PG&E Corporation Sustainability and Governance Committee Charter
As of May 20, 2021
I. Authority and Purpose
This Charter specifies the scope of the responsibilities of the Sustainability and Governance Committee Charter (the "Committee") of the Board of Directors (the "Board") of PG&E Corporation (the "Corporation"), and the manner in which those responsibilities shall be performed, including its structure, processes and membership requirements. In its testimony and briefing submitted in connection with the California Public Utilities Commission's ("CPUC") Order Instituting Investigation regarding Pacific Gas and Electric Company's proposed Plan of Reorganization ("POR") filed pursuant to Chapter 11 of title 11 of the United States Code, and as set forth in the CPUC's decision in this proceeding (the "Decision"), Pacific Gas and Electric Company stated its intent to implement certain governance measures, including certain matters relating to this Committee.
In Decision 20-08-046, the CPUC required that members of the Board of Directors oversee climate adaptation planning for infrastructure, operations, and services.
The Committee shall consist of at least three directors, appointed by the Board and serving at the pleasure of the Board (and, as may be authorized from time to time, the Board of Directors of Pacific Gas and Electric Company), one of whom shall be appointed by the Board as the Committee's chair, and all of whom shall satisfy independence and qualification criteria established by the Board, as set forth in the Corporation's Corporate Governance Guidelines. Any directors appointed to the Committee from the Board of Directors of Pacific Gas and Electric Company are understood to be simultaneously serving in their capacity as members of such Board of Directors.
III. Duties and Responsibilities
The basic responsibilities of the Committee shall be to advise and assist the Board, the Board of Directors of Pacific Gas and Electric Company (the "Boards"), and the Board of Directors of any other subsidiary with non- employee directors with respect to the selection of directors and corporate governance matters, including the corporate governance principles and practices of the Corporation and Pacific Gas and Electric Company, and evaluating the performance and effectiveness of each of the Boards. In addition, the responsibilities of the Committee shall include oversight of environmental, social, political and public policy matters that are relevant to the Companies' activities, performance and strategic planning, including assessment and monitoring of the risks, strategies, policies and procedures, goals and opportunities related to sustainability and climate change and any reporting related to the foregoing. More specifically, the Committee shall:
Director Nomination and Election Matters
- Review and recommend for each Boards' approval, annually, the appropriate skills and characteristics required of Board members consistent with the requirements of the Decision (the Skills Matrix), and perform similar periodic reviews with the Boards of Directors of any other controlled subsidiary with non-employee directors.
- Review the qualifications of candidates for the Boards taking into account the Skills Matrix, in consultation with the Chairman of the Board and the Chief Executive Officer of the Corporation and in consultation with Pacific Gas and Electric Company's Chairman of the Board and Principal Executive Officer.
- (a) Review and recommend to the Boards for approval the nominees for election to the Boards which shall be selected from a list generated by an independent search firm retained by the Committee or the Boards. Such review and recommendation shall include review of candidates, if any, submitted by shareholders of the respective company to the independent search firms. Recommendations for candidates for election to the Boards shall be considered in the context of the current composition of the Boards and shall be consistent with skills and characteristics required of Board members approved by the respective Boards.
(b) Recommend to each of the Boards for approval the chairmanship, membership, including qualifications, appointment and removal, structure and operations (including the authority to delegate to subcommittees) and reporting to the applicable Board] of each committee of the Board of the Corporation, consistent with term limits specified in the Corporation's Corporate Governance Guidelines, after consultation with, as applicable, the Chairman of the Board and the Chief Executive Officer of the Corporation, or the Chairman of the Board and principal executive officer(s) of Pacific Gas and Electric Company. (c) Recommend to each of the Boards for approval a nominee for lead director of the applicable company. (d) Review the appropriateness of any director's nomination for re-election to the Boards if that director offers a resignation upon changing employment or the major responsibilities that the director held upon joining the Board and recommend action on the offered resignation to the Board. Board Evaluations.
- Oversee the process for evaluating and assessing the performance of each of the Boards, including any Board committees. This includes determining what the method of evaluation will be, conducting the evaluations, collecting and reviewing the results of any Board committees' evaluations, providing the results to the appropriate Board for consideration in that Board's evaluation and overseeing a mid-year check in on any actions taken as a result of the feedback received in the evaluation process.
Environmental, Social and Governance ("ESG") Matters
- Review significant ESG trends and issues which may affect the Companies' operations, and advise the Boards regarding plans and programs with respect thereto, including voluntary reporting of these matters
- Monitor stakeholder engagement and shareholder interest on ESG matters, including ratings and scores.
- Review the monitoring of ESG-related risks and opportunities, and controls over ESG-related metrics and reporting.
- Oversee community engagement, including but not limited to, environmental justice and community relations.
- Review the Corporation's policies and practices with respect to charitable and community service organizations and activities, and recommend to the Board for approval annual budgets for contributions by the Corporation to non-profit organizations.
- Review the Corporation's political contributions and direct and indirect lobbying activities and their alignment with ESG-related Corporation commitments and goals. Recommend for Board approval limits for political contributions to federal, state, and local candidates, measures, and initiatives. Recommend for Board approval limits for funding political action committees and other organizations that may engage in activities involving elections.
- Review matters of corporate governance, including the annual review of shareholder proposals, and make recommendations to the Boards on a periodic basis with respect to such matters, including with respect to inclusion in the Corporation and Utility's annual proxy statements.
- Report regularly to the Boards, as appropriate, on the Committee's deliberations and actions taken, and deliberations or actions taken by any formal subcommittees that may be established by the Committee.
- Develop and recommend to the Board and the Board of Directors of Pacific Gas and Electric Company a set of corporate governance guidelines applicable to each said company, review each company's corporate governance guidelines annually and recommend to the appropriate Board of Directors such changes as the Committee deems necessary or appropriate.
IV. Committee Resources
The Committee shall have the sole authority to retain and terminate any firm as it deems necessary or appropriate to assist the Committee in exercising its duties and responsibilities, including assisting the Committee in identifying director candidates, and to approve such firm's fees and other retention terms.
The Committee shall have the right to request and receive from the Board reasonable resources to assist it in exercising its duties and responsibilities.
V. Meetings and Other Duties
The Committee shall fix its own time and place of meetings and shall prescribe its own rules of procedure.
The Committee is authorized to establish one or more subcommittees vested with any authority held by the Committee, so long as such subcommittee is comprised solely of one or members of the Committee.
The Committee shall conduct an annual performance evaluation of the Committee and review and reassess the adequacy of this Charter of the Committee at least annually.
Unless otherwise designated by the Committee, the Corporate Secretary of this corporation, or an Assistant Corporate Secretary, shall serve as a secretary to the Committee.