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ESG 2020 Annual Report

Community

Economic Development

SJI does more than contribute to the current economy—we work toward a sustainable future economy.

Economic Development

We’re committed to generating long-term value through operations, sustainable investments, mutually beneficial partnerships and innovative relationships.

During 2020 these efforts included: 

  • Disbursing more than $96.4 million in base salaries to our more than 1,100 employees
  • Paying in excess of $78 million in federal and state taxes *
  • Investing more than $750,000 in community support
  • Spending $486.5 million in capital expenditures
  • Purchasing more than $86 million of materials, services and equipment from minority, service-disabled veteran, women-owned businesses.
*Tax information for 2020 reflects data from Federal Energy Regulatory Commission (FERC) filings, previous ESG reports did not.

Capital Investments

The New Jersey Board of Public Utilities has approved several capital investment programs in the last ten years to modernize the South Jersey Gas and Elizabethtown Gas distribution systems.

These investments help us ensure our customers receive the service they expect and deserve.

The Accelerated Infrastructure Replacement Program (AIRP), currently in its second phase, targets the replacement of aging cast iron and bare steel South Jersey Gas distribution infrastructure to ensure system reliability, while also reducing greenhouse gas emissions. Through 2020, South Jersey Gas has replaced 804 miles of main and restored 40,700 services. As a result of AIRP and AIRP II, South Jersey Gas expects to replace all remaining bare steel and cast iron in its system by 2021.

Improvements to enhance South Jersey Gas system reliability and resiliency in coastal communities continued last year through the second phase of the Storm Hardening and Reliability Program
(SHARP). The first phase resulted in the replacement of 92 miles of main and the restoration of 11,090 services. Like the original initiative, SHARP II will further enhance and protect our infrastructure in advance of future significant weather events. Through 2020, SHARP II resulted in the installation of approximately 9,100 excess flow valves within the barrier island communities.

The Elizabethtown Gas Infrastructure Investment Program (IIP) – targeted at replacing vintage cast iron, bare steel, ductile iron, copper and vintage plastic mains and services – began on July 1, 2019. This $300 million, five-year program will replace approximately 250 miles of main. From 2019 through 2020, Elizabethtown Gas replaced 89.9 miles of main and restored 10,055 services.

SJI is a partner in the proposed PennEast Pipeline, a more than $1 billion project that will provide reliable and low-cost natural gas across New Jersey and Pennsylvania while reducing our region’s reliance on coal and oil. In turn, this critically important investment in our state’s energy future will contribute to reducing air emissions and will benefit the local job market by bringing more than 12,150 projected direct and indirect jobs to New Jersey and Pennsylvania.

Job Creation

SJI is focused on economic development in our region through the creation of jobs to support our growing business and strategic initiatives.

The SHARP II program, designed to enhance the South Jersey Gas system in coastal communities, will generate 413 jobs throughout its execution. In 2020, SJI created hundreds of jobs with infrastructure enhancement projects that included:
  • Absecon Island Loop (SHARP II) - $13.6 million project created 88 jobs
  • Ocean City Loop (SHARP II) - $6.7 million project created 44 jobs
  • New Century Pump Station - $36.1 million project created 235 jobs

 

Supplier Diversity

In 2020, SJI purchased approximately $86 million in materials, services and equipment from minority, veteran, service-disabled veteran and woman-owned businesses.

One of the cornerstones of SJI’s continued success is linked to our ability to grow with our suppliers. We believe that building a more diverse supplier base will support our commitment to the growth and economic advancement of the communities in which we do business. SJI recognizes the importance of supplier diversity as part of the sourcing process in order to provide opportunities for diverse businesses to participate as partners in the acquisition of goods and services. We also recognize that sourcing products and services from previously under-utilized suppliers helps to sustain and progressively transform a company's supply chain, thus quantitatively reflecting the demographics of the community in which it operates by recording transactions with diverse suppliers.

Our Approach
At SJI, the Supplier Diversity Program provides:

  • Opportunities to diverse, small or underutilized businesses.
  • Enhanced economic growth to these businesses in the communities in which SJI does business.
  • A focus on diversity within the business community, as well as within SJI.

SJI’s sourcing process strives to ensure equal and fair participation of suppliers in a competitive procurement process. We will invite diverse suppliers to participate in sourcing events such as requests for quotation (RFQ), requests for proposal (RFP) and/or requests for information (RFI).

Strengthening Supplier Relationships
SJI’s continued success depends on our ability to achieve business objectives. Our suppliers are integral to those objectives. SJI’s Supplier Diversity Program looks to expand relationships with business owned by women, minorities, veterans, service-disabled veteran and LGBTQ that provide competitive prices and services. We believe that building a more diverse supplier base will help us to better serve our customers and remain competitive.

Measuring Progress
In 2020, SJI reached the following milestones:

  • Procurement Services:  Encouraged business units to explore opportunities to include and utilize all classifications of diverse suppliers to compete for business and from whom to obtain goods and services whenever possible.
  • Department Managers:  All business unit managers initiated and explored opportunities to obtain goods and services from diverse suppliers,

Also in 2020, SJI spent $793 million on products in services, compared to $806 million spent in 2019. Highlights from 2020 included the following spending statistics:

  • Minority-Owned Business Enterprises: $3.9 million *
  • Woman-Owned Business Enterprises: $39.3 million
  • Veteran-Owned Business Enterprises: $44.3 million
  • Disabled Veteran-Owned Business Enterprises: $14.9 thousand
  • LGBTQ-Owned Business Enterprises: increased efforts for inclusion in 2021 across the utilities.
  *Minority Owned includes Asian-Indian, Asian-Pacific, Black, Hispanic and Native American.

 

Two-Year Supplier Diversity Trend

Supplier Diversity and Small Business Results: 2019 2020
SJI $2.6 $2.9
SJG $36.5 $35.3
ETG $48.3 $49.4
Category SJI SJG ETG
Minority-Owned Business Enterprise (MBE) $.8 $1.4 $1.6
Women-Owned Business Enterprise (WBE) $2.1 $6.9 $30.3
Veteran-Owned Business Enterprise (VBE) $0* $26.8 $17.4
Disabled Veteran-Owned Business Enterprise (DVBE) $0* $.1 $0*
*No spend in these categories
2021 Company Targets
SJI SJG ETG
2% 11% 27%
(1% or $5.5 million increase from 2020) (1% or $4 million increase from 2020) (2% or $4.2 million increase from 2020)


Non-Diverse Small Business

NA
*Initiating collection of SBE spend for capture and tracking in 2021.


2020 Supplier Diversity Spend

SJI SJG ETG
$2.9 $35.3 $49
(1% of total spend) (10% of total spend) (26% of total spend)

Looking Ahead

In addition to the many benefits of our Supplier Diversity Program, we will continue to grow our program and practice outreach and support for small and diverse businesses in the Tri-State area with an emphasis on New Jersey-based businesses and the communities they serve. To do this, we plan to do the following:

  • Support small and diverse businesses through continued awareness and focusing on opportunities for their business growth and inclusion into SJI.
  • Engage in providing business opportunities to subcontractors with our prime suppliers.
  • Provide executive and internal training initiatives to further function and process awareness for supplier diversity within the organization.
  • Increase advocacy through active outreach and defining qualifications for diverse businesses by providing resources on navigating the procurement process.
  • Participate in RFP’s and onboarding and engagement with business units across the companies.
  • Drive participation with Tier 2 supplier initiatives through regular engagement with category management and Primes.