Our Investments in a Clean Energy Future

In 2023, Supply Chain’s sustainability-related investments in clean energy and grid modernization included the following: $90 million toward the Brooklyn Clean Energy Hub, $36 million in energy efficiency and demand management contracts, $145 million in smart meter AMI contracts, and $15 million in electric vehicles and EV charging infrastructure contracts.

Con Edison invested $15 million in electric vehicles and EV charging infrastructure.

Supporting Sustainability Through Our Vendors

Our goal is to enhance business practices by minimizing our waste streams, reusing materials, and finding new recycling opportunities. We maintained our collaboration with our most critical materials suppliers to improve business processes by monitoring and lowering the environmental impacts associated with their energy consumption, waste, and effects on natural resources and transportation. We also regularly engaged suppliers and experts who are experienced in managing the environmental and social impacts of their supply chain to learn from them and improve our program.

In 2023, we expanded an initiative to refurbish and reuse obsolete furniture that would have previously been sent to landfill. Old office material was stripped to its structural core and then remanufactured; 216 workstations were purchased back by CECONY at a 20% cost savings. This project conserved 172,800 pounds of raw materials, prevented 59,616 pounds of landfill waste, avoided release of 152,280 pounds of CO2 into the environment, and had energy savings that could power over 2,000 homes for one day. This exemplifies our ongoing commitment to reduce landfill waste, reduce costs, and improve our carbon footprint. We are currently developing a green procurement policy to address process and product-related requirements. We are exploring additional opportunities to implement this circular economy model within our supply chain.

Con Edison is also committed to the downstream impact of our operations. Our Investment Recovery Program coordinates the sale and/or divestment of surplus, scrap, and end-of-life equipment and material as an essential component of our sustainability priorities. Investment recovery is also committed to finding solutions to mitigate supply chain disruptions. As such, we expanded contract services with a transformer remanufacturing supplier to help mitigate the risk of shortages of critical equipment that had been affected by long lead times on new material orders. Through this partnership, CECONY increased the total weight of transformers shipped to be remanufactured by 133% and increased the total amount of transformer oil reconditioned (i.e., reused) by 159% since 2022.

In 2023, we targeted 53 suppliers (representing 86% of 2022 spend) with an annual Environmental, Social, Governance (ESG) assessment, and achieved a 64% response rate. Our targeted suppliers represent our most critical suppliers, top spend, and greatest environmental impact. Our goal is to achieve a 90% response rate to our supplier sustainability assessment by 2025. The responses to the ESG assessment allow us to evaluate the environmental impact and collaborate with suppliers to understand and support the enhancement of their ESG performance in line with our company’s overall objectives and goals.

Partnering with Our Industry Peers

Cooperation from procurement, suppliers, advocates, and thought leaders is essential for supply chain sustainability to be effective. In 2023, Con Edison remained a member of the Sustainable Supply Chain Alliance (SSCA) and the Sustainable Purchasing Leadership Council (SPLC). The SSCA is a group of major utilities and suppliers in the electric utility industry, that collaborate to apply supply chain best practices to improve sustainability. The SPLC fosters collaboration with a global community and have a demonstrated history of creating and implementing successful sustainable purchasing strategies for companies and organizations, enabling their members to plan, execute, report, and influence markets to improve business resilience. The SSCA and SPLC support sustainable procurement and the transition to a net zero economy that transforms society.

Creating an Ecosystem for Innovation and Opportunity

The United Nations Sustainable Development Goals (SDG) framework is a well-regarded plan for action that has been adopted by prominent corporations and United Nations members to address issues such as eliminating extreme poverty, fighting inequality and injustice, and preserving the environment. In 2023, Supply Chain maintained sustainability initiatives that are consistent with SDG 11, 12, and 17 (covering Sustainable Cities and Communities, Responsible Consumption and Production, and Partnerships for the Goals, respectively).

In 2023, we invited our top 150 suppliers to join a five-part training series on greenhouse gas emissions led by the SSCA. We value transparency and keeping our suppliers aware of our shared responsibility is important to us.

