Committing to Diversity in the Energy Industry

Diversity is an ongoing challenge in many industries, and energy is no different. Greentech Media cited a survey by Ernst & Young that said women represent 16% of board members in the global power and utilities sector in 2015, and that number has only increased 1% over three years. According to the Department of Energy, only 8% of employees in the U.S. wind industry are African-American.  But, businesses are making strides every day to decrease this wide gap.

Many of Nexant’s energy projects involve diverse subcontractors that are minority, women, or disabled veteran-owned. In California, one team is working on an income-qualified energy savings assistance program in cooperation with several diverse companies. Kevin Simmons, based in our San Francisco office, provided some thoughts on how diversity has affected the energy industry. “We know that diversity in any industry is valuable, as diversity tends to foster creativity and, by encouraging multiple perspectives, makes for better problem-solving. We're fortunate to have a great team of people in San Francisco (including women, minorities, LGBT, etc.) who bring to the table different life experiences and approaches to solving problems, and I believe this makes us more competitive.”

One of our frequent subcontractors, Research into Action, is a woman-owned business entity (WBE) and recently illustrated some of their challenges within the industry. “Being a woman-owned business in the energy industry is uncommon, but not rare. There are very few set asides in energy work, and where they exist other diverse and disadvantaged businesses get preferences rather than WBEs,” explained President Jane Peters.

Another diverse partner, SEEL, Inc., added that having excellent operational capabilities allows them to compete. “Being a certified Minority Business Entity (MBE) as well as a Service Disabled Veteran Owned Business (SDVOB) has given our partners and clients the benefit of working with such a great operator who happens to also be a diverse business,” said E’Lois Thomas, Chief Administrative Officer.

Additionally, in our Energy and Customer Program Solutions group, Nexant is happy to support Commonwealth Edison (ComEd) in their goal to drive diverse participation in the ComEd® Energy Efficiency Program by committing to put 40% of the small business offering incentives back into the hands of our diverse Trade Ally partners. The Small Business Offering is an incentive-based program, run through a trade ally network, for private businesses having a monthly peak demand level of less than 100 kW. Trade allies are qualifed, pre-approved contractors that assess energy efficiency options and costs, manage incentive processing, and implement serivices. 

We cooperate with more than 100 diverse businesses, and we’re always looking to increase that number. Expanding the diversity of the energy is not only the right thing to do for equality—it’s also good for business.  Ernst & Young cites overwhelming evidence from Reuters to Universities to McKinsey that shows (not specific to the energy sector) “a direct correlation between women in the boardroom and improved financial performance.” Their look at gender-diverse utilities found similar results as well:

"For the second year running, [2016], we compared the ROE for the top 20 most gender-diverse utilities with the bottom 20. We found that the top group (8.32% ROE) outperformed the bottom group (7.25% ROE) by 15%. Given that utilities are so asset-heavy, this difference in ROE is significant as it could result in millions less in profit."

To support diversity in the energy industry and inspire future generations of leaders and innovators, we suggest the following:

• Make it a priority to work with diverse partners and subcontractors
• Encourage women and diverse employees to mentor
• Employee involvement in and contributions to diversity is important at all levels of the company
• Take actions and lead beyond lip service
• Actively seek out different viewpoints and articles by diverse authors
• Commit to continuous improvement and education opportunities about the values of diversity

You’re already on the right path by reading this article.  Join the conversation with us on twitter @Nexant_Utility for our Utility Services or @_Nexant for Energy & Chemicals Advisory.