To better serve customers and investors, the Edison Electric Institute (EEI) recently announced that it is launching a pilot environmental, social, governance, and sustainability-related (ESG/sustainability) reporting template, with the goal of helping EEI’s member electric companies provide investors with more uniformity and better consistency for ESG/sustainability metrics.
“EEI’s member companies are committed to a clean and affordable energy future, and our industry is leading the way in emissions reductions, having cut carbon dioxide emissions 25 percent below 2005 levels as of the end of 2016,” said EEI President Tom Kuhn. “In an effort to become a model industry for ESG/sustainability reporting, EEI has been working closely with our large investors and financial institutions to better understand their informational needs regarding reporting metrics.”
In order to assess the current ESG/sustainability reporting practices, EEI assembled a broad working group compromised of institutional investors who specialize in asset management, ESG/sustainability, investment banking, and buy-side and sell-side research and electric company officials from various disciplines, including accounting, environment, ESG/sustainability, finance, treasury, investor relations, and legal.
“We expect that the template, created through a thoughtful and inclusive process, will be a useful tool to provide consistent data and information, which will help the financial community as it evaluates companies in the industry,” said Caren Byrd, managing director of Morgan Stanley’s investment banking division.
Over the past 18 months, the working group helped EEI develop the template for the qualitative information, including ESG/sustainability governance and strategy, and quantitative information, including portfolio data, emissions, and human and natural resources, that investors are seeking. The template also helps to provide investors with more clarity on risks from stranded assets and regulatory issues, as well as opportunities for investments in clean energy. While EEI has had overwhelming member company support, companies ultimately will choose if and how they incorporate this voluntary template into their current reporting.
The electric companies participating in the pilot will publish their 2016 data in the coming weeks. For those interested in the information, it typically will be posted on the investor relations or sustainability sections of the electric company’s website. EEI plans to release Version 1 of the template in mid-2018 for member company use with reporting 2017 data. IEF