Supporting Our Community Through Supplier Diversity

Our commitment to the community is demonstrated through our increasing spend with diverse suppliers. We recognize supplier diversity as an opportunity to leverage the dollars we spend to spark economic growth within our service territory. In 2023, we spent $569M with diverse suppliers and $702 million with small businesses, creating a positive impact on the communities we serve. Over the past 55 years, CECONY has developed a network of suppliers that contributes to a strong and sustainable business model where we can all thrive. We appreciate the collaboration and range of perspectives our partners bring, which leads to more impactful and innovative solutions for our customers.

Through our Green Energy Opportunities and Clean Energy Academy programs, we have created an ecosystem of stakeholders that support CECONY’s commitments to diversity and our vision for a clean energy future. The Clean Energy Academy is a partnership between our Customer Clean Energy Programs (formerly Energy Efficiency Programs), Willdan Energy Solutions, the New York State Energy Research & Development Authority (NYSERDA), and non-profit organizations including WeAct for Environmental Justice, the Fortune Society, Green City Force, and Non-traditional Employment for Women.

We are working with others to leverage energy efficiency projects paid for by CECONY to create contract opportunities for MWBE subcontractors and jobs for low-income New York City housing residents. So far, this program has created over $30 million in contract opportunities for MWBE subcontractors. The Clean Energy Academy has trained 437 New Yorkers from disadvantaged communities, and 288 from Priority Populations [of which 212 are from low-income households,] in electrical and mechanical building systems, such as lighting, HVAC, and refrigeration. We will continue to work with our partners to support and grow this program; in fact, the program has already secured $3.6 million to train more than 1,600 students. The Clean Energy Academy has trained 1,020 graduates so far and has obtained funding to train 640 more participants in the next year. This innovative initiative supports our diversity goals while helping Con Edison achieve its goals to lower energy use and associated costs for customers.

Supplier Diversity Expenditures MWBE / Small Business Spend ($millions)

$800

$600

$400

$200

2020

$322

$509

2021

$362

$582

2022

$430

$616

2023

$569

$702

• MWBE Spend
• Small Business Spend

Supply Chain Risk Management and Monitoring

In support of our company’s commitment to sustainability, our Supply Chain organization engages our suppliers so that they reflect our values and conduct their business ethically, with integrity, and in compliance with applicable laws and regulations. Con Edison views its suppliers as strategic partners and expects that all suppliers, their subcontractors, and employees conduct themselves in alignment with our corporate values. In 2023, Supply Chain modified its vendor qualification process to expand the number and types of risks evaluated, in line with third-party risk management principles. This includes evaluating sustainability risks and improving our ability to track and monitor non-compliance, sustainability metrics including external certifications (i.e., ISO 14001), and other trends among our suppliers. Currently, our Third-Party Risk Management (TPRM) program is focused on qualifying all new and existing vendors. An inherent risk questionnaire is completed internally, which determines the need for additional disclosures through due diligence questionnaires (DDQs) depending on the type of vendor and the potential for risk. Any indication of risk based on reported past events must be documented. The vendor must also prove that they have a mitigation strategy in place, including sufficient training, that lowers any related risk to an acceptable level. As we collect more data on our suppliers’ qualifications, programs, and external certifications, we intend to compile sustainability data that will illustrate the environmental and social responsibility and governance practices of our suppliers and inform our processes moving forward. This method for evaluating and tracking risk in our supply chain will help give us clarity and enhance our supplier performance. So far, we have completed sustainability DDQ reviews for 278 suppliers, confirming the supplier has a humans rights policy and a sustainability program in place or attestation to compliance with ours.

Business Ethics in Our Supply Chain

Con Edison requires all suppliers to attest to our Vendor Standards of Business Conduct (VSBC) that 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.

We uphold the value of human rights, fair labor practices, environmental management, and anti-corruption policies, as outlined in our 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. We prohibit suppliers and their subcontractors from using forced or child labor and any form of coercion or trafficking. Our standards comply with laws and business practices that require minimum living wages, non-discrimination, and other areas that protect the safety and human rights of workers.