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2019 Supplier Diversity Report Card

Posted on by Paul Goodman

Incremental Progress in a Swiftly Changing Landscape

Introduction

As our country tackles problems that disproportionately affect communities of color, from income and wealth inequality to climate change, we must face the origins of these challenges head-on. Historically, when public utilities contracted with outside suppliers, they did so using an “old-boy” network, which denied economic opportunity to businesses owned by people of color and by other historically marginalized groups.

Always on the cutting edge, California and many of the companies that operate here have long recognized that diversity is integral to good business, and that a diverse workforce and diverse procurement investment can help companies venture into new markets and increase shareholder value. Nowhere is this culture more apparent than in the groundbreaking supplier diversity efforts taken on by utility companies under the guiding principles of the California Public Utilities Commission’s General Order 156. The California Public Utilities Commission’s model for promoting supplier diversity in the industries it regulates has withstood the test of time and, when the policy is made a priority by the sitting commissioners, it has generated unprecedented results.

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Summary of Findings

California’s energy, telecommunications, and water companies remain at the forefront of supplier diversity achievements, with a “class average” well above their peers nationwide. However, there is still progress to be made. In 2018, figures reported by the companies to the California Public Utilities Commission show that:

  • Most companies improved their percentage of procurement dollars spent with Minority Business Enterprises in 2018. However, a broad gap remains between high performers and low performers.
  • The cable industry continues to neglect supplier diversity, with Comcast and Cox both receiving grades of F. Comcast’s contracting with minority suppliers dropped sharply this year.
  • With the exception of Verizon, Cox, and Sprint, the companies’ spending with African American Business Enterprises continued to be a challenge.
  • The companies’ spending on Asian American/Pacific Islander suppliers slipped.
  • While over two thirds of the companies saw improvement in their spending with Latino suppliers, overall spending with those suppliers was still unacceptably low.
  • The companies’ spending with Native American suppliers saw some improvement, with 50 percent of companies reporting increased spending.
  • The companies’ spending with women-owned suppliers stayed relatively flat in 2018, and the companies’ spending with minority women-owned suppliers remained markedly lower than spending with women-owned suppliers overall.
  • The companies’ spending on LGBT-owned suppliers saw some improvement, but still has a long way to go.
  • The companies’ spending with disabled veteran-owned suppliers continued to slip.

This year, three companies exceeded 30 percent procurement with minority-owned businesses. In addition to the overall strength of 2018’s results, companies spent a combined $39 billion with businesses owned by people of color, an $8 billion increase over 2017.

While these results are impressive, several companies report internal pressure to reduce or eliminate their supplier diversity programs. In the face of leadership changes, budget cuts, shifts in corporate strategy and other internal changes, the benefits of supplier diversity remain relevant and necessary in the 21st century global economy.

Companies that report strong support from executive leadership and concerted efforts to include diversity at all stages in the procurement process continue to show strong results. In particular, companies that embrace supplier diversity best practices demonstrate strong results in traditionally underutilized categories. These industry leaders show that strong performance and consistent progress are, in fact, possible and set a strong example for their reporting peers.

It is particularly encouraging that 2018 saw overall strong results at a time when the energy and communications industries underwent significant shifts in the landscape. Utilities have grappled with the emergence of more community choice aggregators online1 and serving customers, as well as more frequent, larger, and more devastating wildfires across the state; these changes in the energy landscape raise necessary questions about the electrical grid’s reliability, affordability, and resiliency. Wireline and wireless companies have experienced a shift from regulation at the federal level to regulation at the state level, which may result in those companies having to adjust their business models in response to state-level regulation. Despite these challenges, many of the companies in those industries maintained or increased their supplier diversity spending

About Our Report

The Greenlining Institute’s Supplier Diversity Report Card grades California’s energy, communications, and water companies based on the supplier diversity reports the companies file with the California Public Utilities Commission. Our rankings are based on performance and improvement: Grades are primarily determined by the companies’ percentage spending, with adjustments made for significant increases or decreases compared to the previous year. We break down spending by ethnic categories, as well as minority women-, disabled veteran-, and LGBT-owned suppliers. We make recommendations based on what we see in the numbers and what we hear from the companies themselves about their programs and practices. We advocate for supplier diversity because it creates economic gains on all sides: It promotes economic development in diverse communities, and by increasing competition and diversity in the supply chain, generates a better return on investment for companies that meaningfully engage in it.

