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DEI: More than Lip Service

Posted to AESP in the Energy Efficiency Group

 

This article is republished from the December 2020 issue of Strategies, AESP’s exclusive magazine for members. To receive Strategies, please consider joining AESP.

DEI: More than Lip Service

By Karen Germain and Quinn Parker

Diversity, equity, and inclusion (DEI) in the business world seemed to be off to a good start in 2020. Then, in the aftermath of George Floyd’s death in May, employers across the country made public statements proclaiming their commitment to diversity and inclusion in their workforce and community engagement. While some organizations took their first steps into creating active diversity and inclusion activities, other organizations emphasized their already existing programs and financial commitments. In both cases, the organizations involved were making efforts to be seen standing with and representing those communities which they serve, whether they be local, state or nationally oriented.

Statements spoke of social justice, racial representation, and declarations of investment in initiatives to educate, fast track and facilitate engagement with minority citizens, communities, and organizations.  However positive that may sound, the reality is that 2020 showed a mixed outcome regarding business’ commitment to diversity and inclusion. 

 
The data shows that prior to the death of George Floyd, businesses had been fickle in committing to diversity and inclusion Since then, the picture is murkier. We saw organizations recognizing gaps within their workforce which supported a flood of new job postings or organizations committing to supporting underserved communities, specifically people of color.

The Rise of the Diversity Professional

New DEI-related job postings held their own for the first three months of the year – a steady stream of postings at a variety of levels. However, as COVID-19 took hold in late March, new DEI job postings fell twice as fast as other roles. According to the Washington Post (July 15, 2020), DEI job postings dropped nearly 60% between March and June.  By comparison, human resource roles fell by 49% and jobs overall fell by 28%, leading some to question how truly committed the business sector was to DEI.  Were DEI roles only sustainable when the economy was thriving? Were they simply “nice to have” additions or are they strategic commitments interwoven into the fabric of a business?

The good news is that, in recent months, the roles posted have shown an upward trend with 123% growth between May and September 2020, according to Indeed and over the last five years they have grown by 71% as cited by LinkedIn. The ongoing dialogue both in business and society at large has seemingly spurred an expanded footprint within organizations – with an increase of Chief Diversity Officer positions and vice presidencies. Indicators are that there are an increasing number of DEI roles at the C-suite level or reporting to the CEO. LinkedIn states that growth in key diversity roles over the last five years has been definitive: Head of Diversity (107%), Director of Diversity (75%), and Chief Diversity officer (68%).

In a recent survey, McKinsey stated that two out of five companies that participated in their survey have increased budgets for gender, race/ethnicity, and/or LGBTQ+ initiatives over the past six months. This survey interviewed 1,122 executives and 2,656 employees across 11 countries  (from “Diverse employees are struggling the most during COVID-19—here’s how companies can respond,” McKinsey, November 17, 2020). While the article delves into the impact of COVID-19 on diverse employees, it was designed and initiated pre-COVID and gets to the heart of both business and employee behavior and is an important read.

The Commitment to the Underserved

While the DEI employment patterns are well documented in publicly available research, it was difficult to find ongoing or substantive research into energy efficiency as a sector and its investment or growth-based initiatives to DEI. Though many energy organizations have made public statements about their commitment to Diversity, Equity, and Inclusion, only a subset of these organizations are taking public action. This lack of public communication isn’t necessarily an indication that organizations aren’t doing good work; for many, it is just happening behind the scenes. In fact, we know from our interviews, secondary research, and anecdotal evidence that there is a commitment to an energy future that is diverse, equitable and that creates a sense of belonging. However, to reach these challenging goals, addressing diversity issues within our industry has to be transparent and measured. Transparency is critical to fuel the momentum, and “If you can’t measure it, you can’t improve it.” We need to share lessons learned and integrate DEI when designing, implementing, and evaluating energy efficiency programs.

Here are a few examples of energy organizations doing great work, being transparent, and providing leadership to the community.  

The New York Power Authority (NYPA) partnered with the American Association of Blacks in Energy to develop a 10-point plan with actionable strategies to address racism, biases, inequities and exclusion.   Southern Company and Dominion Energy have donated to or started initiatives for historically Black Colleges and Universities (HBCUs) valuing $50M and $35M, respectively. The desire to support DEI initiatives doesn’t just apply to municipalities and investor-owned utilities, program administrators and cooperatives are also making a commitment to diversity. Roanoke Electric, a cooperative utility which is owned by its members, feels that it is critical to provide equitable economic opportunities, which includes efficiency programs and access to smart technologies.  Energy Trust of Oregon (ETO), a program administrator,  has committed to increasing participation in underserved populations in energy efficiency and renewable energy programs by 20% by 2020.  ETO publicly stated their goals and evaluated their process to achievement in August 2020. The challenges they are facing aren’t unique and their methods to address inequality in energy efficiency programs are transferable. But the most important and most often missing aspect of truly understanding program efficacy is data. ETO collected baseline data, understood that their programs were not representing people of color, people with low incomes and rural people, and decided to measure their progress with clear goals.

