AEP’s diversity and inclusion efforts extend beyond our workforce to the customers and communities we serve, including our supplier base. Small and/or diverse suppliers enable innovation, increase competition, improve savings and enhance the AEP brand. We want our pool of suppliers and business partners to reflect the diversity of our communities by making it easier for diverse suppliers to do business with us. We are transforming our supplier diversity strategy into two main focus areas: the Small Business Program and the Supplier Diversity Program.
Small Business Program
Our Small Business Program focuses on maximizing opportunities for small business suppliers to provide goods and services to AEP. Goals are established and measured annually for all areas of small business concerns.
Supplier Diversity Program
The Supplier Diversity Program focuses on maximizing opportunities for diverse businesses, which include: Women-owned businesses; Minority-owned businesses, including Hispanic, African American, Asian, Native American; Veteran-owned businesses; LGBT; HUBZone; and Service-Disabled Veteran-owned businesses. We have set a goal to generate a pool of diverse strategic suppliers and business partners that mirror the customers we serve by reaching a 10 percent* diverse spend for Tier 1 (or prime) suppliers by 2023. Targets will be proportionally adjusted to include Tier 2 (subcontractors) information once data is collected.
We also established a Tier 2 program which allows us to understand the supplier diversity spend impact we are having through our direct suppliers. The Tier 2 program demonstrates the importance AEP is placing on further understanding how our spend impacts the communities we serve.
To support our supplier diversity efforts, our Supply Chain and Procurement team formed a multilevel governance council to focus on AEP’s procurement practices and commitment. This council is also part of our enterprisewide Diversity and Inclusion Advisory Council, which is responsible for ensuring that all diversity and inclusion goals, objectives and initiatives are integrated into corporate policies, processes and practices as a core element of our business mission.
We are proactively seeking opportunities to build relationships with diverse suppliers. We plan to connect with suppliers through industry and diversity events. We are also encouraging all suppliers to register with AEP in our supplier database. AEP’s supplier diversity team works with other teams across the enterprise to enable diverse suppliers to participate in the sourcing process with AEP.