Daily CSR
Daily CSR

Daily CSR
Daily news about corporate social responsibility, ethics and sustainability

Navigating Sustainability: NRG's Progress, GHG Emissions, and Energy Trilemma


In addition to our core values, our sustainability framework is a fundamental aspect of our business's development and growth. We invite you to join us for an extensive Q&A session with Jeanne-Mey Sun, Vice President of Sustainability at NRG, where she will elaborate on our achievements, objectives, and future plans.
Q: Reflecting on NRG's sustainability efforts in 2022, what were some notable accomplishments?

A: Last year, we made significant strides thanks to collaboration and innovative approaches both internally and externally. Our work was guided by three key priorities. Firstly, we maintained our commitment to transparently communicate our sustainability strategy, governance, plans, and progress to our stakeholders, adhering to widely accepted standards. In 2022, we achieved the following:
Reported International Financial Reporting Standards (IFRS) metrics for the seventh consecutive year.

Published our second annual report on the climate positions of our disclosed membership organizations, serving as a supplement to our fourth annual disclosure of public policy and political contributions.

Enhanced the sustainability data file accompanying this report by including 2022 data and additional historical data for specific metrics, enabling comprehensive trend analysis over an extended period.

Updated our "Further Reading" list, featuring additional NRG publications on sustainability-related topics, to provide readers with in-depth resources on specific subjects.

Incorporated our 13th year of sustainability reporting into this comprehensive Year-in-Review Report, which not only covers sustainability matters but also highlights the strong connection between NRG's corporate strategy and sustainability strategy.

We value your feedback on our reporting and remain open to further improvements.

Secondly, we focused on strengthening our processes and controls for gathering, documenting, and reporting greenhouse gas (GHG) emissions data. To achieve this, we engaged NRG's Internal Audit team to conduct a thorough review of our current procedures and identify areas for enhancement. We collaborated closely with the responsible functional groups, such as Plant Operations, Environmental, Real Estate, and Supply Chain, to address the findings from the Internal Audit. Throughout the process, we ensured continuous communication with our Board's Audit Committee, providing updates on the findings and their resolution. We are delighted with the outcome, as it resulted in more robust processes and controls for GHG emissions reporting. Furthermore, we continued to obtain third-party assurance for our GHG emissions reporting.
Lastly, we maintained active engagement with a diverse range of stakeholders, including investors, customers, industry groups, academia, and government and non-government organizations, all of whom are actively contributing to advancing the energy transition. Our efforts focused on several areas, including decarbonization pathways such as electrification, carbon capture, utilization, and storage, hydrogen technologies, and reducing the carbon footprint associated with the natural gas supply chain. We also actively participated in discussions around proposed sustainability reporting rules and standards. Additionally, we closely monitored the climate-tech start-up ecosystem, as we believe it holds great potential for identifying technologies and partnerships that can facilitate the decarbonization efforts of both NRG and our customers.

Q: What current initiatives are you most enthusiastic about?
A: We are particularly excited about three interconnected areas:
Firstly, we continue to support our customers in achieving their sustainability objectives. As outlined in the Customers chapter of this report, we offer various sustainable products and services to both residential and business customers, including customized renewable electricity subscriptions tailored to specific needs such as electric vehicle charging, integration with rooftop solar and storage systems, and community solar options.

We also provide certified carbon offsets and renewable electricity credits, enabling customers to offset their consumption of natural gas, gasoline, and fossil fuel-fired electricity. Furthermore, we offer energy storage and resilience solutions, demand-side solutions like time-of-use plans and demand response programs, which reward customers for reducing their electricity usage, as well as sustainability concierge and advisory services that support residential rooftop solar and storage systems, electric vehicle fast charger installation, and tailored electricity and natural gas supply solutions for businesses.
Secondly, we recently acquired Vivint Smart Home, a company dedicated to helping customers create more connected, energy-efficient, and secure homes. Similar to NRG's sustainable offerings, Vivint's portfolio encompasses both supply- and demand-side energy management solutions, including rooftop solar (panels, batteries, and inverters), smart lighting, and smart thermostats. By utilizing these offerings individually or in combination, customers can effectively manage their energy consumption and reduce their carbon footprints. We are enthusiastic about integrating Vivint's portfolio and expanding the platform to provide customers with more choices regarding the source, type, quantity, and timing of their energy consumption.
Thirdly, we recognize that recent acquisitions, including Direct Energy in 2021 and Vivint Smart Home in 2023, have expanded NRG's business activities beyond electricity generation. Therefore, we are currently in the process of quantifying our Scope 3 greenhouse gas (GHG) emissions, which encompass emissions both upstream and downstream of NRG within our value chain and are beyond our direct control. Additionally, we are quantifying the emissions that customers can avoid by utilizing the sustainable products and services we offer. This assessment will encompass the sustainable products and services of both legacy NRG and Vivint once completed.

Q: What concerns you the most?
A: One of our main concerns is balancing the achievement of our climate goals with the need to provide reliable and affordable energy to our customers, often referred to as the energy trilemma. For several years, these three imperatives were aligned: between 2014 and 2022, we successfully reduced our greenhouse gas (GHG) emissions by 42% through decreased power generation and a shift from coal-fired to natural gas-fired generation driven by market forces. However, in 2022, our GHG emissions increased compared to 2021 due to higher power generation, which was influenced by power market conditions and weather patterns. Specifically, the price of natural gas rose relative to coal following the Russia-Ukraine conflict, making coal a more economically viable option for electricity generation, thereby resulting in increased emissions.
As a competitive energy provider, NRG competes daily to serve the needs of customers who may prefer electricity with a higher carbon intensity. Additionally, there are regulations governing the closure of power plants in the market. Even if NRG intends to retire a fossil fuel-fired plant, reliability concerns may prevent us from doing so. In addition to complying with these market rules, we have a fiduciary responsibility to safeguard and enhance the financial performance of the company.
We actively explore various options to reduce the carbon intensity of our operations and the electricity we supply to our customers. Our technology-agnostic approach to decarbonization ensures that we can access the most cost-effective solutions when they become economically viable at scale. In the short term, we remain committed to offering renewable electricity to customers who demand it. As discussed in the Environment chapter, we are aggressively pursuing renewable power purchase agreements with third-party developers to expand the availability of renewable electricity for our customers.