Essential understands that now more than ever, supplier diversity is critical for our communities and our business. Diverse suppliers enrich local economies, increase sourcing options and foster collaboration and innovation.
So, over the past year we’ve taken proactive steps to source from and partner with businesses owned by individuals representing the diverse neighborhoods where our employees and customers live, work and operate. As we’ve revisited our mission and vision during our first year in operation as Essential Utilities, we’ve incorporated that commitment to Diversity, Equity and Inclusion (DEI) into our foundational documents.
Expanding Diverse Supplier Targets
With this in mind, in early 2021 we took a major step in our Environmental, Social and Governance (ESG) journey by announcing a multi-year plan to increase Essential’s diverse supplier spend to 15% of controllable spend.
We’ve also taken internal steps to increase our work with diverse suppliers in the procurement process, including a regular review of purchases to expand the use of our diverse vendors, updating our internal purchasing website to encourage greater use of qualified diverse suppliers, working with a leading provider of supplier diversity data and enhancing reporting to better recognize our work with such suppliers.
Externally, we’re encouraging diverse vendors to register and become certified to apply for every applicable opportunity. We also reference a commitment to diversity in our supplier code of conduct.
Identifying Diverse Suppliers
Diverse suppliers are measured by majority of ownership and control, and include one or more of the following classifications: Minority-owned Business Enterprise (MBE); Women-owned Business Enterprise (WBE); Veteran-owned Business Enterprise (VBE); or Lesbian, Gay, Bisexual, Transgender-owned Business Enterprise (LGBT).
To be certified as diverse, suppliers must have a valid and current certification from one of the following: State or local government certifying agencies; National Minority Supplier Development Council (NMSDC); Women’s Business Enterprise National Council (WBENC); National Veteran Business Development Certification (NVBDC); National Veteran Owned Business Association (NaVOBA); The National Lesbian, Gay, Bisexual, Transgender Chamber of Commerce (NGLCC).
Building Upon our Efforts
The Essential purchasing department is a member of the National Minority Supplier Development Council, Eastern Minority Supplier Development Council, Women’s Business Enterprise National Council, Women’s Business Enterprise Center East, and Women’s Business Development Center., and we regularly participate in networking events and follow-up meetings to learn from companies with mature supplier diversity programs.
We also have a Tier 2 diverse spend reporting program for our major suppliers, which aims to grow and sustain diverse suppliers beyond Tier 1 direct supplier relationships. This program tracks the certified diverse spend of minority, women, veteran, or LGBT-owned businesses that are the subcontractors to our prime Tier 1 suppliers.
And now, our increased efforts are paying off. In 2020 Essential proudly spent $74 million with diverse suppliers, representing 8.3% of our controllable spend.
At Peoples, we’re thrilled with the progress made thus far through Essential’s supplier diversity program and community outreach. As always, we’ll continue to new explore new opportunities to expand these efforts as part of our ongoing commitment to DEI and ESG initiatives.
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