Issue:  Vol. 48 / No. 8 / 22 February 2018

Report grades CA utilities on LGBT contracts


GGBA's Paul Pendergast
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California's major utility, telecommunications, and water companies spent $41 million with LGBT-owned firms in 2016, according to an annual report that grades the diversity of each company's supply chain. Yet the figure is a pittance of the total $32.24 billion the companies spent last year with diverse business enterprises, including those owned by minorities, women, and disabled veterans.

While LGBT business advocates said the amount was a good start, they would like to see the total amount spent with LGBT-owned firms triple by 2018.

"Forty-one million dollars is now being spent with LGBT-owned firms where it wasn't before and that is a positive thing, a great thing. But at 0.13 percent of the total, that is not even 1 percent, so it shows we have a long way to go," said Paul Pendergast, vice president for public policy at the Golden Gate Business Association. "This is a marathon and not a sprint."

The Bay Area LGBT chamber of commerce co-sponsored state legislation that took effect in 2015 and added LGBT-owned firms to the Supplier Diversity Program administered by the California Public Utilities Commission. Gay former Assemblyman Rich Gordon authored the bill, AB 1678, and 2016 marked the first time that the companies had to report figures for their contracting with LGBT firms.

Thus, the Greenlining Institute's latest Supplier Diversity Report Card, being released Thursday (October 5), marks the first time that the companies have received either passing or failing grades based on the amount of money they have awarded to contractors certified as LGBT business enterprises, meaning that an LGBT individual is a majority owner of the firm.

The utilities are not required to contract with the 105 LGBT-owned businesses listed in the CPUC's Supplier Clearinghouse of firms certified to take part in the program. But they are encouraged to make "good faith efforts" to do so, notes the report. It grades the top 19 companies in terms of spending based on the CPUC data.

"Overall, obviously, with LGBT firms there is still a lot of untapped opportunity in that market," Danielle Beavers, a co-author of the report and the think tank's diversity and inclusion director, told the Bay Area Reporter in a phone interview. "If you look at some of the other communities, we have seen a steady rise in contracts with minority- and women-owned firms. I am excited to see where LGBT-owned firms will be three, five, 10 years from now."

The spending data is not broken down based on if the contracts were given to gay-, lesbian-, bisexual-, or transgender-owned firms, something Beavers, who is straight, would like to see be done in the future. The majority of the firms in the report, at 10, received passing grades of a C- or higher in terms of their total LGBT contracts.

For example, T-Mobile received an A for spending $10.98 million with LGBT firms even though its overall score was a D for awarding $537.48 million to diverse firms; while Sprint earned an A- for its $1.05 million in contracts with LGBT firms and an overall B grade for its $496.78 million in contracts with all diverse firms.

San Diego Gas and Electric had an overall score of A for spending $619.80 million with diverse business enterprises but a C for awarding $937.51K to LGBT-owned firms. Southern California Edison also earned an overall A score ($1.69 billion) but a C- for its LGBT contracts ($1.11 million).

The remaining nine companies received grades of D or F in the LGBT category. The San Francisco-based Pacific Gas and Electric Company, for example, received an overall grade of A for awarding $2.85 billion in contracts to diverse suppliers last year but only a D for awarding $1.24 million to LGBT firms.

The Southern California Gas Company had a total grade of B ($672.46 million) but an F in the LGBT category ($50.34K).

In a statement to the B.AR., PG&E director of supply chain responsibility Joan Kerr noted that the electric company was "the first California utility to include LGBT enterprises in our supplier diversity program. From our experience in building business opportunities with other diverse enterprises, we know the outreach, training and matchmaking work we're doing with the LGBT community will eventually yield results."

As a member of local and national LGBT chambers of commerce, the company holds workshops to educate and encourage LGBT firms to do business with it, added Kerr.

"This past year, we've matched at least one LGBT supplier directly to each of our key departments for targeted introductions. While it's been a challenge to increase our LGBT supplier base, we won't stop because supporting diversity will help us build a better California," stated Kerr.

Beavers expects the companies' LGBT scores to improve in future reports now that they are being graded on their LGBT contracting efforts.

"What is great about it is people behave differently when they are being watched," she said of the reporting requirement.

To download the full 53-page report, which includes responses from the companies it graded, visit

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