Corporate Responsibility and Sustainability Report

PG&E’s Materiality Matrix

PG&E’s materiality assessment identified 18 issues. Every issue is material to PG&E’s long-term sustainability, regardless of its placement on the matrix.

• About the Process
• What We Learned
• Using the Results

Public Safety

Safe operations, accident prevention, and company management of the impacts of energy generation, transmission, and distribution on long-term public safety.

Highlighted items represent interconnected issues.

Rate Structure and Affordability

The ability of customers to afford services, and the fairness and transparency of rates.

Highlighted items represent interconnected issues.

Customer Engagement

Company actions to engage with customers regarding energy management (including energy efficiency), bills, safety, and overall company plans.

Highlighted items represent interconnected issues.

Customer Energy Management

Customer actions to engage in energy management solutions, including energy efficiency, demand response, and electric vehicle deployment.

Highlighted items represent interconnected issues.

Community and Economic Vitality

Contributions to local communities through business assets (e.g. job creation through supplier diversity) and civic engagement (e.g. philanthropy, disaster relief).

Highlighted items represent interconnected issues.

Non-Renewable Energy Supply

The company’s management and choices related to the portfolio of non-renewable sources used for energy supply, including large hydroelectric, natural gas, and nuclear energy.

Highlighted items represent interconnected issues.

Renewable Energy

The investments, infrastructure, and integration of renewable energy into the grid.

Highlighted items represent interconnected issues.

Distributed Generation

Distributed generation of power among customers and suppliers, and the associated rates, transmission, and impacts on the utility business model.

Highlighted items represent interconnected issues.

Enabling Technologies

Technologies that enable energy transformation including smart grid, energy storage, and electric vehicles, as well as tools for customer engagement and energy management.

Highlighted items represent interconnected issues.

Environmental Footprint Management

Effective management of the company’s environmental, supply chain, energy supply, facilities, and other operational impacts related to pollution, waste management, land use and habitat protection, and biodiversity.

Highlighted items represent interconnected issues.

GHG and Other Emissions

The reduction and management of air emissions including greenhouse gases, nitrogen oxides, sulfur oxides, and particulate emissions.

Highlighted items represent interconnected issues.

Water

Maintaining water quality and availability through company operations and ensuring the short- and long-term availability of water for other uses.

Highlighted items represent interconnected issues.

Infrastructure Reliability and Resilience

Managing and investing in reliable gas and electric infrastructure to provide consistent energy supply, balancing customer and investor interests, and preparing for earthquakes, wildfires, and future climate change impacts.

Highlighted items represent interconnected issues.

Cybersecurity and Data Protection

Effectively protecting customer data, computer systems, grid infrastructure, and facilities.

Highlighted items represent interconnected issues.

Workforce Safety

Ensuring the safety of PG&E employees and contractors.

Highlighted items represent interconnected issues.

Workforce Planning

Maintaining a workforce with the required size and skill profile amidst generational shifts.

Highlighted items represent interconnected issues.

Employee Engagement

Effective dialogue with employees and transparency around business goals and operations, labor relations, and diversity and inclusion.

Highlighted items represent interconnected issues.

Public Policy Engagement

Ensuring alignment of public policy advocacy with company values, as well as transparency around advocacy.

Highlighted items represent interconnected issues.

About the Process

The materiality assessment was conducted by SustainAbility, an independent third-party consultant, and followed a structured process:

• Researched the landscape: Interviewed nearly 40 internal and external stakeholders, reviewed PG&E and industry research and reports, and reviewed media articles and related information.
• Identified material issues: Identified 18 material issues for PG&E’s long-term sustainability.
• Developed a materiality matrix: Assessed each issue on two scales: business impact to PG&E (both risks and opportunities) and degree of stakeholder concern. Used this assessment to create a matrix of material topics. A key goal of the assessment was to identify interconnections between the issues.
• Validated the results: Discussed, validated and finalized the results including engagement with PG&E’s Utility Strategy Committee, which is comprised of senior leaders from across our lines of business. The committee affirmed that each issue, regardless of its placement on the matrix, was material to PG&E’s long-term sustainability.

What We Learned

The materiality assessment revealed numerous insights, including:

• Reinforced our focus on the basics of our business. The assessment showed that safety, reliability, affordability and customer engagement are top priorities both for PG&E and our external stakeholders.
• Showed interconnections among issues. For example, the assessment illustrated that enabling technologies—such as those related to the smart grid, energy storage, electric vehicles and customer energy usage data—present many opportunities for PG&E and are connected to issues ranging from customer engagement to renewable energy. This interconnectivity provided insight into how we might approach issues in a more integrated way.
• Highlighted the importance of emerging issues. For example, the assessment identified infrastructure resilience (including adapting to the effects of climate change) and water conservation and management as important issues. Both of these have garnered increasing attention across PG&E and our industry due to recent weather and drought conditions. PG&E continues to make progress on addressing both of these issues across its operations.
  
  Water’s importance to PG&E is notable in its many interconnections to other material issues, such as the reliability of our service. For example, PG&E’s active focus on the resilience of our extensive hydroelectric system is captured in the issue of Infrastructure Reliability and Resilience.

Using the Results

In the months since its development, the assessment and supporting analysis have been used in numerous ways, including as inputs to PG&E’s strategic planning process. They have also prompted modifications to our corporate sustainability reporting and focus, and will continue to inform our goals and strategies in the coming years.

However, we also understand that PG&E’s materiality matrix is a snapshot in time. We will refresh the assessment on a regular basis to capture other emerging risks and opportunities, inform PG&E’s strategic planning process and support our ongoing dialogue with external stakeholders.