PG&E Corporate Responsibility and Sustainability Report 2018

PG&E Chapter 11 Update

Supplier Diversity

For nearly 40 years, working with diverse suppliers and small businesses has been a central component of our mission to provide safe, reliable, affordable and clean energy. 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 include diverse business enterprises (DBEs)—small businesses and businesses owned by women, minorities, service-disabled veterans and LGBTQ individuals—in our supply chain. We collaborate with the public and private sector, including with community-based organizations and diversity advocacy groups, to help grow DBEs 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.

Championing Diverse Suppliers

Within PG&E, a group of supplier diversity champions, with support from the supplier diversity team, 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 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 supplier diversity staff and volunteer outreach ambassadors who share information about how to do business with corporations like PG&E.

Focusing on Small Businesses

To support small businesses, PG&E hosts workshops and training sessions throughout the year, including collaborating with the U.S. Small Business Administration and other community partners to hold capacity-building training seminars.

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 2018, our Prime Supplier Academy celebrated its fourth 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 supplier code of conduct initiatives.

Strengthening Suppliers and Relationships

PG&E offers a wide variety of Technical Assistance Program initiatives 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.

2018 Milestones

Highlights from 2018 include:

  • Offered enhanced training to diverse businesses. We expanded the supplier training we provide in the areas of our strategic sourcing process, greenhouse gas emissions tracking and reporting, financial education, process improvement and risk management.
  • Strengthened education for prime suppliers. We increased our Prime Supplier Academy curriculum to seven in-person workshops that offered resources and tools to help suppliers increase their engagement in supplier diversity, environmental sustainability and adherence with PG&E’s supplier code of conduct.
  • Increased inclusion efforts with Lesbian, Gay, Bisexual, Transgender Business Enterprises (LGBTBE). We expanded our collaborations with local and national LGBTBE organizations and facilitated introductions between LGBTBEs and our line-of-business decision-makers. As a result, we increased our spend year-over-year with these suppliers by more than 70 percent in 2018, spending $2.5 million with nine businesses as direct and subcontracting suppliers.

Measuring Progress

In 2018, PG&E spent $2.98 billion with diverse suppliers, representing 41.43 percent of our total procurement expenditures. This was the seventh consecutive year that PG&E exceeded $2 billion and the 13th 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 $725 million in spending with DBEs, representing a 4.0 percent increase over 2017.

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

  • Minority-owned business enterprises: $1.83 billion
  • Woman-owned business enterprises: $830 million
  • Service-disabled veteran-owned business enterprises: $322 million
  • LGBTQ-owned business enterprises: $2.50 million
5-Year Supplier Diversity Trend (Calendar Year)
Category 2014 2015 2016 2017 2018
Total DBE spend $ (millions) $2,112 $2,468 $2,851 $2,579 $2,982
Total DBE % (based on total spend) 40.9% 44.0% 44.4% 42.3% 41.4%
Supplier Diversity and Small Business Results (percent of total spend)
Category 2016 (%) 2017 (%) 2018 (%)
Grand Total 49.9 47.7 48.6
Minority Men 20.2 16.9 17.4
Minority Women 8.3 8.6 8.0
Minority Business Enterprise 28.4 25.5 25.4
Women Business Enterprise (WBE) 12.4 11.7 11.5
Lesbian, Gay, Bisexual, Transgender Business Enterprise (LGBTBE) 0.02 0.02 0.03
Service-Disabled-Veteran Business Enterprise (DVBE) 3.5 5.1 4.5
Total DBE 44.4 42.3 41.1
PG&E Target (%) 42.0 42.0 40.0
Non-Diverse Small Business 5.5 5.4 7.2
Spend 2016 ($ millions) 2017 ($ millions) 2018 ($ millions)
Total Diverse and Small Business Spend 3,207 2,909 3,502
Supplier Diversity Spend 2,851 2,579 2,982
Non-Diverse Small Business Enterprise Spend 356 330 520