Leveraging Supply Chain
Best Practices
Our Supply Chain organization recognizes the effects of climate change and is committed to the Company’s transition to a clean energy future. The need to address climate change is growing more urgent year over year. In 2022, our procurement activities continued to support the clean energy transition while increasing our engagement with our suppliers and determining initiatives to drive progress in our supply chain.
Our Investments in a Clean Energy Future
In 2022, Supply Chain’s sustainability related investments in clean energy and grid modernization included the execution of $7 million in battery storage contracts, $41 million in energy efficiency and demand management contracts, $250 million in smart meter AMI contracts, and $44 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 continued to partner 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, over 40 of our suppliers completed sustainability assessments and developed measurable plans to improve their environmental performance in water and energy use, waste production and greenhouse gas emissions. We also engaged our suppliers about their sustainability-related commitments, and we monitor these commitments throughout the year to determine maturity.
Partnering with Our Industry Peers
The success of Supply Chain Sustainability requires collaboration across utilities and suppliers. Our transparency about our journey will strengthen our company and our supply chain. Con Edison is an active member of the Sustainable Supply Chain Alliance (SSCA). The SSCA is an electric utility industry organization comprised of major utilities and suppliers, working together to leverage supply chain best practices to improve sustainability. By working with the SSCA, we can share insights to help align industry efforts, promote collaboration, and contribute to the transition of a reformative net zero economy.
Creating an Ecosystem for Innovation and Opportunity
In our journey towards Supply Chain excellence, we have engaged in benchmarking with our industry peers and recognized corporate leaders in sustainability. As part of that effort, Supply Chain and Environmental Health & Safety (EH&S) partnered with Rutgers University to assess how Con Edison’s Supply Chain sustainability and corporate initiatives align to the United Nations’ 17 Sustainability Development Goals (SDGs). The project also included an assessment of how we compare to peer utility industries and other sector corporations.
The United Nations SDG framework is widely respected for action that has been embraced by leading corporations and 193 member states of the United Nations to address issues including ending extreme poverty, combatting inequality and injustice, and protecting the environment. The assessment found that Con Edison implemented sustainability initiatives that align with 12 of the 17 goals such as affordable and clean energy, sustainable cities and communities, and climate action. The assessment also provided insights related to areas of opportunities for our company to extend our commitments.
Supporting our Community
Our Supply Chain sustainability efforts work to address some equity challenges. We recognize Supplier Diversity as an opportunity to leverage the dollars we spend to spark economic growth within our service territory. In 2022, we demonstrated our commitment to Supplier Diversity through the purchase of $430 million from minority and women owned business enterprises (MWBE), and $616 million from small businesses. We are proud of our support of these businesses because they are a major driver for new job creation. To position diverse firms and workers for growth, we are continuing a collaboration that recruits diverse firms and low-income community residents for contract and employment opportunities in the growing field of clean energy.
Through our Green Energy Opportunities and Clean Energy Academy programs we have created an ecosystem of stakeholders that support Con Edison’s commitments to diversity and our vision for a clean energy future. The Clean Energy Academy is a partnership between our Energy Efficiency Program, Willdan Energy, the state of New York, and non-profit organizations, including the Fortune Society, Green City Force, and Non-traditional Employment for Women.
Through these collaborations we are leveraging 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 $23 million in contract opportunities for MWBE subcontractors. The Clean Energy Academy has provided training to over 500 (low-income**) New Yorkers in electrical and mechanical building systems, including lighting, HVAC, and refrigeration. We will continue to work with our partners to support and expand this program; in fact, the program has already secured $3.6 million to train more than 1500 students. Since the Clean Energy Academy has trained 500 participants to date, they have secured funding to train 1,000 additional participants over the next two years. This innovative initiative has helped us support our diversity goals while helping Con Edison achieve its goals to reduce energy use and associated costs for customers.
Business Ethics in Our Supply Chain
In support of our company’s commitment to sustainability, our Supply Chain organization engages with our suppliers to ensure they are reflective of our values and conduct their business ethically, with integrity, and in compliance with applicable laws and regulations.
Our values related to business ethics are defined in our Vendor Standards of Business Conduct (VSBC) which outlines the terms and expectations of behavior we have for our suppliers.
Under the terms of the VSBC, all suppliers are subject to review by our internal or external auditors, and any supplier 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, to further clarify the importance of human rights, fair labor practices, environmental management, and anti-corruption policies, Consolidated Edison Inc. (Con Edison) issued a Statement on Human Rights.
The VSBC and Statement on Human Rights affirm our commitment and set clear standards for suppliers who conduct business with Con Edison.