PG&E Corporate Responsibility and Sustainability Report 2018

Northern California Wildfires

Our Approach

At its core, PG&E’s approach to sustainability is to meet the needs of today in a way that creates a better tomorrow. As an energy provider rooted in California, PG&E confronts choices and challenges with environmental, social and economic dimensions that impact the 16 million Californians we are privileged to serve. Finding the right balance in the decisions we make is essential to achieving our goals of providing safe, reliable, affordable and clean energy—today and into the future.

To guide these decisions, we have adopted a 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.

Our Mission

To safely and reliably deliver affordable and clean energy to our customers and communities every single day, while building the energy network of tomorrow.

Our Vision

With a sustainable energy future as our North Star, we will meet the challenge of climate change while providing affordable energy for all customers.

Our Cuture

  • We put safety first.
  • We act with integrity and humility. We are transparent, accountable, and lead by example.
  • The needs of our customers are central to our decisions.
  • We embrace change, innovation and continuous improvement.
  • We value diversity and inclusion. We speak up, listen up, and follow up.
  • We succeed through collaboration and partnership. We are one team.

Governance

At PG&E, sustainability is managed on three levels:

Boards of Directors

The Boards of PG&E Corporation and Pacific Gas and Electric Company have numerous permanent standing committees, which support each Board’s basic responsibilities. The standing committees are as follows:

  • Executive
  • Audit
  • Compensation
  • Compliance and Public Policy
  • Finance
  • Nominating and Governance
  • Safety and Nuclear Oversight

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 enable a low-carbon future.

Business-Wide

Pacific Gas and Electric Company’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 an internal Sustainability Leadership Council, co-chaired by the Chief Sustainability Officer and Pacific Gas and Electric Company’s Chief Customer Officer. The Council brings together leaders from functions such as gas and electric operations, 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. For example, the Council recommended, and PG&E adopted, a voluntary goal to avoid one million tons of cumulative greenhouse gas emissions from PG&E’s operations from 2018 through 2022, compared to a 2016 baseline.

Grassroots Involvement

Employee-led initiatives throughout the business help integrate corporate sustainability priorities into our work. For example, our volunteer Grassroots Green Network has engaged 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 shaped by California’s regulatory and public policy priorities. For example, in 2016, the California State Legislature passed Senate Bill (SB) 32, which requires the state to reduce greenhouse gas emissions 40 percent by 2030 compared to 1990 levels. More recently, California Governor Jerry Brown signed Executive Order B-55-18, which sets a new statewide goal to achieve carbon neutrality by 2045.

The Legislature also directs the California Public Utilities Commission (CPUC) to implement state laws and policies. These include laws relating to reducing greenhouse gas emissions, increasing renewable energy resources, deploying distributed and self-generation resources, establishing energy storage procurement targets, and developing a state-wide electric vehicle charging infrastructure. The CPUC approves funding and administration of state-mandated energy efficiency and other customer programs. The CPUC also conducts audits and reviews of Pacific Gas and Electric Company’s accounting, performance and compliance with regulatory guidelines.

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.

PG&E reached California’s 2020 renewable energy goal three years ahead of schedule, and we are well positioned to meet the state’s new 60 percent by 2030 renewable energy mandate set forth in SB 100.

With building a sustainable energy future as our North Star, 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.

In recent years, this rigorous strategic process has begun to explicitly recognize risks from a changing climate, including heat waves, more frequent and extreme storms and wildfires, drought, subsidence and rising sea levels. In 2017, we launched an array of foundational work to help PG&E anticipate and plan for changing weather and climate-change related events.

Collaborating with—and listening to—external stakeholders is crucial to this process. That is why in 2016 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.

We also refreshed our materiality assessment, to guide our sustainability strategy and inform our broader enterprise-wide strategic planning process.

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 2017, 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.

Short-Term Incentive Plan – Performance Measures
Measure 2017 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.1
  • 2. Based on two subcomponents: customer satisfaction and electric reliability.2
  • 3. Based on PG&E Corporation’s earnings from operations.3

For more details on the specific measures and targets for our 2017 and 2018 STIPs, as well as our 2017 results, please see page 50 of the 2018 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.