National Grid, an international electricity and gas company, provides energy to customers in Great Britain and the northeastern United States. The company serves residential and business energy needs and is dedicated to being an industry leader. The company is always ready to tackle the challenges of developing sustainable energy solutions in a way that promotes economic growth. This is why National Grid has blended environmental sustainability and supply chain development including supplier diversity.

National Grid manages its supplier diversity program utilizing internal resources and has engaged CVM Solutions, Inc. to manage its Tier 2 program. The energy company engaged CVM, which specializes in managing the administrative tasks associated with supplier diversity programs including maintaining a supplier database, monitoring certification status, collecting and analyzing data and spend, providing a web portal for prime contractors to report Tier 2 spend and identifying where diversity spend can be increased. National Grid prime contractors accesses CVM sophisticated software through a web portal to report subcontracting spend. There’s an excellent reason why this path was chosen – it frees up management time to concentrate on integrating supplier diversity into the supply chain and strengthening its Tier 1 program while also fulfilling a commitment to environmental sustainability.

Starting with Supplier Diversity

The supplier diversity program was revamped in 2009, and the program has seen remarkable results. The company’s Supplier Diversity Policy focuses on reaching out to the community to create partnerships with diverse suppliers and then providing necessary training to build capacity and expand knowledge. In fiscal year 2010-2011, diverse spend was more than $600 million and $250 million was spent on Minority and Women Owned Businesses (MWBEs). The program also encourages its Tier 1 suppliers to award 10 percent or more of their contracts with National Grid to diverse suppliers. According to Ms. Carla Hunter Ramsey, the Director of Supplier Diversity for National Grid, the energy company spends approximately 10 percent of its procurement dollars with MWBEs and as much as 30 percent on all diverse suppliers including service-disabled veterans, small disadvantaged businesses and HubZone businesses.

National Grid has earned awards for its supplier diversity program including the “Best of the Best” for Supplier Diversity by the Black EOE Journal. The company partners with a wide array of organizations supporting supplier diversity including the American Association of Blacks in Energy, National Minority Supplier Development Council, U.S. Black Chamber of Commerce, Women Presidents Education Organization, Asian Women in Business and many others. To develop its supplier diversity program, the company became a founding partner of the New York City Mayor’s Corporate Alliance Program. Ultimately, the memberships in the numerous organizations are designed to help National Grid form the sustainable partnerships that bring value, but sustainability doesn’t end there

. Continuing with Environmental Sustainability

As an energy company assuming a leadership role, National Grid has chosen to integrate its supplier diversity program and its efforts to reduce greenhouse gases (GHG). Joining 49 other companies in the Carbon Disclosure Project (CDP) Supply Chain Program, National Grid asked key suppliers to participate in completing surveys that measure and quantify emissions related information.

The surveys have several purposes. First, they raise awareness of greenhouse gasses. Second, that awareness should convert to strategies to improve energy efficiencies within supplier organizations in areas like building heating and cooling, lighting and transportation. Third, reducing operational inefficiencies increases competitiveness and that benefits all suppliers but especially the smaller diverse businesses.

National Grid has committed to reducing its Scope 1 and 2 direct and indirect GHG emissions 45 percent by the year 2020 and 80 percent by the year 2050. In 2010, National Grid was the only energy utility to take part in a test of the GHG Protocol Corporate Value Chain (Scope 3) Accounting and Reporting Standard. Scope 3 emissions include indirect GHG emissions from sources not owned by National Grid but are related to the company’s operations. Scope 3 emissions would include electric transmission and distribution line losses, gas and electricity sold directly to customers, and goods and services including travel, waste disposal and wastewater treatment. Scope 3 emissions can also include vendor supply chains, once again connecting supplier diversity and sustainability.

National Grid has demonstrated success in supplier diversity. Assuming corporate social responsibility, the energy company has an impressive success record in developing supplier diversity. It’s the ability of the company to expand its supplier diversity program while increasing environmental sustainability that makes National Grid a star among stars.