Gun ShimSenior Director, Supply Chain

Green Supply Chain

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Why are we here today?

Safety SupplierDiversity

PeopleExcellence

Envt Excellence

ServiceExcellence

OperationalExcellence

CostExcellence

Strategy Development

SUPPLY CHAIN STRATEGIES – TIED TO COMPANY AND SHARED SERVICES PRIORITIES

The leading

utility in the United States

Delighted Customers

Customer Focus

• We act with integrity and communicate honestly and openly

• We are passionate about meeting our customers’needs and delivering for our shareholders

• We are accountable for all of our own actions: these include safety, protecting the environment, and supporting our communities

• We work together as a team and are committed to excellence and innovation

• We respect each other and celebrate our diversity

OUR VISION

OUR GOALS

OUR STRATEGIES

OUR VALUES

Energized EmployeesRewarded Shareholders

Environmental Leadership

Operational Excellence

GREEN SUPPLY CHAIN PROGRAM

3What is the Green Supply Chain Program?

• The Green Supply Chain Program will link up the company and our preferred suppliers to explore and engage in environmental supply chain

To work with our suppliers to adopt more environmental and sustainable business practices

To green PG&E’s internal supply chain and business operations

To reduce the adverse environmental impact of the company's purchasing decisions

• Green “CoOps” are the five main objectives for supplier participation in the Green Supply Chain Program

Commitment – to be more environmentally responsible

Outreach – to educate others about environmental responsibility

Operations – to reduce environmental impacts

Products and Sservices – to purchase or produce green

Supplier Collaboration – to engage in environmental partnerships

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Supplier Successes and InnovationAs a participant in the Green Supply Chain Program, suppliers are challenged to develop a collaborative innovative green project which ultimately helps PG&E and the supplier reduce the overall carbon footprint of the product or service purchased.

• Partnered with Service & Sales to conduct energy audit at Fong Brother’s facility

Saved 300+ kWh and $50K savings/yr

• Implemented green criteria in scorecard with Okonite to encourage green innovation

Redesigned cable for SF reliability project to prevent retrenching of 10 miles of road

• Sponsored McFarland Cascade through EPA’s GSN Lean and Clean Review

Saved over 2 million gallons of water by reusing for dust control

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• Awarded first Green Supplier of the Year award to Southwire

Converted 31% fleet to hybrid and reduced 95% lead additives from all products

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Integration, Lessons Learned & Employee Awareness

Proactive employee engagement ensures the success of the Green Supply Chain Program. By integrating employees into the Program, we are able to educate and create awareness around the changing environmental landscape relative to the utility supply chain.

• SourcingGreen evaluation criteria in RFPs

Supplier scorecards

• Supply Chain OperationsNew lighting retrofits at warehouses

• Line of Business Green ChampionsSustainable remediation

Removal of desktop printers

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Stakeholders and Customers

Examples of Initiatives with a Customer Focus

• 100% post-consumer-waste logos on PG&E business cards and stationary

• 13 million customer billing envelopes sent out monthly are now produced via Green-E certified wind-power and also contain a biodegradable window film

• Green Supply Chain Program highlighted on a one-page spread in the 2008 (and 2009) CRR report

The Green Supply Chain Program’s initiatives can now be recognized by our customers and other stakeholders through various channels of communication. These initiatives are examples of how PG&E is “walking the talk” when it comes to environmental leadership.

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Partnerships and RecognitionsOver the last two years, the Green Supply Chain Program has been recognized as a leader in the utility industry. Key initiatives from the Program illustrate PG&E’s proactive and innovative efforts to go above and beyond business expectations.

• Co-founded the Electric Utility Industry Sustainable Supply Chain AllianceLead an inter-utility category team to define and develop environmental best practices for utility wood poles

Partnered with EEI and EPA’s Green Suppliers Network

• Spoken and recognized at multiple utility and supply chain conferences across the nation in 2008 and 2009

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Green Supply Chain Program’s Five Year Strategy

The Green Supply Chain Program has laid out its five year strategy with the intent of becoming a best-in-class program across industries, creating a domino effect to influence PG&E’s employees, customers, suppliers and beyond.

2009

2010

2011

2012

2013

Monitor and quantify results of innovative green projects with suppliers

Track carbon footprint of specific utility products

Create database of suppliers who provide green utility products and services

Report carbon footprint of segments within the utility supply chain

To be recognized as a best-in-class Green Supply Chain Program across industriesGreen Supply

Chain Sustainable

Solutions

Recognized as a leading Green Supply Chain Program in the utility industry

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Q & A

Green Supply Chain Sustainable Solutions

Greensupplychain@pge.com