DEI and DSM

The energy industry has acknowledged that there are inequities within the industry and that there is work to be done. But this doesn’t answer the question that many in our industry ask themselves, how does DEI impact DSM? We all can agree that regulated utilities have an obligation to serve. They have an obligation to provide services that are reliable and safe. Energy efficiency and conservation programs are oftentimes required through legislative or regulatory mandates and result in utilities being able to defer or eliminate capital investments. But does the principle of “obligation to serve” apply to energy efficiency programs? Are utilities obligated to make sure all customers can equally benefit from the programs or are they obligated to deliver as efficiently as possible at the lowest possible cost?

We think the answer to this question is evolving and is reflected in an increasing number stipulated cost-benefit ratios for programs with high societal benefits, the inclusion of non-energy benefits in cost-effectiveness tests and the regulatory or legislative requirements to implement low-income programs. Our industry is coming to the conclusion that supporting our most vulnerable populations isn’t just the right thing to do but falls under the “obligation to serve” requirement. Most customers pay for these programs through rates and even if the initial upfront cost is high the long-term benefits make energy efficiency a valuable investment. While the utility is operating with guidance from regulators and funding through customer rates to include underserved populations, popular compensation structures for suppliers delivering these programs still place too much emphasis on resource acquisition. Pay-for-performance implementation contracts, based on energy savings are a poor motivator for diversity and in fact, likely have negatively impacted DEI initiatives.

What Can You Do?

If we think about what is a critical next step for utilities to start to tackle these issues, it would be understanding the customer. Do some research, understand your market and understand your equity baseline. No organization can set realistic and actionable goals if there is a lack of data and understanding of current conditions. Ask yourself the question, do you know the cultural, racial or ethnic profile of your customers and community partners? If not, why not? Take that first step, collect the data and if you are already collecting it, use it to rethink how you define success.

Once you know your baseline and set realistic goals, include DEI in your supplier contracts. Be thoughtful that these goals don’t conflict but support resource acquisition goals. These underserved populations represent a demographic that also needs the products and services offered through energy efficiency programs; as an industry we need to get more creative in how we market, sell and provide support to these communities. Let’s stop calling these communities hard-to-reach and recognize that they may just require a different outreach approach. Michael Colgrove, the Executive Director at ETO, said it well “It’s our responsibility to design programs so that all customers can directly benefit from Energy Trust’s services and incentives. That means everyone, including low-income residents and communities of color, who often bear the greatest energy burdens.”

Finally, it is okay to let the world know what you are doing. Transparency and measurement are the foundation of our industry.  Perhaps it is time energy organizations began publishing DEI efforts such as hiring diversity consultants, partnering with diverse suppliers, and making a conscious effort to support diversity within your workforce and the communities you serve.  

AESP has made a commitment to educate energy professionals on Diversity, Equity and Inclusion issues. There are several sessions on the Annual Conference AGENDA.

Session 2D: Cross-Cutting Session: In Search for Equity: Understanding and Serving ALL Our Customers
Moderated by Marie Abdou, National Grid
Laura Schauer, ILLUME Advising; Tracy Dyke-Redmond, Eversource; Nate Gillespie, Pepco Holdings; Hilary Polis, Opinion Dynamics

Session 3A: Understanding the WHY? Diversity, Equity, Inclusion and Energy: A Panel Discussion
Moderated by Quinn Parker, EMI Consulting
Brandy Brown, MI Climate & Energy; Pam Fann, SEEA; Carla Walker Miller, Walker Miller Energy; Sabrina Brooks, PECO

Session 7D: Hold up the Mirror: What Utilities Want you to Know about Diversity: A Panel Discussion
Moderated by Karen Germain, the Germain Partnership
Sabrina Brooks, PECO; Karin Cozzi, DTE; Natalie Irwin, Efficiency Canada; Shonte Davidson, Eversource

Karen Germain is the founder at The Germain Partnership, a company that specializes in engagement and outreach in the energy sector. She has 30 years’ experience working in B2B and B2C both in the United States and the UK. Karen is co-vice chair of the Marketing Topic Committee.

Quinn Parker has over 14 years of experience in the energy industry and is currently a Director at EMI Consulting, a strategic consulting firm providing energy industry research and analysis. She is a Certified Diversity Professional (CDP) and holds a Lean Six Sigma Green Belt.

 

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