2008 Corporate Responsibility Report

How we are creating a smarter foundation for a sustainable future

About the Report

Publishing an annual Corporate Responsibility Report allows us to share with our stakeholders the progress we are making and steps we are taking to make positive contributions to the quality of life in the areas where we live and work—as well as to share where our efforts have fallen short. PG&E began producing an environmental report in the 1990s, and broadened the scope to our first Corporate Responsibility Report for calender year 2003. This 2008 Corporate Responsibility Report provides information on performance metrics and activities occurring in calendar year 2008, except when otherwise noted.

Stakeholder Engagement

As part of PG&E’s membership in Ceres, we made an executive-level commitment to improve our environmental and social performance by engaging with environmental groups, investors and other stakeholders. Ceres is a national network of investors, environmental organizations and other public-interest groups working with companies and investors to address sustainability challenges such as global climate change.

In developing and writing this report, PG&E engaged with Ceres and an independent group of individuals representing a range of constituencies that have expertise in environmental, social, labor and governance issues. In reviewing plans for this report, the Ceres stakeholder team considered whether the company adequately reported on its sustainability performance and key impacts, including goals, targets, systems, data and initiatives. Through this review process, the team provided extensive feedback to PG&E on our report, encouraging more discussion of our challenges, as well as specific issues such as impacts related to the economic downturn, global climate change and regional water scarcity. This important feedback informed the preparation of the final version of this report.

Additionally, PG&E engages with external stakeholders on a regular basis to stay abreast of the issues facing the communities we serve and to be a constructive voice in developing solutions. With a vast number and diverse array of external stakeholders, PG&E’s stakeholder engagement strategy is multi-faceted. Some examples include encouraging all of our officers and certain key non-officer personnel to serve on the boards of directors of non-profit organizations; participating in numerous multi-party coalitions and working groups, such as the California Environmental Dialogue, the Silicon Valley Leadership Group and the California Utilities Diversity Council; leading issue-specific stakeholder feedback groups, such as the ClimateSmart™ External Advisory Group and the Energy Procurement Review Group; and proactively soliciting input from our stakeholders in a variety of less formal venues. In addition, because so much of what PG&E does is regulated by state and federal agencies, we are engaged in multi-stakeholder public processes convened by those agencies.

Defining Key Issues

PG&E took a multi-faceted approach to identifying the key issues for this report. In preparing the report, we drew upon the feedback from the stakeholder review process facilitated by Ceres. We also engaged a wide network of employees at many different levels to identify and provide substantive input and feedback on the key issues. Our thinking was also informed by the key accomplishments and challenges addressed at an annual meeting of PG&E’s leadership team, coordinating with the issues identified in the company’s annual report to shareholders and taking into consideration dialogue within the Public Policy Committee of the PG&E Corporation Board of Directors, which focused on a review of last year’s report and a discussion of the company’s key priorities and issues.

How to Provide Feedback and Learn More

The complete report and summary brochure are available for review. Stakeholders can contact us to solicit additional information and offer comments and suggestions on this and future reports. Stakeholders can also visit www.pge.com for tips to improve the energy efficiency of their homes and businesses and reduce their carbon footprint, including participating in our ClimateSmart program.

The complete report was distributed to all PG&E employees, as well as key stakeholders, such as investors, public officials, non-profit leaders, interested companies and customers. A summary version was also printed and distributed as a complementary resource.