Supply chain responsibility

Across our supply chain, PG&E aims to promote environmental sustainability, diversity, economic growth, and ethical practices.  Collectively, this approach supports our commitment to deliver for our hometowns.

Our approach

Since 2007, PG&E has helped suppliers reduce the environmental impact of the products and services we purchase.  For more than 40 years, we have also been working to promote supplier diversity and continue to make an economic impact by contributing to job creation, tax generation, and revenue.

Our 5,540-plus direct suppliers represent industries such as construction, professional services, vegetation management, and manufacturing and represented $12.3 billion in 2023 spend. About 70% of our direct suppliers are located in California. 

Environmental sustainability

We actively engage with our suppliers in support of PG&E’s commitment to achieve a net zero energy system in 2040.

We initiated a Greenhouse Gas Reduction Roadmap with our suppliers in the key emitting industries of construction services, vegetation management, and manufacturing, which represent over 60% of PG&E’s non-energy-related Scope 3 emissions from purchased goods and services. The roadmap reflects our plan to have our suppliers report greenhouse gas emissions data and set net zero goals by 2030.

Supplier Greenhouse Gas Reduction Roadmap Objectives:

• Suppliers report GHG emissions data and GHG reduction goals
• Suppliers set Science-Based Targets or Net Zero goals

* Key Emitters - Construction, Vegetation Management, Manufacturing and Scorecarded Suppliers

** SBT - Science-Based Target

Measuring progress

We use the results of our annual supplier sustainability assessment to benchmark our responding suppliers’ sustainability performance against our member peers in the Sustainable Supply Chain Alliance. We ask our suppliers to complete a self-assessment and provide their most recent environmental performance data for energy and water use, as well as greenhouse gas emissions and waste generation.

The assessment measures the supplier’s performance and provides detailed benchmarking that is specific to their industry. The assessment can help suppliers develop strategies to reduce environmental impacts and prioritize improvement opportunities.

For suppliers that completed the assessment, 35% indicated that they were using science-based or net zero targets, exceeding our goal of 25%. 

Assessed suppliers reporting emissions and reduction goals

1. In 2022, we began tracking suppliers with science-based or net zero targets in accordance with our Greenhouse Gas Reduction Roadmap for Suppliers.

Supplier engagement in environmental management compared to aggregated Alliance suppliers¹

1. In 2023, we requested sustainability assessment responses from 272 suppliers and achieved a 39% response rate, which represented 42% of PG&E’s 2022 spending.
2. For PG&E suppliers, this refers to measuring all environmental impacts (energy, waste, water, and greenhouse gas emissions), compared to Alliance suppliers who may be measuring one or more environmental impacts.  

Supplier diversity

We collaborate to ensure a diverse, inclusive supply chain that is aligned with the expectations of our customers and communities. We leverage an engaged internal network of leaders and champions who are committed to maximizing opportunities for small and diverse suppliers. We also partner with our prime suppliers, who seek diverse subcontractors to perform work for PG&E, and provide tools and resources to help suppliers. 

Highlights include:

• Supporting a network of supplier diversity champions, who along with supply chain coworkers, support supplier development activities and serve on panels or participate in matchmaking at outreach events.
• Striving to increase our spending with lesbian, gay, bisexual, and transgender and persons with disabilities business enterprises. PG&E partners closely with organizations like BuildOUT and Disabity:IN to identify suppliers to work as prime or subcontractors.

• Offering a Technical Assistance Program to help businesses increase their competitiveness. We issue scholarships for businesses to attend world-class programs at universities across the United States.

• Conducting small business outreach, including attending the CPUC’s Small Business workshops and hosting small business consultations. We also collaborate with the Small Business Administration.

For more information on how we support the success of diverse businesses, view our 2023 Supplier Diversity Annual Report.

Measuring progress

In 2023, our utility diversity spending was $4.2 billion with diverse suppliers. This spending represented 36.6% of our total procurement. Highlights of PG&E’s 2023 spending with diverse suppliers include:

• Minority business enterprises: $2.5 billion
• Woman business enterprises: $1.3 billion
• Disabled veteran business enterprises: $382 million
• LGBT business enterprises: $9.0 million
• Persons with disabilities business enterprises: $38.6 million

Annual small business results¹

1. Results provided are based on a federally mandated methodology and represent spend in the government fiscal year of October 1 – September 30. 

Ethical supply chain

Our Supplier Code of Conduct (Code) sets PG&E’s expectations for our suppliers regarding ethical business practices, conduct, and compliance with applicable laws, regulations, and PG&E policies. This includes promoting and ensuring a strong safety culture and reporting concerns. Suppliers are expected to understand and acknowledge their obligations and maintain conformance to the Code.

We conduct supplier training and perform periodic reviews to check supplier conformance to the Code. Suppliers new to PG&E are asked, prior to contracting, to confirm that they will comply with the obligations outlined in the Code and that they have a process to share the Code with individuals assigned to the work. The training and verifications we conduct help to ensure awareness and drive conformance to the Code.

In 2023, we added the California Consumer Privacy Act to the Code to ensure that suppliers manage data and are responsive to any request regarding the handling of personal information. We also added an expectation for suppliers to evaluate the impact of their work on Environmental and Social Justice communities while providing more sustainable, inclusive, and equitable customer solutions.