterprises: $1.45 million
5-Year Supplier Diversity Trend
Category 2013 2014 2015 2016 2017
Total DBE spend $ (millions) $2,317 $2,112 $2,468 $2,851 $2,579
Total DBE % (based on total spend) 42.1% 40.9% 44.0% 44.4% 42.3%
Supplier Diversity and Small Business Results (percent of total spend)
Category 2015 (%) 2016 (%) 2017 (%)
Grand Total Footnote 1 50.2 49.9 47.7
Minority Men 20.2 20.2 16.9
Minority Women 8.1 8.3 8.6
Minority Business Enterprise 28.4 28.5 25.5
Women Business Enterprise (WBE) 12.9 12.4 11.7
Lesbian, Gay, Bisexual, Transgender Business Enterprise (LGBTBE) N/A 0.02 0.02
Service-Disabled-Veteran Business Enterprise (DVBE) 2.8 3.5 5.1
Total DBE 44.0 44.4 42.3
PG&E Target (%) 41.0 42.0 42.0
Non-Diverse Small Business Footnote 1 6.2 5.5 5.4
Spend 2015 ($ millions) 2016 ($ millions) 2017 ($ millions)
Total Diverse and Small Business Spend 2,818 3,207 2,909
Supplier Diversity Spend 2,468 2,851 2,579
Non-Diverse Small Business Enterprise Spend 349 257 330
  • 1. Beginning with the 2015 reporting period, PG&E is reporting Small Business Enterprise results on a calendar-year basis. Previous-year reporting on small business enterprise spending aggregated partial year results (October through December of the previous year plus January through September of the reporting year). This accounts for the changes in percentages and spending totals reflected in the 2016 data versus what was previously reported.1a, 1b

Looking Ahead

PG&E will continue to expand our supplier diversity program, outreach and support. Our focus in 2018 includes:

  • Continuing to educate the community of small and diverse businesses about the importance of having rigorous safety programs,
  • Promoting increased prime supplier engagement in supplier diversity initiatives through our Prime Supplier Academy training courses,
  • Supporting executive training initiatives that encourage mature diverse businesses to consider competing for opportunities in emerging technology,
  • Providing scholarships for ISO 9001 and 14001 certification training to help diverse businesses build the necessary practices for successful and scalable growth, and
  • Focusing on LGBTQ business growth through targeted outreach and workshops on how to do business with PG&E.