PG&E's commitment to diversity and a culture of inclusion is central to the way we approach each employee, customer and business partner. As a major purchaser of goods and services, we continue to raise the bar in fulfilling this commitment by integrating diverse suppliers into our supply chain. Our well-established Supplier Diversity Program promotes economic vitality in the communities we serve by utilizing women-, minority- and service-disabled-veteran-owned businesses (WMDVBE or diverse enterprises) for a wide range of important products and services.
For the second year in a row, PG&E slightly exceeded the California Public Utilities Commission's (CPUC) targets for diverse spending. The target aims to direct 21.5 percent of the Utility's overall spending to diverse firms. In 2007, the Utility's diverse spending hit 21.7 percent. This represented $600 million of business with WMDVBE suppliers, the most in the 27-year history of our Supplier Diversity Program and a $107 million increase over 2006.
The Utility increased its spending in all three WMDVBE categories. Spending increased by $68 million, or 20.28 percent, with minority business enterprises; $38 million, or 28.27 percent, with women business enterprises; and $400,000, or 1.81 percent, with disabled-veteran-business-enterprises.
Diverse Supplier Spending Targets
Helping A Small Diverse Business Grow and Thrive
By working with diverse local businesses of all sizes, PG&E is creating successful partnerships that better serve our customers and contribute to the overall economic growth and development of the state. Alvah Contractors, Inc., a small Native American-owned business based in Folsom, California, is one of many examples of this long-standing commitment and approach.
Cameron Hale, owner of Alvah Contractors, Inc., worked in the utility business for 15 years for various companies, including a large supplier to PG&E. With these large firms, he often had difficulty helping the contractors meet the aggressive supplier diversity targets set by PG&E and the CPUC. Then, at a PG&E workshop, he was inspired to help address the challenge head-on—by starting his own minority-owned small business.
As Mr. Hale moved through the process of becoming a certified WMDVBE business, PG&E provided training and networking opportunities to support the development of his company and explained how to qualify as a CPUC-approved minority-owned enterprise. Alvah now serves as an electrical subcontractor for PG&E.
PG&E's partnership with Alvah involved dozens of employees from across the organization, all equally committed to the company's success. "Everyone worked together to help make my company successful," said Mr. Hale. "Without these dedicated people, it would have been very difficult, if not impossible, to get Alvah Contractors where it is today."
Yet, 2007 was a challenging year. Several corporate strategic initiatives to enhance service to customers and provide value to shareholders created significant hurdles for our program. This included our efforts to engage diverse suppliers in contract opportunities to install specialized equipment to maintain electric transmission reliability and replace aging equipment. Each represented new areas where PG&E has not traditionally found diverse suppliers large enough to independently handle the work in a direct contracting capacity.
To address these challenges, PG&E worked to connect our primary suppliers with subcontractors in the WMDVBE business community. These efforts resulted in an almost $46 million increase in subcontracting results, approximately 32 percent higher than 2006.
Within the company, we expanded the staff responsible for our program. We also formed cross-functional teams to collaborate on meeting supplier diversity goals. And we held our first annual Supplier Diversity Celebration to honor individuals and teams for supplier diversity results and reinforce the company's overall commitment. The event also included training for suppliers designed to help them maximize opportunities with PG&E.
Aggressive outreach and targeted partnerships with our communities also contributed to our success. PG&E reached out to prospective WMDVBEs at more than 100 outreach events in 2007. PG&E was also one of the first utilities to support the formation of the National Utilities Diversity Council, a new non-profit organization focused on assisting utility commissioners and companies with reaching their diversity goals. Additionally, we continued our work with organizations that support the growth of WMDVBE suppliers, such as ethnic chambers of commerce, the National Minority Supplier Development Council and the Women's Business Enterprise National Council and their local affiliates.
In 2008, a top priority for PG&E will be to work collectively to exceed the CPUC's goal of 21.5 percent through rigorous monitoring and measurement of direct and subcontracting results. In addition, PG&E will strengthen its partnerships with key organizations that have demonstrated success in developing and referring viable WMDVBE suppliers.
- Northern California Supplier Development Council Hall of Fame Award
- Asian Enterprise Magazine: Top Corporation for Asian Pacific American Suppliers
- Black Enterprise Magazine: One of 15 companies recognized for Supplier Diversity with African American Suppliers
- California Black Chamber of Commerce: Diversity and Procurement Outreach Award
- California Black Legislative Caucus Foundation: Diversity Award
- Diversity Careers in Engineering & Information Technology: Supplier Diversity Award
- Hispanic Business Magazine: Number 18 on its list of Diversity Elite
- Minority Business News USA: First Ladies of Diversity Award