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2019 Bank Board Diversity

Posted on by Rawan Elhalaby

Executive Summary

The Greenlining Institute regularly examines corporate executive board diversity.1 Our 2019 study zeroes in on the gender and racial makeup of bank executive boards, and occurs just as federal policymakers push for diversity in banking and financial inclusion, including the recent creation of a Subcommittee on Diversity and Inclusion within the U.S. House Committee on Financial Services and a June 2019 hearing on “Diversity in the Boardroom.”  Greenlining supports efforts in Congress to increase board diversity by requiring disclosure of corporate board demographics (H.R. 3279 and H.R. 1018) and identifying diverse board candidates (H.R. 281).

Our analysis of the 10 largest depository banks in California, defined by deposit market share, found that on average, people of color make up 30 percent of board composition, while making up over 67 percent of California’s population. Bank of the West topped the rankings with a board containing 75 percent people of color.

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Why Board Diversity at Banks Matters

When companies are intentional about creating diverse, equitable and inclusive work environments, they help to disrupt the income disparities that inform broader economic conditions in marginalized communities. For financial institutions in particular, the leadership should reflect the communities they serve in order to effectively build trust with consumers and make capital and financial services accessible. And ultimately, a diverse board improves an institution’s bottom line.3

Executive boards are the ultimate decision-makers in financial institutions and drive policies that trickle down to communities. Boards are accountable for the actions and behaviors of their institutions. In order to fight redlining and promote economic development in communities of color, boards need to reflect the diversity of the population they serve. In the United States, people of color make up 41.8 percent of the population. California’s population is more than 67 percent people of color.

Greenlining Standards for Equitable Bank Boards:

  • Consider the racial demographics of the United States as a benchmark for representation.
  • Consider the gender demographics of the United States as a benchmark for representation.
  • Include at least one person of color and one woman for consideration in board candidate searches.
  • Publicly disclose executive board members, disaggregating by race and gender.
  • We believe that executive boards of national banks that meet Greenlining’s standards for equity will be more likely to create equitable and inclusive policies and have a greater commitment to diverse communities.

Report Findings

Board diversity among California’s largest banks still has room for progress. Overall, the boards of the banks we analyzed fail to mirror the racial and gender diversity of California and most also fail to reflect the demographics of the United States overall. Although Bank of the West ranks highest, with 75 percent of its board made up of people of color, the majority of the banks we studied had fewer than 40 percent people of color on their boards and, on average, people of color made up 30 percent of board composition.

Strategies for Building Diverse Boards

Bank boards should reflect the diversity of California and the nation. We believe that the following strategies will lead to greater racial equity within banks and in their investments in communities. Diverse leadership will help banks understand and meet the needs of their diverse customer base and prioritize reinvestment in currently underrepresented communities.

  • Establish a commitment to diversity, equity and inclusion
  • Disclose board demographics and policies
  • Set goals for representation on boards
  • Expand qualifications for board members
  • Professional development of bank leadership

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Equitable Building Electrification: A Framework for Powering Resilient Communities

Posted on by Ashley Johnson

The momentum to usher in a new era of cleaner, healthier, all-electric new homes and buildings has gained steam in California. With more than 50 cities either considering or having passed measures to accelerate all-electric buildings, the gas industry is working overtime to stoke fear around building electrification. In partnership with the California’s Energy Efficiency for All Coalition, The Greenlining Institute studied the challenges and opportunities that building electrification presents for low-income communities – 70 percent of whom are renters  caught up in a housing and energy affordability crisis.

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Executive Summary:

Greenlining’s Equitable Building Electrification Framework addresses the opportunities and challenges that electrification presents for low-income communities – 70 percent of whom are renters. The framework finds that electrification can be a transformative force for low-income residents and it explains the steps the state must take to ensure that electrification helps close the clean energy gap in California and provides relief to millions of residents facing energy insecurity in the current system.

Electrification provides low-income communities access to major benefits such as cleaner air, healthier homes, good jobs and empowered workers, and greater access to affordable clean energy and energy efficiency to reduce monthly energy bills, while helping the state meet its climate goals, including a net-zero carbon economy and 100 percent clean electricity by 2045.

Meanwhile, the cost of safely maintaining California’s gas system is set to escalate dramatically in coming years as increasing infrastructure costs and safety upgrades combine with a decline in demand as the state transitions away from fossil fuels to hit its climate targets.

