PG&E published its first materiality assessment for corporate sustainability in 2014—a strategic project to help us identify topics that are material to the long-term sustainability of our business. Conducted in coordination with PG&E’s strategic planning process, the materiality assessment engaged our stakeholders, identified opportunities and risks, and sharpened our corporate sustainability strategy and reporting.
While we continue to engage our stakeholders on these issues, we recognize that PG&E’s materiality matrix captured a snapshot in time. Because our operating climate continues to evolve, we are assessing options for refreshing the assessment.
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.
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.
Our materiality assessment provided important, actionable insights into our stakeholders’ priorities and our own business risks and opportunities. We continue to integrate these insights into our work. For example, we structured this report to highlight our strategy and performance on the issues deemed most material in the assessment.
Defining a “Material” Issue
A material corporate sustainability issue is one that has the potential to impact PG&E’s long-term sustainability, based on the perspectives of internal and external stakeholders. This is different from, but related to, financial materiality, which is a threshold for influencing the economic decisions of investors. Material corporate sustainability issues are not limited to issues that could have a significant financial impact on the organization.
Key insights of the materiality assessment included:
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—and continue to be “foundational” issues.
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 continues to provide insight into how we might approach issues in a more integrated way.
Highlighted the importance of emerging issues. The assessment identified a number of emerging issues, including infrastructure resilience and adapting to the effects of climate change. PG&E continues to make progress in understanding and addressing this issue with our stakeholders.
For example, in 2016, we participated in a climate change resilience workshop hosted by the California Energy Commission and published our first Climate Change Vulnerability Assessment, which examines PG&E’s exposure to the forces of climate change, including flooding during severe storms, sea level rise, land subsidence, heat waves, changes in precipitation patterns, and wildfire danger.
Underscored the importance of water and drought response. In our assessment, water’s importance to PG&E was notable in its interconnections to other material issues, such as the reliability of our energy supply, including our extensive hydroelectric system, as California faces persistent drought conditions.
Our partnership with the University of California, Berkeley, and the Department of Water Resources to study the soil moisture, snowpack and other elements in the Feather River basin, serves as an example of our work to better understand emerging climate impacts and how they may affect PG&E’s hydroelectric system, our customers and wildlife.