Our Approach
As an energy provider for 16 million Californians, we face choices every day with environmental, social and economic dimensions—and the decisions we make can have a profound impact. For PG&E, sustainability means striking the right balance in those decisions so that we achieve our goals of providing safe, reliable, affordable and clean energy—today and into the future.
To guide these decisions, we have adopted a revitalized Mission, Vision and Culture framework, developed through extensive outreach and interactions with our employees, customers and other stakeholders. Importantly, it places a sustainable energy future at the center as our North Star.
Governance
At PG&E, sustainability is managed on three levels:
Boards of Directors
The Compliance and Public Policy Committee of PG&E Corporation’s Board of Directors has primary oversight of corporate sustainability issues, such as environmental compliance and leadership, climate change, community investments and workforce development. This 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 Pacific Gas and Electric Company Boards address other components of PG&E’s sustainability commitment, including public and employee safety, operational excellence and investments to increase our delivery of clean energy and to enable a low-carbon future.
Business-Wide
PG&E’s Chief Sustainability Officer is responsible for leading PG&E’s corporate sustainability initiatives, reporting and engagement. To further embed sustainability into our operations, PG&E established a Sustainability Leadership Council, co-chaired by our Chief Sustainability Officer and Chief Customer Officer. The Council brings together leaders from functions such as supply chain management, corporate real estate, transportation services, environmental compliance and customer energy solutions to define holistic, long-term targets and strategies to reduce the environmental impact of our operations.
Grassroots Involvement
Employee-led initiatives throughout the business help integrate corporate sustainability priorities into our work. For example, our volunteer Grassroots Green Network actively engages employees to reduce facility energy use, water use and waste, while our Employee Resource Groups (ERGs) provide an important link to diverse communities through volunteer service, mentoring and scholarship awards.
Strategy and Integration
PG&E’s sustainability commitment is well-aligned with—and mutually supported by—California’s regulatory and public policy priorities. For example, the California Legislature passed SB 32, which requires the state to reduce greenhouse gas emissions 40 percent by 2030 compared to 1990 levels. PG&E supports the decarbonization of California’s economy and remains committed to broad-based climate actions—from deploying clean energy technologies to continuing to lead and innovate on energy efficiency.
With building a sustainable energy future as our guidepost, we continue to integrate sustainability into our multiyear strategic planning process. We use a rigorous integrated planning process designed to identify compliance obligations and key risks; formulate clear multiyear goals and strategies; align resources; and ensure integration, consistency and continuity in our 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.
Collaborating with—and listening to—external stakeholders is crucial to this process. That is why PG&E established an external Sustainability Advisory Council to help guide our sustainability strategy and offer input and recommendations to PG&E as we seek to combat climate change and advance our clean energy, environmental stewardship, economic development and community vitality initiatives.
Our materiality assessment, published in 2014, also continues to guide our sustainability strategy and broader enterprise-wide strategic planning process. PG&E plans to refresh this assessment by 2018.
Creating Incentives
PG&E’s Short-Term Incentive Plan (STIP) reinforces PG&E’s sustainability commitment by rewarding eligible employees for achieving specific goals crucial to our success. In 2016, we continued to tie compensation closely to safety, with public and workforce safety measures determining 50 percent of management’s annual at-risk performance-based cash compensation. Financial performance and customer service each represented an additional 25 percent.
| Measure | 2016 Weight |
|---|---|
| Safety Footnote 1 | 50% |
| Customer Footnote 2 | 25% |
| Financial Footnote 3 | 25% |
- 1. Based on four subcomponents: nuclear operations safety, electric operations safety, gas operations safety and employee safety. ▲
- 2. Based on two subcomponents: customer satisfaction and average duration of electricity outages. ▲
- 3. Based on PG&E Corporation’s earnings from operations. ▲
For more details on the specific measures and targets for our 2016 and 2017 STIP, as well as our 2016 results, please see page 48 of the 2017 PG&E Corporation and Pacific Gas and Electric Company Joint Proxy Statement (PDF).
Measuring and Communicating Our Progress
Holding ourselves accountable and reporting on our performance with transparency has been an essential hallmark of our approach since we began producing a formal corporate environmental report in the 1990s.
In this report, we share our progress on the 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 set of metrics and issues, the report shows where we are doing well, as well as where we have opportunities to strengthen our performance.