The result will be higher costs spread around fewer customers – leading to significantly higher gas bills and prompting those with the means to do so to move off the system for financial, health, and environmental reasons. As this trend continues, gas customers who face barriers to electrification will need assistance to move to cleaner electric appliances to help shield them from the rising cost of gas.

What Is Building Electrification?

Building electrification means eliminating use of fossil fuels for functions like heating and cooking and replacing gas appliances with alternatives that use electricity. In California, 25 percent of our greenhouse gas emissions come from the buildings we live and work in. As our electric grid gets steadily cleaner, building electrification can play a big role in fighting climate change.

Moreover, electrifying our homes has major health benefits. Burning gas releases nitrogen oxides and particulates, which can have serious health consequences.

Our Framework:

This five-step framework presents a start-to-finish recipe for how the current goals of building electrification can be aligned with producing healthy homes, creating high quality, local jobs that cannot be outsourced, and establishing stronger connections between everyday Californians and our climate change policies and goals.

  • Step 1: Assess the Communities’ Needs. This should include understanding barriers preventing community members from electrifying their homes, residents’ knowledge levels regarding building electrification, and their specific needs, wishes and concerns.
  • Step 2: Establish Community-Led Decision-Making. Rich community input and engagement strengthen the overall program design quality with stronger cultural competence, ensure local buy-in and investment, and deliver tangible local benefits rooted in the lived experiences of everyday people. Partner with community-based organizations to develop a decision-making process that ensures that decisions are based on community needs and priorities.
  • Step 3: Develop Metrics and a Plan for Tracking. Metrics should include both clean energy benefits like greenhouse gas reductions and community benefits such as local hires and residents’ ability to pay their energy bills without sacrificing other essential expenses.
  • Step 4: Ensure Funding and Program Leveraging. Current low-income energy programs often fail to deliver maximum benefits to all qualifying households due to short and unpredictable funding cycles, poor program design that inadequately reaches qualifying customers, or lack of coordination and integration with complementary programs.
  • Step 5: Improve Outcomes. Using the tracking and metrics plan described above, ensure that there is a continuous feedback loop to improve current and future programs’ reach and impact in ESJ communities. Consider adjustments to ensure the program reaches the people it seeks to reach and delivers the intended benefits. Together we can create the foundations needed for a just transition within the work to come on building electrification, but it will require deliberate and inclusive actions. This document can be used by anyone interested in solving problems with a fresh perspective, removing barriers to participation in the clean energy economy, and bringing communities together around shared goals.

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Making Equity Real in Climate Adaption and Community Resilience Policies and Programs: A Guidebook

Posted on by Greenlining

California is a leader in climate policy and has modeled an unprecedented statewide effort to fight climate change. However, climate change impacts do not affect all communities in the same way. Frontline communities including low-income communities, communities of color, indigenous peoples and tribal nations, and immigrant communities suffer first and worst from climate disasters. This is due to decades of underinvestment and unjust systems that have left these communities with disproportionately high costs for energy, transportation and basic necessities, limited access to public services, high levels of poverty and pollution, and outdated and weak critical infrastructure.

Climate change exacerbates these injustices that frontline communities face, making climate adaptation and community resilience essential priorities. Strategies to tackle climate change must prioritize the most impacted and least resourced communities. California must develop programs and policies that truly center social equity in climate adaptation efforts and uplift frontline communities so that they do not simply “bounce back” to the unjust status quo after climate disasters strike but are able to “bounce forward” as healthy, resilient and sustainable communities.

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PURPOSE

To prioritize the climate adaptation and community resilience needs of frontline communities and address the historical neglect they have experienced, California must move beyond embracing equity to making it real. This requires centering community needs and building social equity into the very fabric of policies and grant programs that focus on climate adaptation and resilience. To get there, this Guidebook offers policymakers a blueprint on how to operationalize equity in policies and grant programs.

FOUR STEPS TO MAKING EQUITY REAL

  1. Embed Equity in the Mission, Vision, & Values: Policies and grant programs should explicitly state a commitment to equity and specifically identify the vulnerable populations they seek to benefit. The effort must aim to create comprehensive climate strategies for communities that not only build the resilience of physical environments but address other health and economic injustices that climate impacts exacerbate.
  2. Build Equity into the Process: Processes should deeply engage community members so as to learn about their priorities, needs and challenges to adapting to climate impacts. The information gathered should inform the development and implementation of the policy or grant program.
  3. Ensure Equity Outcomes: The implementation of the policy or grant program must lead to equity outcomes that respond to community needs, reduce climate vulnerabilities, and increase community resilience. Outcomes can include improved public health and safety, workforce and economic development, and more.
  4. Measure & Analyze for Equity: Policies and grant programs should regularly evaluate their equity successes and challenges to improve the effort going forward.

