PG&E Corporate Responsibility and Sustainability Report 2018

PG&E Chapter 11 Update

Supply Chain Sustainability

Environmental sustainability is a guiding factor for how we run our business, including how we evaluate and manage our supply chain priorities and processes. It guides how we select, engage with and manage our vital supplier business partners, and influences our products, service choices and strategies.

Our Approach

Since 2007, PG&E has supported environmental responsibility, excellence and innovation in our supply chain operations.

We engage our suppliers on sustainable performance in a number of ways: through requests for proposals (RFPs), scorecard reviews, a sustainability survey and through our supplier education programs. In addition, we seek to identify product and service strategies that measurably improve our environmental profile, using the “reduce-reuse-recycle” framework to guide our strategies and plans:

  • Reduce resource consumption through our product and service choices. Where there is no feasible option to reduce consumption, we seek to buy products and equipment with a lower environmental footprint.
  • Reuse products and equipment when they can be repaired or refurbished to meet required performance standards.
  • Recycle products and equipment with licensed vendors if they cannot be refurbished for reuse.

When recycling options are not available, we dispose of products in compliance with environmental requirements.

2018 Milestones

In 2018, PG&E’s supply chain sustainability efforts focused on increasing supplier and internal engagement and education. Highlights included:

  • Launched new online sustainability survey tool. In partnership with the Alliance, we implemented a new online survey tool, The Sustainability Project, to measure and track supplier environmental sustainability performance. Suppliers completed an industry-specific self-assessment against environmental best practices and were encouraged to identify areas of improvement based on the assessment results.
  • Added technical assistance workshops for suppliers focused on sustainability. In addition to our Diverse Suppliers Go Green workshop, we developed two new technical assistance workshops. The Greenhouse Gas (GHG) Calculation training educates suppliers on the source of GHGs, how to minimize their release and how to use tools to calculate emissions. The Supplier Code of Conduct training educates suppliers on the various components of PG&E’s Supplier Code of Conduct and how to establish a management system to maintain conformance, and provides resources to help a supplier develop their own employee and supplier codes of conduct.
  • Benchmarked our performance for continuous improvement. For the fourth year in a row, we benchmarked as a leader among electric providers in the Alliance’s Supply Chain Environmental Management Framework. We improved our performance in supply chain management engagement and commitment, supplier performance evaluation and supplier performance improvement.
  • Recognized employees through our internal sustainability awards. Through our Supply Chain Responsibility Awards, we recognized teams committed to a range of initiatives, including educating fellow employees on the environmental impacts of printer paper, demonstrating innovation in concrete repair and avoiding asphalt paving due to improved project execution.

Measuring Progress

In 2018, we requested sustainability survey responses from more than 200 suppliers representing 80 percent of PG&E’s spending. We achieved an 89 percent response rate, which includes 52 more supplier survey responses than the previous year.

The new survey tool provides better details about a supplier’s efforts to embed environmental sustainability in their work practices. PG&E has insight into our suppliers’ specific environmental best practices that make their operations more sustainable and where the predominant gaps are in various industries. The tool also provides suppliers the opportunity to benchmark their performance against industry peers and prioritize improvement opportunities. We aligned our scoring of survey responses with our long-standing supplier environmental performance expectations.

PG&E maintained the 2017 target for supplier environmental performance of at least 75 percent of top-tier suppliers achieving a score of three or higher on a five-point scale. Suppliers earn two points for assessing their current performance, two points for identifying one or more specific improvement actions, and one point for publicly reporting environmental performance. PG&E exceeded its goal, with 85 percent of top-tier suppliers meeting this expectation.

Performance Against PG&E’s Supplier Environmental Performance Standard Footnote 1
Percentage of PG&E Top-Tier Suppliers Aligning with Expectations 2013 2018
Measure environmental performance 70% 100%
Identify areas for improvement 66% 68%
Public reporting of environmental performance 41% 53%
  • 1. In 2018, PG&E revised the methodology for assessing survey responses due to the implementation of a new survey tool. In the table above, data for 2013 was updated to align with the 2018 calculation methodology.1

Annually, we benchmark our supply chain environmental sustainability performance against the other Alliance members. PG&E’s suppliers have demonstrated leadership in tracking environmental impacts and setting voluntary reduction goals compared to all suppliers surveyed by Alliance members.

PG&E Supplier Engagement in Environmental Management Compared to Aggregated Alliance Suppliers
Percentage of Suppliers Tracking Impacts Alliance Suppliers PG&E Top-Tier Suppliers
Measure environmental performance 32% 100%
Identify areas for improvement 14% 68%
Public reporting of environmental performance 13% 53%

Additionally, PG&E’s Supply Chain Environmental Sustainability Program continued to lead among electric providers across different attributes. For example, some of the attributes benchmarked include supplier requirements; supplier, product and service selection; performance management; and performance reporting and recognition.

PG&E Supply Chain Sustainability Benchmarked Performance
2017 2018
Percentage of attributes outperforming Alliance peers 75% 75%
Percentage of attributes at or better than Alliance peers 100% 100%