SDG&E'S SUPPLY CHAIN BOOSTS ECONOMY BY $2.6 BILLION IN 2023
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Insights
The economic impact of San Diego Gas & Electric's (SDG&E) procurement program, generating $2.59 billion and contracting with over 2,000 businesses, is significant. The program's focus on diversity, with 43% of total expenditures going to diverse suppliers, aligns with broader economic trends emphasizing inclusive growth. The direct local impact, with $450.6 million spent in San Diego County and $950.7 million in California, suggests a substantial multiplier effect on the regional economy. This effect can stimulate job creation, increase local revenue and foster a more resilient economic environment.
SDG&E's long-term commitment to surpassing the California Public Utilities Commission's (CPUC) supplier diversity goal for 19 years consecutively demonstrates a sustainable approach to corporate social responsibility. This is likely to enhance the company's reputation and could lead to a more favorable regulatory environment, potentially benefiting shareholders. Moreover, by investing in small and diverse businesses, SDG&E may be contributing to innovation and competitiveness, which can indirectly support the company's operational efficiency and growth prospects.
The success of SDG&E's procurement program can be attributed to its strategic engagement with small and diverse businesses, which reflects a growing consumer and investor interest in companies with strong Environmental, Social and Governance (ESG) practices. The involvement with local suppliers, like Rancho Tree Service, indicates a potential competitive advantage for SDG&E in terms of community relations and local brand perception.
Furthermore, the emphasis on diverse suppliers could appeal to a broader customer base and may lead to increased customer loyalty. This procurement strategy, which includes mentoring relationships between primes and subcontractors, could also create a more robust supply chain for SDG&E, reducing risks associated with supplier concentration and enhancing the company's agility in the face of market changes or disruptions.
SDG&E's procurement program is not only a driver of economic growth but also a reflection of the company's commitment to sustainability and social responsibility. By integrating vegetation management services into their Wildfire Mitigation Plan, SDG&E is addressing critical environmental concerns. This initiative, particularly in a state prone to wildfires, underscores the importance of sustainable practices in utility operations.
The engagement of a Minority Business Enterprise as a prime contractor for such services highlights the dual focus on environmental sustainability and social equity. This approach can enhance SDG&E's sustainability profile and potentially attract investors who prioritize responsible environmental stewardship and community engagement in their investment decisions.
Program Expanded Opportunities for Hundreds of Small and Diverse Businesses, Helping to Promote Economic Prosperity
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"We are laser-focused on maximizing every dollar for our customers, while also growing economic opportunities for small and diverse businesses in our region," said SDG&E CEO Caroline Winn. "Championing people by creating opportunities through diversity, equity and inclusion is one of our core values."
SDG&E contracts with suppliers for a wide range of goods and services, everything from vegetation management, undergrounding, civil engineering and electric construction to IT, fire prevention, project management and material procurement and transport. Since launching its supplier diversity program in the 1980s, SDG&E has helped many small businesses grow into primes. Some of the company's diverse primes are paying it forward by serving as mentors to diverse subcontractors.
Last year, for the first time, SDG&E engaged Rancho Tree Service, a Minority Business Enterprise, as a prime contractor to provide vegetation management services – an important component of the company's Wildfire Mitigation Plan.
"We are a family-owned business, and we are proud of our local operation and the jobs we have created through our vegetation management work with SDG&E," said Jose De La Cruz, owner of Rancho Tree Service. "Our crews help keep local communities safe from wildfires by trimming and clearing trees, bushes and other plants to prevent them from coming into contact with our electric infrastructure, such as power lines."
"Large employers like SDG&E play a significant role in sustaining and growing our region's economy because of the large volume of goods and services they purchase," said Mark Cafferty, president and chief executive officer of the
SDG&E continues to grow its diverse supplier pool through collaboration with community-based organizations and business associations. Learn more about how to do business with SDG&E at sdge.com/SupplierDiversity.
About SDG&E:
SDG&E is an innovative energy delivery company that provides clean, safe and reliable energy to better the lives of the people it serves in
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SOURCE SDG&E
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