Since 1978, Southern Company has championed supplier diversity and development. We seek small and diverse suppliers that offer quality, reliability and competitively priced services. By nurturing relationships with small and diverse suppliers, the Southern Company system broadens access to products and services while demonstrating commitment to economic inclusion. Supplier diversity also allows us to ensure that the best and widest possible supplier base is included in our purchasing decisions, spreads wealth and jobs throughout the communities we serve, and delivers the service and value our customers deserve. Today, Southern Company and its subsidiaries are committed to supplier diversity that reflects the diversity of our customer base and energizes our success. The purpose statement, values and guidelines for our Supplier Diversity Program can be found in our Powering our Success brochure.
Our Supplier Diversity Business Development Program (SDBDP) is Southern Company’s signature diverse supplier mentorship program. Launched in 2021, the SDBDP builds relationships between Southern Company system employees with buying authority and mentored suppliers, enabling these suppliers to increase awareness of opportunities at Southern Company while also giving purchasing employees wider supplier choices. One of the many businesses participating in the SDBDP, Milhouse Forestry, recently celebrated a new vegetation-management partnership with Georgia Power that is expected to create more than 100 local jobs. Selecting and helping to grow a Black-owned business in an industry where few minority-owned companies operate furthers the system’s commitment to increasing the business we do with diverse companies.
Our Second Tier Program has also made strides in creating opportunities for diverse suppliers. Through this program, Southern Company encourages prime suppliers to extend subcontracting opportunities to diverse suppliers. The expectation for any prime partner working with us is to commit at least 20% of their contract value with Southern Company to small and diverse firms with an emphasis on minority, veteran and female-owned suppliers. This commitment can be realized using reasonable efforts through direct and/or indirect spend with diverse and minority subcontractors. This program has added opportunities for minority businesses through companies we do not own or manage.
In 2021, spending with diverse suppliers was slightly below the targeted levels included in our annual incentive compensation program (93% supplier diversity goal payout based on 21.1% diverse spend for our Total Electric Companies1 and 41.3% diverse spend for Southern Company Gas).
1 Total Electric Companies is defined as Alabama Power, Georgia Power, Mississippi Power and Southern Nuclear.
The focus areas and commitments of Southern Company’s EIAP are as follows: