Supplier Sustainability


Percentage of PG&E’s top tier suppliers that completed a survey on their environmental practices in 2012, part of our Supplier Environmental Performance Standards

As PG&E works to build a more sustainable supply chain, we are focused on fostering responsibility, excellence and innovation within our supplier network. We are also working to further integrate these efforts with our ongoing commitment to promote safety, build more diverse suppliers and small businesses into our supply chain, ensure product quality and performance, maintain a high standard of compliance and ethics, and manage costs.

Strengthening Our Business Practices and Systems

PG&E remains focused on maintaining strong internal processes and systems to manage the performance of our top 100 suppliers. These companies include the most strategic suppliers for our business, including those with whom we spend significant dollars and who are critical to our operations.

Our supplier performance management program provides a structured, integrated process to jointly develop rigorous metrics and key performance indicators, review performance and develop goals for continuous improvement. We conduct recurrent performance evaluations with each top tier supplier using a scorecard of key performance indicators such as safety, product quality and operations, supplier diversity and environmental performance.

In 2012, we took an important step to update the environmental performance metric included in the scorecard and help create a clearer path for suppliers to compete for PG&E business on the basis of environmental sustainability.

We introduced a set of Supplier Environmental Performance Standards for our top tier suppliers, which collectively represent approximately 65 percent of our spend. The standards promote greater transparency, rigor and accountability by setting the expectation that all top tier suppliers:

  1. Implement an Environmental Management System and track greenhouse gas emissions (Scope 1 and 2), energy, water, waste and compliance with environmental requirements.
  2. Set voluntary reduction goals in three of the following areas: greenhouse gas emissions (Scope 1 and 2), energy, water and waste.
  3. Publicly report their performance against the goals.

To score suppliers against the Environmental Performance Standards, as well as to identify areas for improvement, PG&E uses supplier responses to an annual survey conducted by the Electric Utility Industry Sustainable Supply Chain Alliance. In 2012, PG&E achieved a 100 percent completion rate from surveyed suppliers.

Recognizing Innovation

An important element of PG&E’s supplier engagement is to recognize suppliers for strong performance. This includes PG&E’s Green Supplier of the Year Award to recognize suppliers that demonstrate excellence across a broad spectrum of environmental factors.

In 2012, OneSource Distributors, LLC, a distributor of products used in PG&E’s maintenance, repair and operations activities, earned the award for their work implementing an environmental tracking system to monitor comprehensive reductions in greenhouse gas emissions. This program included managing shipments, consolidating truckloads and giving preference to sea and rail shipments. In addition, OneSource achieved ISO 14001 certification for four facilities in California.

Partnering with Industry Peers

PG&E continues to be an active member of the Electric Utility Industry Sustainable Supply Chain Alliance, a consortium of utilities that PG&E co-founded in 2008 to advance sustainable business practices among utility industry suppliers. The Alliance provides a forum to benchmark our performance and share best practices in areas ranging from fleet operations to life cycle assessment.

The Electric Utility Industry Sustainable Supply Chain Alliance recognizes the benefits of working together to green the electric utility industry supply chain.

PG&E has actively served on several Alliance working groups including those focused on opportunities for more sustainable transformers, pallets, wire and cable and wood poles. Consistent with the Alliance’s Strategic Plan, PG&E voluntarily reports its supply chain operations greenhouse gas emissions, and its energy consumption and reduction goals.

In 2012, PG&E also participated in the Alliance’s second Annual Sustainability Forum, where suppliers and utilities shared best practices and explored potential areas of collaboration.

Future Directions

PG&E’s supply chain management strategy is focused on continuous improvement and operational efficiency.

Looking ahead, this includes working to institutionalize and scale our supplier sustainability efforts. We are exploring opportunities to broaden the scope of our focus beyond top tier suppliers and their environmental performance. To do so, we are conducting a systematic assessment and prioritization of the risks, issues and opportunities across PG&E’s service and product categories.