Managing and Measuring Performance

We continue to be guided by five overarching corporate goals: public and employee safety, delighting customers, engaging employees, rewarding shareholders and environmental leadership. Taken together, these five goals provide the framework for our integrated approach to corporate sustainability. Our ultimate measure of success is becoming a company that our customers trust, like and want to do business with.

Integrating Our Approach

Like any organization, we are working to improve and strengthen our multi-year strategic planning to drive continuous operational improvement. We use a rigorous process designed to formulate clear multiyear goals and strategies; align resources; and ensure integration, consistency and continuity in our financial and operational plans. The process focuses first on our risks, which leads to a long-term strategy to mitigate these risks and identify our critical objectives, and then matches our strategies with resource planning—developing and implementing tactical plans and budgets on a corporate-wide basis.

Understanding the needs and expectations of our customers, employees and other stakeholders is crucial to this process. We continue to look to these groups for guidance on the priorities and practices that will enable PG&E to meet our stakeholders’ expectations sustainably in the years to come. As part of our efforts, we engage in an annual stakeholder feedback process facilitated by Ceres, a leading nonprofit focused on sustainability issues. This process gathers feedback from multiple stakeholder constituencies, including labor union representatives, customers, investors, environmental and community groups, and suppliers.

We also continue to rigorously benchmark our results and identify gaps in our performance so that we can understand where we can improve through best practices. Doing so has increasingly become part of the way we do business, and it is key to continuous improvement.

Employee-led initiatives throughout the business are also helping to integrate corporate sustainability priorities into our work. For example, the Grassroots Green Network is a group of employees from across different business units who actively engage with co-workers to reduce energy, water and waste, while our Employee Resource Groups (ERGs) provide an important link to diverse communities through volunteer service, mentoring and scholarship awards.

Our Values

  • 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

Creating Incentives

PG&E’s Short-Term Incentive Plan (STIP) reinforces PG&E’s sustainability commitment by rewarding eligible employees for achievement of goals that reflect our business performance. In 2013, we continued to tie compensation closely to safety—with public and workforce safety measures determining 40 percent of management’s annual at-risk performance-based pay. That makes safety the single largest driver for annual at-risk performance-based pay, with financial performance and customer service comprising the remaining 60 percent.

Short-Term Incentive Plan—Performance Measures
Measure 2013 Weight 2014 Weight
Safety1 40% 40%
Customer Satisfaction2 35% 35%
Financial3 25% 25%
  • 1 Based on four subcomponents: nuclear operations safety, electric operations safety, gas operations safety, and employee safety.
  • 2 Based on five metrics for 2013: the overall satisfaction of customers, as measured through a quarterly survey; how quickly gas asset information is entered into the Utility’s gas mapping system after gas construction is completed; the average duration of electricity outages; execution of our gas pipeline safety work index; and reductions of gas and electric dig-ins. In 2014, execution of our in-line inspection and upgrade index replaced reductions of gas and electric dig-ins.
  • 3 Based on PG&E Corporation’s earnings from operations.

For more details on the specific measures and targets for our 2013 and 2014 STIP, as well as our 2013 results, please see page 34 of the 2014 PG&E Corporation and Pacific Gas and Electric Company Joint Proxy Statement.

Governing Corporate Sustainability

PG&E’s sustainability commitment is well-aligned with—and mutually supported by—a number of California regulatory and public policy priorities. From support for energy efficiency and policies on supplier diversity to a wide range of environmental measures, such as renewable energy requirements and greenhouse gas reduction targets, California and its utilities work together to actively advance a broad sustainability agenda.

The Public Policy Committee of PG&E Corporation’s Board of Directors has primary oversight of corporate sustainability issues, such as environmental leadership and compliance, climate change, community investments and workforce development. This oversight includes an annual review of PG&E’s sustainability practices and performance. Other committees of the PG&E Corporation Board and the full PG&E Corporation and Utility Boards address other components of PG&E’s sustainability commitment, such as public and employee safety, investments to build a smarter grid and the pathways to increase our deliveries of renewable energy.

Within management, the Chief Sustainability Officer of Pacific Gas and Electric Company is responsible for developing and coordinating PG&E’s corporate sustainability initiatives and overseeing PG&E’s corporate sustainability reporting and measurement. This is done in coordination with other members of senior management responsible for functions such as supply chain management, environmental compliance and customer energy solutions.

Measuring and Communicating Our Progress

Holding ourselves accountable and reporting on our performance with transparency is essential and has been a hallmark of our approach since we began producing a formal corporate environmental report in the 1990s.

In this report, we share our progress on a set of Key Sustainability Indicators for which we set annual targets. We also share data on our performance across a wide range of environmental, social and economic measures. By reporting on a broad range of metrics and issues, the report illuminates where we are doing well, as well as where we are redoubling efforts to elevate our performance.

Our Sustainability Journey

Business

Safety

Customers

Employees

Economic Vitality

Environment

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