PG&E Corporate Responsibility and Sustainability Report 2017

Supplier Diversity

Every day, PG&E relies on a large network of diverse suppliers and small businesses as we provide safe, reliable, affordable and clean energy to our customers. For 36 years, this supply chain has helped us 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 more than 100 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. We’ve also established a new “Prime Supplier Academy” to provide prime suppliers with training sessions designed to increase their understanding of the business case for supplier diversity. Training sessions also provided attendees with the strategies and tactics to implement best practice supplier diversity program elements into their own programs.

Strengthening Suppliers and Relationships

PG&E offers a wide variety of technical assistance and training programs to our suppliers, many in collaboration with community organizations. 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 and U.C. Berkeley.

PG&E also sponsors educational scholarships that help 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.
  • 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.
  • Diverse Suppliers Go Green instructs participants on how to establish a sustainability program, reduce their environmental footprint and identify green business opportunities.
  • Diverse Suppliers Go Global offers information and shares resources on how to evaluate and participate in the global marketplace.

Additionally, PG&E sponsors the participation of mature DBE suppliers in the University of California Advanced Technology Management Institute, an executive training initiative focused on the strategic importance of innovation and technology.

2016 Milestones

In 2016, PG&E spent $2.85 billion with diverse suppliers, representing 44.4 percent of our total procurement. This was the fifth consecutive year that PG&E exceeded $2 billion and the 11th 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 prime suppliers reporting more than $679 million in spending with DBEs, representing a 9.8 percent increase over the prior year.

Highlights from 2016 include:

  • Graduated five businesses from the Supplier Development Program. For the last six years, we’ve provided participating suppliers with mentorship, capacity-building resources, opportunity identification and value chain analysis. PG&E recognized five businesses that completed the program in 2016 and welcomed five new DBE participants into the program.
  • Strengthened training for prime suppliers. Through our Prime Supplier Academy, we launched 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.
  • Offered innovative supplier development initiatives. As a part of our Technical Assistance Program, PG&E offers workshops that raise awareness in the diverse business community about important business considerations such as cybersecurity, safety, environmental sustainability and global supply chains.
  • Continued to support the national SupplierPay initiative. PG&E was the first energy provider and one of the initial 26 companies to participate in the federal SupplierPay Initiative, which helps small business suppliers better manage their cash flow by expediting payments for goods and services and promoting better access to financing.

Measuring Progress

In 2016, PG&E spent $6.4 billion on products and services, a 14.6 percent increase of $817.5 million compared to the prior year. In comparison, at $2.85 billion, our diverse spending increased by 15.5 percent—or more than $382.8 million—surpassing the general rate of increase in overall procurement.

Highlights from 2016 include the following spending statistics:

  • Minority-owned business enterprises: $1.8 billion, a 14.9 percent increase,
  • Woman-owned business enterprises: $797.7 million, a 10.3 percent increase,
  • Service-disabled veteran-owned business enterprises: $223.9 million, a 44.8 percent increase, and
  • LGBTQ-owned business enterprises: $1.2 million in PG&E’s first year of reporting.
5-Year Supplier Diversity Trend
Category 2012 2013 2014 2015 2016
Total DBE $ (millions) $2,052 $2,317 $2,112 $2,468 $2,851
Total DBE % (based on total spend) 38.8% 42.1% 40.9% 44.0% 44.4%
Supplier Diversity and Small Business Results (percent of total spend)
Category 2014 (%) 2015 (%) 2016 (%)
Grand Total Footnote 1b 48.4 50.2 45.2
Minority Men 19.0 20.2 20.2
Minority Women 7.4 8.1 8.3
Minority Business Enterprise 26.4 28.4 28.5
Women Business Enterprise (WBE) 12.1 12.9 12.4
Service-Disabled-Veteran Business Enterprise (DVBE) 2.4 2.8 3.5
Total DBE 40.9 44.0 44.4
PG&E Target 40.0 41.0 42.0
Non-Diverse Small Business Footnote 1a 7.5 6.2 0.8
Spend 2014 ($ millions) 2015 ($ millions) 2016 ($ millions)
Total Diverse and Small Business Spend 2,497 2,818 3,108
Supplier Diversity Spend 2,112 2,468 2,851
Non-Diverse Small Business Enterprise Spend 385 349 257
  • 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 2014 data versus what was previously reported. 1a, 1b

Looking Ahead

With the many benefits our supplier diversity program brings, we will continue to expand and grow the program, our outreach and supplier support. In 2017, PG&E will focus on the following areas:

  • Continuing to educate the community of small and diverse businesses about the importance of having rigorous safety programs,
  • Promoting increased prime supplier support of PG&E’s supplier diversity initiatives through the 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, scalable growth, and
  • Focusing on LGBTQ business growth through targeted outreach and workshops on how to do business with PG&E.