Welcome to the Pipeline!
Welcome to the latest edition of American Water's the Pipeline, a quarterly resource for all things water. We see this as one more way to stay connected.
A Note from Maureen Duffy
In the previous edition of the Pipeline, we began to explore the business practice of ESG, referring to a commitment by companies to use environmental, social responsibility, and governance fundamentals when employing business practices and evaluating investment opportunities. The last edition of the Pipeline highlighted best practices around environmental stewardship. This edition is devoted to examining the “S” component of ESG – social responsibility.
The “S” of ESG encompasses a wide range of activities that seek to improve relationships with internal stakeholders, like employees and business partners, as well as external stakeholders, including customers and the communities we serve.
As with environmental leadership, responsible social practices are an essential part of American Water’s culture, values and strategy. Read on to learn how our commitment to social responsibility impacts and shapes American Water and the wider business community.
Senior Vice President, Communications & External Affairs
Companies like American Water play many
roles in the communities we serve and society
at large. We not only deliver an essential
service to customers – we also employ
residents and give back to our communities by
way of donations, volunteer work, and
mentoring. American Water takes these roles
seriously as it strives to be a good and
impactful corporate citizen.
Most recently, these achievements were recognized via Newsweek’s list of America’s Most Responsible Companies 2023. Ranked No. 5 in the Energy and Utilities industry category, this recognition illustrates American Water’s continued commitment to the communities we are privileged to serve.
Much of this work is informed by notions of social responsibility –the “S” pillars of the ESG framework. Examples of American Water’s social efforts – and how they shape our corporate citizenship – are provided below.
In the context of ESG, social responsibility typically encompasses how a company addresses social trends, labor, and community engagement. Efforts include customer affordability, inclusion, diversity, and equity (ID &,E) programs, employee engagement, community relations, workplace safety, human rights commitments, workforce development, and ethical supply chain practices. In the water sector, social responsibility informs efforts related to addressing water equity, enhancing ID&E, and assuring adequate supplier diversity.
The National Association of Water Companies recently published five principles for water
equity. These detail the water industry’s commitment to improving water safety, reliability,
and affordability for all by supporting greater investment in marginalized communities and
developing partnerships to achieve those goals. American Water strongly supports these
principles and has taken many steps to put them into action. Our commitment to water
equity is best seen in our customer assistance program, H2O or Help to-Others, which
seeks to keep water flowing for low-income customers who qualify; our participation in the
federal Low-Income Household Water Assistance Program (LIHWAP), which has helped
thousands of American Water customers erase arrearages; and our longstanding
advocacy for policies that bolster water reliability, accessibility, quality, and affordability.
Furthermore, our employees annually contribute to Water for People, an international nonprofit organization dedicated to providing access to improved water and sanitation systems and services in developing countries. In 2022 alone, American Water and its employees raised $180,000 to support the organization.
Supplier Diversity Initiatives
American Water's commitment to supplier diversity is tangible. Over the past four years,
the company has increased its diverse supplier spend by 77 percent. These efforts not
only benefit the company – they also drive economic benefits for the suppliers, partners,
customers, and the communities we serve.
For example, American Water’s state subsidiary, Illinois American Water has a robust supplier diversity program that continues to expand across the state. Illinois American Water partnered with over 179 certified diverse suppliers, increasing its total diverse spend by 13 percent in 2021 with approximately $46 million spent with Illinois-based businesses.
In 2022, Maryland American Water was the first water utility in the state to voluntarily sign a Memorandum of Understanding (MOU) with the Maryland Public Service Commission committing the company to develop, implement, and report on activities that promote supplier diversity. The purpose of the MOU is to maximize opportunities for minority-owned businesses to compete for contracts and subcontracts with the company for goods and services.
American Water Charitable Foundation Contributions
In 2022, the American Water Charitable Foundatio n,
a 501(c)(3) nonprofit organization established by
American Water, awarded over $3.2 million to
communities through grants and the company's
Employee Matching Gift and Volunteer Program.
American Water regularly engages
with our stakeholders to better
understand their concerns, needs, and
expectations. Their feedback informs
policies, practices, and programs
across our organization.
This engagement occurs through the course of regulatory-facing engagements where, in 2022, American Water leadership participated in panels and discussion groups ranging from cybersecurity in the water industry, to infrastructure resiliency and the role we play in ensuring equity and affordability for all customers.
Additionally, American Water’s stakeholder engagement approach extends to seeking the perspectives of those outside the utility industry. Recent collaborative speaking engagements have included those with the Iowa League of Cities, Inclusion Allies Coalition, American Association of Blacks in Energy, and Chambers of Commerce in metropolitan areas across the U.S. These meaningful presentations and panels allowed American Water representatives to come away with a better understanding of the challenges faced by customers and communities across the country and our role in being a solutions provider through essential water and wastewater services.
American Water wants to be a source of information for you. Through active outreach and engagement with a variety of stakeholders, American Water has taken part in a great exchange of ideas, issues and insights about challenges and opportunities impacting the water and wastewater industry. Please reach out to us on any water or wastewater topic. Here are resources that provide background on the topics we covered:
- 2019-2020 American Water Sustainability Report
- ESG Data Summary
- 2022 Proxy Statement
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