Making Equity Real in Climate Adaptation and Community Resilience Policies and Programs:

Making Equity Real in Climate Adaption and Community Resilience Policies and Programs – A Guidebook.  The Guidebook provides specific recommendations on how to operationalize social equity in the goals, process, implementation and analysis of policies and grant programs focused on climate adaptation. The report includes examples from existing policies and grant programs to illustrate what the recommendations look like in practice. The Guidebook is intended for policymakers who develop policies (bills, executive orders, local measures) and agencies that develop grant programs. Communities and advocates may also use this Guidebook as a tool to assess how social equity shows up in climate adaptation and resilience proposals.

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Related Research from APEN:

Greenlining released this report jointly with a report from the Asian Pacific Environmental Network, “Mapping Resilience: A Blueprint for Thriving in the Face of Climate Disasters.” APEN’s work shows a path forward for identifying the people and regions most impacted by climate change. Taken together, the two reports can guide policymakers in identifying vulnerable communities and providing them the climate adaptation resources they need.

Making Equity Real in Mobility Pilots Toolkit

Posted on by Ashley Johnson

Equity is transforming the behaviors, institutions, and systems that disproportionately harm people of color. Equity means increasing access to power, redistributing and providing additional resources, and eliminating barriers to opportunity, in order to empower low-income communities of color to thrive and reach full potential.  Low-income people of color often face financial, technological, physical, or cultural, barriers to accessing shared mobility and transportation services (i.e. bikeshare, scooter share, Uber, carshare, etc.). When mobility projects are not implemented with equity in mind, they reinforce the inequalities baked into our systems and can often deepen those inequalities.

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Increasingly, equity is becoming mainstream in mobility. Yet this could turn into an empty promise without a clear strategy and understanding of how to put equity into action to achieve that promise. Equity is not just a commitment – it is a practice. Our Environmental Equity team has compiled a set of resources and tools intended to guide government agencies, companies, and other entities in the planning, development, implementation, and evaluation of equitable mobility projects.

Greenlining’s definition of equity is specific to racial equity, given the legacy of institutionalized racism by government. Our emphasis on race is not about excluding other marginalized groups. These equity approaches are intended to also be applicable to creating equitable outcomes for other groups such as the elderly and people with disabilities. This resource outlines four key tools to help guide teams on the various ways to embed equity during each phase of the process. The following is an overview of the four different documents included in the toolkit:

  1. Overview: 4 Steps to Making Equity Real

This document is an overview of the four steps needed to operationalize equity within a pilot project based on our report, “Mobility Equity Framework: How to Make Transportation Work for People.” The following documents provide supplementary information to complete these four steps in an equitable, inclusive, and culturally appropriate way.

 

  1. Equity Considerations

Before developing an equitable mobility pilot project, read these “Equity Considerations” and think about whether and how your mobility pilot addresses the questions. These considerations are a starting point to operationalizing equity within a pilot project and answering them will give you a baseline for how your project centers and embeds equity. Going through these considerations will also help you identify areas in your pilot concept that are strong in equity, and areas that need improvement. Keep this list of questions and your responses for reference as you complete the four steps to developing an equitable mobility project.

 

  1. Community Engagement Best Practices

This document outlines best practices on for meaningfully engaging and empowering communities at all stages of project development and deployment. It provides examples of community engagement activities and lists various cultural considerations to bear in mind when conducting community engagement.

 

  1. Mobility Pilot Project Worksheet

Once you read the previous documents, filling out this worksheet can help kickstart a list of specific activities and tasks to develop and deploy an equitable project. As needed, reference the other documents as you fill it out.

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Social Equity in California Climate Change Grants: Making the Promise Real

Posted on by Ashley Johnson

California offers a variety of climate change grants that aim to both fight climate change and also create a variety of other benefits. These grant programs can improve air quality and community health, reduce consumers’ energy bills and create clean economy jobs. But far too often these programs fail to adequately reach the communities with the greatest needs, especially low-income communities of color. For that reason, Greenlining believes officials designing these climate change grants must make a conscious, thoughtful effort to embed social equity into all aspects of each program and grant-making process.

