Corporate Responsibility and Sustainability Report 2020

Our Approach

Environmental Management System

PG&E’s operations are subject to extensive federal, state and local environmental laws and regulations. These requirements relate to a broad range of activities, including preventing the discharge of pollutants; safely transporting, handling and storing hazardous materials; properly managing hazardous wastes; protecting threatened and endangered species; and reporting and reducing emissions of air pollutants and GHGs such as carbon dioxide, methane and sulfur hexafluoride.

To meet these requirements, PG&E employs an Environmental Management System (EMS) modeled after the ISO 14001 environmental management standard and consistent with the ISO standard’s “Plan, Do, Check, Act” model for continuous improvement. The EMS uses a series of compliance work processes that help PG&E to manage regulatory compliance and our environmental impacts by each line of business.

The Vice President, Shared Services of Pacific Gas and Electric Company oversees our commitment to meeting environmental requirements. Compliance performance updates are reviewed monthly by PG&E’s officers, and an annual environmental compliance summary is presented to the Compliance and Public Policy Committee of the PG&E Corporation Board of Directors.

Compliance Program Milestones

Planning

In 2019, PG&E continued to leverage its EMS to manage and improve environmental compliance and performance. Some of our major strategic initiatives include improving governance at our facilities, performing an annual aspects and impacts analysis to identify top environmental risks across operations, and evaluating opportunities to improve our environmental review process for utility projects.

Implementation and Operation

PG&E employs a variety of operational controls to help ensure that the actions we take in meeting our environmental compliance obligations are correct and repeatable. We also learn from our experiences and integrate any lessons into our work processes and staff development.

In 2019, we continued to expand on new opportunities to apply technologies and processes to further our compliance efforts and minimize impacts on the environment. Key EMS initiatives included:

• Enhancing our cloud-based solution to track and trend data from environmental incidents and compliance activities.
• Using the same cloud-based tool to manage and streamline our project environmental release to construction process and ensure oversight over project reviews.
• Deploying our cloud-based system to serve as a “one stop” resource for field employees to find key technical documents, procedures and guidance.
• Continuing to reach strategic, programmatic agreements with agencies that further streamline our processes while protecting the environment.

PG&E conducts training to ensure employees have the skills and knowledge to correctly perform environmental activities associated with their work. Each year, PG&E trains thousands of employees on various environmental compliance responsibilities. Additionally, we require employees to take a training course on our environmental policy to reinforce every employee’s role in supporting PG&E’s goal of environmental leadership.

Reviews and Corrective Actions

An environmental auditing program is critical to ensure compliance with the many environmental laws and regulations relating to our business.

We review and audit environmental performance in three ways: self-assessments, internal audits, and compliance testing and risk reviews.

• Self-Assessments: Environmental personnel perform self-assessments of facilities or projects they oversee. Each assessment evaluates a facility or project for compliance with environmental regulations.
• Internal Audits: The Internal Auditing department—which reports directly to the PG&E Corporation and Pacific Gas and Electric Company Vice President, Internal Audit and Chief Risk Officer—conducts systemic and programmatic controls-based audits to independently analyze the effectiveness of our environmental compliance management systems.
• Compliance Testing and Risk Reviews: These reviews, designed to assess the adequacy of controls and risk mitigation, as well as compliance work processes, are conducted by the Pacific Gas and Electric Company Risk and Compliance Department.

During 2019, we performed 4,294 self-assessments and three internal audits for environmental matters. We began evaluating and testing controls in 2019 and completed eight assessments. In 2020, we are correcting deficiencies identified in 2019 and continuing to evaluate our processes.

In addition, we review environmental-related risks periodically (annually for low risks and semi-annually for medium or high risks). We review mitigation processes for all risks on a monthly basis.

In pursuit of continuous improvement, we also employ a corrective action process, which includes performing root cause analyses of noncompliance issues identified through environmental agency inspections and tracking detailed corrective action plans to resolution.

Measuring Progress

Operational Performance

PG&E tracks and reports a wide range of annual environmental compliance performance indicators. This section covers our performance results for 2019.

Reported Unintentional Releases and Permit Exceedances

We report unintentional releases that exceed regulatory thresholds, as well as many smaller releases, in an effort to ensure operational transparency to local agencies. We reported a total of 37 releases, defined as an unintentional discharge of a regulated substance that required notification to the State of California or exceeded thresholds allowed in applicable permits.

Agency Inspections

In 2019, a total of 570 agency inspections were conducted at our facilities. The majority of these inspections were performed by Certified Unified Program Agencies, such as city and county environmental health departments and fire departments.

Environmental Sanctions and Penalties

To measure compliance results, we categorize all written enforcement actions issued by a regulatory agency as minor, significant or critical. In doing so, we consider the level of impact to the environment, potential or actual monetary damages including restoration costs, and the number of repeat incidences. (This characterization represents a change from prior years in an effort to better align with industry benchmarks.) All enforcement actions are reviewed by the environmental leadership team on a monthly basis. We also track the percentage of agency inspections that do not result in written enforcement actions.

We received nine enforcement actions in 2019 that were considered critical. Our rate of inspections without a written enforcement action was 91 percent, one point above our target of 90 percent.

In 2019, PG&E paid a total of $47,003 in environmental penalties.

• 1. In 2019, PG&E began categorizing all written enforcement actions issued by a regulatory agency as minor, significant or critical. In doing so, we consider the level of impact to the environment, potential or actual monetary damages including restoration costs, and the number of repeat incidences. This categorization better aligns with industry benchmarks.¹
• 2. Includes system audits, internal audits, and compliance and risk management reviews performed by PG&E.²