AEP Sustainability - Supplier Diversity

Supplier Diversity

AEP’s diversity and inclusion efforts extend beyond our workforce to the customers and communities we serve, including our supplier base. Small and diverse suppliers enable innovation, increase competition, improve savings and enhance the AEP brand. We want our pool of suppliers and business partners to align to the diversity of our communities by making it easier for diverse suppliers to do business with us.

The Supplier Diversity Program focuses on maximizing opportunities for diverse businesses, which include those owned by women, minorities (including Hispanic, African American, Asian American, and Native American), veterans, LGBTQ, HUBZone and service-disabled veterans. Our goal is to develop a pool of diverse, strategic suppliers and business partners that mirror the customers we serve, and we set a target of 13% diverse spend by 2023 [includes Tier 1 (prime) and Tier 2 (subcontractors) suppliers]. In 2019, we increased our diverse spend to 7.4% of the spend managed through Procurement.

We continue to improve our Tier 2 supplier program, which allows us to understand the impact of our diverse supplier spend through our direct suppliers. The Tier 2 program demonstrates the importance we place in understanding how our spend trickles down through our supply chain to affect the communities we serve.

In 2019, we updated our supplier terms and conditions in an effort to better inform and engage suppliers about our expectations. Suppliers must now adhere to standardized data collection and reporting practices. We also focused our efforts on increasing the number of qualified, diverse Tier 2 suppliers. One challenge we face is that many qualifying enterprises are small-scale operations, which are often unable to devote the resources necessary to become an AEP supplier. We will continue to work with our suppliers to develop new strategies around this issue moving forward.

In 2019, we began implementing a new supplier diversity champion program. Over the next year, we will educate and prepare these champions to create awareness of our supplier diversity goals both inside and out of our business.

AEP's Partnership With Connecting The Dots

Giving back to our communities is fundamental to AEP’s vision of powering a new and brighter future for our customers and communities. This includes working with small and diverse suppliers, such as King Business Interiors – a woman-owned, small business focused on environmental and community stewardship.

Darla King, chief executive officer of King Business Interiors.

Darla King, chief executive officer of King Business Interiors, created a gently used furniture bank called Connecting the Dots. The program works with 50 companies to collect the surplus of unwanted, slightly used furniture that they donate to 200 non-profit organizations across central Ohio. King recognized an opportunity to connect corporations like AEP with non-profits and start-ups, who were in need of free furniture. AEP has been in partnership with Connecting the Dots for 22 years.

AEP recently donated two floors of office furniture to Connecting the Dots after a remodel project. The donation supported Pilot Dogs, a non-profit organization that provides guide dogs to the legally blind. AEP’s donation helped Pilot Dogs furnish its newly expanded headquarters – allowing the organization to focus more on its mission and less on the financial burden of buying new furniture.

“Connecting the Dots enables organizations to spend their limited money on more important aspects of their business,” said King. “When new companies and charities are trying to grow, the last thing they need to spend money on is office furniture.”

In addition to helping nonprofits, Connecting the Dots is beneficial for the environment – giving used items a second purpose while reducing landfill waste and the need for natural resources to make new furniture.