Operational Excellence

Supply Chain

Our Supply Chain organization is committed to the Company’s transition to a clean energy future and reflects our values of environmental stewardship, integrity, diversity, equity and inclusion. In 2021, our procurement activities continued to support the clean energy transition while simultaneously upholding our company values and our strategic priorities of safety, operational excellence, the customer experience, and cost savings.

Our Investments in a Clean Energy Future

In 2021, Supply Chain’s sustainability related investments in clean energy and grid modernization included the execution of $89 million in battery storage contracts, $128 million in energy efficiency and demand management contracts, $41 million in smart meter AMI contracts, and $30 million in electric vehicles and EV charging infrastructure contracts.

Supporting Sustainability Through Our Vendors

We aim to continuously improve business practices by reducing our waste streams, reusing materials, and seeking new recycling opportunities. We have partnered with our largest suppliers of materials to improve business processes to control and reduce the environmental impacts associated with their energy usage, waste, and impacts on natural resources and transportation.

Last year, we recruited 40 of our vendors to complete sustainability assessments and develop measurable plans to improve their environmental performance in water and energy use, waste production and greenhouse gas emissions. We also implemented a new process to negotiate sustainability-related commitments into new contracts and monitor these commitments throughout our relationship with a vendor.

Partnering with Our Industry Peers

Con Edison is an active member of the Electric Utility Industry Sustainable Supply Chain Alliance (Alliance). The Alliance is an electric utility industry organization comprised of major utilities from across the United States that are committed to leveraging supply chain best practices to improve sustainability. Con Edison is taking an active role in collaborating with our industry peers to map utility supply chains to identify sustainability-related risks and develop guidance for mitigation.

Working with our colleagues in the Alliance we conducted a “hot spot assessment” last year to identify how supply chain activities impact carbon emissions. This assessment is providing insights on emission sources in key purchase categories so that we can effectively target our supply chain mitigation efforts.

In 2022, we will work with our industry peers to develop guidance for sustainable supply chain best practices and their implementation. We will also be developing tools that will equip our vendors with the capacity to track and report their efforts to reduce carbon emissions and support our Company’s commitment to clean energy.

Creating an Ecosystem for Innovation and Opportunity

In support of our Company’s commitment to the New York Climate Leadership and Community Protection Act (CLCPA) and the goal of a carbon-free grid by 2040, Supply Chain is partnering with our R&D team, to lead a collaboration with Brookhaven National Laboratory (BNL) to develop solutions to challenges such as grid modernization, weather modeling, battery storage, and renewable energy.

This collaboration is unique. We are developing an ecosystem of stakeholders comprised of utilities, national labs, government agencies, academic institutions, environmental justice advocates, minority- and women-owned business enterprises (MWBEs) and academic institutions. As part of this initiative, our Supplier Diversity team is partnering with stakeholder groups such as the National Minority Supplier Development Council and Historically Black Colleges and Universities. The program also recruits minority professionals into the energy industry and MWBEs to participate in the development and commercialization of solutions to challenges faced within the energy industry.

Supporting our Community

Con Edison’s clean energy vision includes an equitable clean energy future – a future in which all our residents not only benefit as recipients of our energy efficiency programs, but also have the opportunity to participate in the implementation of these programs as vendors and employees. Our Supply Chain organization supports this commitment through its Green Energy Opportunities Program and Clean Energy Academy, which is a partnership between our Energy Efficiency Program, Willdan Energy, the State of New York, and non-profit organizations like the Fortune Society, Green City Force, and Non-traditional Employment for Women.

Through these collaborations we are using energy efficiency projects subsidized by Con Edison to create contract opportunities for MWBE subcontractors and jobs for low-income New York City housing residents. So far, this program has yielded over $15 million in contract opportunities for MWBE subcontractors. It has also provided training to over 250 low-income New Yorkers in electrical mechanical building systems, including lighting, HVAC, and refrigeration. We will continue to expand this program and have secured $2.1 million to train over 900 students in 2022. Projects completed through this program also help Con Edison achieve its goals to reduce energy use and associated costs for customers.

Our Supply Chain sustainability initiatives help to support our commitment to create jobs within the communities we serve. In 2021, we purchased $362 million from women-owned and minority-owned businesses and our expenditures with small businesses were $582 million.

Business Ethics in Our Supply Chain

Ethical business practices are an important priority of our sustainability program. Our Company operates with the highest ethical standards and requires all vendors to conduct themselves with integrity and in full compliance with the laws and regulations that govern our business activities. To that end, Supply Chain sends out clear communications to all of our vendors regarding the requirements articulated in our Vendor Standards of Business Conduct (VSBC). This document outlines our expectations for vendors on matters such as human rights, child labor, freedom of association, responsible sourcing of minerals, responsible procurement, environmental management, and supplier diversity. The Vendor Standards of Business Conduct also defines the consequences of breaking these rules.

Under the terms of the VSBC, all vendors are subject to review by our internal or external auditors, and any vendors determined by Con Edison to be in violation of our Vendor Standards of Business Conduct provisions are subject to contract termination or suspension. In 2022, we will collaborate with our industry colleagues in the Electric Utility Industry Sustainable Supply Chain Alliance to develop an auditable process that will ensure compliance with ethical business practices.