A comparison of CalEnviroScreen maps showing the most polluted and economically disadvantaged communities with maps showing communities of color illustrates the literally toxic effects of redlining and its aftermath. A concerted effort to embed social equity into climate change grants can help put large amounts of funding to work relieving these historical inequities and level the playing field for historically disadvantaged communities.

In this report, we provide a roadmap for embedding social equity into climate change grants, focusing on four key steps:

  1. The program’s Goals, Vision and Values should explicitly state the social equity goals of the grant program to help ensure these goals get prioritized.
  2. The program’s process should include working with partners who have social equity expertise and incorporate strategies for inclusive outreach and technical assistance.
  3. The implementation of climate change grants is critical. Staff must make sure that grant awardees have the resources and tools they need to get the greatest possible environmental and economic benefits and minimize unintended negative consequences. Programs should target community-identified needs.
  4. Finally, programs should analyze their impact, based on clearly defined social equity goals and criteria track success. This requires proactive planning to collect the date needed, so that administrators and officials can use the analysis to improve the program going forward and inform the design of future climate change grants.

 

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Advancing Racial Equity in the City of Oakland’s Small Business Ecosystem

Posted on by Bruce Mirken

The City of Oakland released its 2018-2020 Economic Development Strategy with a strong focus on entrepreneurship to build wealth in local communities of color. To support the strategy’s desired racial equity outcomes, The Greenlining Institute founded the Small Business Advisory Group, a roundtable comprised of local small business leaders committed to advancing the needs of Oakland’s entrepreneurs of color. Members include technical assistance providers, community lenders, ethnic chambers, and small business advocates.

With the goal of fostering a healthy and more inclusive small business ecosystem that allows entrepreneurs of color to thrive, the Small Business Advisory Group has developed a menu of recommendations designed to help the city of Oakland achieve the ambitious racial equity and small business goals included in its 2018-2020 Economic Development Strategy. We hope these recommendations will be useful for Oakland Mayor Libby Schaaf, city councilmembers, the Economic and Workforce Development Department, and Oakland’s local business community, and offer our partnership for implementation. 

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Autonomous Vehicle Heaven or Hell? Creating a Transportation Revolution that Benefits All

Posted on by Greenlining

The rapid development of self-driving, autonomous vehicle technology is leading the way to a transportation revolution with three major components: self-driving cars, shared mobility, and electrification. While much has been written about how the coming autonomous vehicle revolution may change transportation for the better, this report represents the first in-depth analysis of a wide range of mobility, health, and economic implications of these three interconnected revolutions for marginalized groups like people of color, the poor, the elderly, and those with disabilities.

Greenlining’s analysis finds that optimistic scenarios for this transportation revolution – including reduced traffic, cleaner air and less space wasted on parking – won’t come true without action by government to ensure that implementation of these technologies recognizes their broad impacts, especially the needs of marginalized groups. A transportation revolution that truly benefits all will need to center on FAVES: fleets of autonomous vehicles that are electric and shared, with rules designed to disincentivize personal autonomous vehicles and to promote affordability and access, along with fair labor practices in this new industry. Without such intervention, the autonomous vehicle revolution could lead us to transportation hell, with a growing mobility divide between haves and have-nots.

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2018 Utility Supplier Diversity Update: Opening Doors for Entrepreneurs of Color

Posted on by Bruce Mirken

Supplier diversity helps direct corporate procurement to businesses owned by historically marginalized communities. This practice supports economic development and access to contracting opportunities for women, LGBT communities and communities of color, and is particularly important for entrepreneurs of color.

General Order 156 requires that utilities submit supplier diversity reports annually. Using these reports, we analyzed the 2017 supplier diversity of 18 utilities across the telecommunications (cable and telephone), energy, water and wireless industries. Overall, the percentage of procurement from diverse businesses remained virtually unchanged from outcomes reported last year in our Supplier Diversity Report Card. But a few stand-out companies achieved relatively high spending with diverse businesses.

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2017 Corporate Board Diversity: Major Players Fail to Reflect California’s Labor Force

Posted on by Greenlining

Corporate boards of directors set policy, hire and fire CEOs, and have a huge influence on company behavior and culture. We examined the corporate board diversity of 59 companies with a major presence in key sectors of California’s economy and found that they consistently fail to reflect the state’s diverse labor force. Women and people of color were consistently underrepresented and in some cases missing completely. When board diversity so badly fails to align with the labor force, companies can more easily make mistakes that alienate groups of customers and miss chances to make their corporate environments welcoming to diverse employees.

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