PG&E Corporate Responsibility and Sustainability Report 2021

COVID-19 Response

Ethics and Compliance

At PG&E, we are committed to complying with both the letter and the spirit of the law and our Employee Code of Conduct identifies the expectations and requirements for which coworkers are accountable. PG&E promotes an ethical culture in which coworkers are encouraged to speak up and meet the standards laid out in our Employee Code of Conduct at all times.

Our Approach

Business-wide

PG&E employee holding a clipboard walking under an overhead array of ventilation fans Within senior leadership, the PG&E Corporation Chief Ethics and Compliance Officer (CECO) leads compliance and ethics. The CECO reports to the PG&E Corporation Chief Executive Officer (CEO) and has additional reporting responsibility to the Audit Committees of the PG&E Corporation and Pacific Gas and Electric Company Boards of Directors.

The CECO is responsible for:

  • Building a best-in-class compliance and ethics program and managing its implementation,
  • Overseeing enterprise-wide programs for compliance monitoring, reporting, assessment and remediation,
  • Overseeing enterprise-wide programs for records and information governance, and risk reduction,
  • Strengthening ethics-and compliance-related training,
  • Reinforcing PG&E’s compliance and ethics culture through communications and outreach,
  • Identifying areas of compliance and ethics risk,
  • Managing a library of policies and procedures,
  • Developing action plans to prevent, detect and correct risks and issues, and
  • Supporting the federal monitorship and probation arising out of Pacific Gas and Electric Company’s San Bruno criminal conviction.

Beginning in 2016, we developed and implemented a standardized framework called the Compliance and Ethics Maturity Model, which includes eight elements derived from the U.S. Federal Sentencing Guidelines that define the parameters of an effective compliance and ethics program.

Additionally, management-level governance bodies help drive and coordinate our compliance and ethics activities:

  • Compliance, Ethics and Audit Committee: Made up of officers, this committee provides leadership, strategic guidance and oversight of PG&E’s compliance, ethics and audit programs. It works to promote an organizational culture committed to integrity, ethical conduct and compliance with all applicable laws, regulations and PG&E requirements.
  • Compliance and Ethics Leadership Team: This cross-functional team of non-officer compliance and ethics leaders within PG&E is accountable for promoting the effectiveness of PG&E’s compliance and ethics program by coordinating across the lines of business on strategy, goals and programs, as well as sharing best practices.
  • Risk and Compliance Committee in each line of business: This committee includes the line-of-business officer and senior leaders, and provides leadership, strategic guidance and oversight for each line of business’ compliance and ethics program and works to promote compliance with all laws and regulatory requirements, as well as maintain focus on operational risk management and ethics.
  • Ethics Council: PG&E’s Ethics Council is a cross-functional group of coworkers and leadership focused on promoting ethical behavior throughout PG&E. Through regular discussion and action, the Council explores the role that business ethics plays in our operations and in our relationships with coworkers, customers and all other stakeholders.

To provide guidance on conduct requirements, PG&E maintains codes of conduct for the following:

PG&E has also issued a Human Rights Statement in furtherance of our commitment to conduct our business in a manner that respects the human rights of all.

Boards of Directors

Certain committees of the PG&E Corporation and Pacific Gas and Electric Company Board of Directors (the “Boards”) have specific oversight responsibility for compliance management in their respective substantive areas:

Entity Compliance Oversight Responsibilities
Sustainability and Governance Committee Footnote 1
  • Oversees public policy, sustainability and corporate responsibility issues that could affect customers, shareholders or employees
Audit Committees
  • Coordinates the compliance-related oversight of the various committees of the Boards, including:
    • The companies’ compliance and ethics program,
    • Compliance with laws, regulations and internal policies and standards, and
    • Internal or external compliance reviews or audits.
  • Oversees and monitor compliance with legal and regulatory requirements, in concert with other Board committees
Safety and Nuclear Oversight Committees
  • Oversees matters relating to safety, operational performance and compliance issues related to Pacific Gas and Electric Company’s nuclear, generation, gas and electric transmission, and gas and electric distribution operations and facilities
  • Oversees compliance with the Wildlife Safety Plan
  • 1. Committee of the PG&E Corporation Board of Directors only.1

For a full description of Board committee oversight responsibilities, please see the webpages of the Boards of Directors of PG&E Corporation and Pacific Gas and Electric Company, as well as our 2021 Joint Proxy Statement (PDF).

Lines of Business

Each of PG&E’s lines of business has coworkers who are responsible for implementing the line of business’ compliance and ethics programs. Each of these programs is overseen by the respective senior officer for the line of business.

2020 Milestones

In 2020, highlights included the following:

  • Enhanced training and communications related to culture and the Code of Conduct. PG&E’s compliance and ethics training in 2020 focused on building trust. We encouraged coworkers to speak up, listen up and follow up, including a podcast series for leaders, and quarterly communications toolkits on compliance and ethics topics. We also held our first Fraud Prevention Awareness Month to educate coworkers about fraud prevention and encourage them to report suspicious behavior.
  • Increased transparency about the Employee Conduct Program. We shared more details about the misconduct investigations process—and substantiated misconduct—to encourage coworkers to contact the PG&E helpline to ask for guidance or report misconduct. As a result, year-over-year calls into the PG&E helpline materially increased, and there was a reduction in the rate of substantiated misconduct.
  • Worked with business leaders on compliance and ethics program maturity to further reduce compliance risk. A third party conducted 24 Maturity Model assessments to assess and monitor the compliance and ethics program for each line of business and select shared compliance areas. We migrated the vast majority of our compliance requirements to a single platform and continued to focus on compliance controls.
  • Made progress towards information governance maturity and reducing enterprise risk. This was accomplished through focused communications and training, governance, implementation of records management tools and remediation of records risks.

Measuring Progress

The annual all-coworker compliance and ethics training is comprised of video vignettes based on real-world issues that coworkers might face and emphasizes the importance of ethical decision-making. In addition, we require all coworkers to complete Code of Conduct training annually and certify that they have read, understand and will comply with our Employee Code of Conduct.

Training Footnote 1
2016 2017 2018 2019 2020
Compliance and Ethics Training 99.4% 99.9% 99.9% 99.9% 99.9%
Code of Conduct Training 99.8% 99.9% 99.9% 99.9% 99.9%
  • 1. For a variety of reasons, a statistically small number of PG&E’s workforce is unable to attend a training session in any given calendar year.1

We continued our Reach Every Employee program, which offers every coworker the opportunity to speak up to their supervisors about safety concerns, identify potential misconduct issues and share new ideas. Every supervisor is accountable to follow up on the issues and ideas raised by their team.

Reach Every Employee Footnote 1
2018 2019 2020
Reach Every Employee 99.9% 99.9% 99.9%
  • 1. For a variety of reasons, a statistically small number of PG&E’s workforce is unable to complete a Reach Every Employee conversation in any given calendar year.1

The Speak Up Index is comprised of questions related to trust and overall willingness to speak up. In 2020, PG&E achieved its highest index score to date, but narrowly missed its goal of 72% favorable responses.

Speak Up Index Footnote 1
2017 2018 2019 2020
Reach Every Employee 65% 67% 66% 70%
  • 1. This figure represents the percentage of favorable responses to questions on an employee survey that comprise the Speak Up Index.1

PG&E received 569 allegations of misconduct in 2020. This was a 13% increase over 2019 levels, though substantiated cases of misconduct remained flat. PG&E also received 147 requests for guidance from employees in 2020, up 39% from 2019. We believe these increases are attributed to more communications about the PG&E helpline, misconduct and the investigations process throughout 2020.