NRG Energy’s Path to One-and-a-Half: Deepening Commitment to Carbon Reduction
NRG Energy, Inc. is an integrated power company, dual headquartered in Princeton, New Jersey and Houston, Texas. NRG brings the power of energy to its customers by producing and selling electricity and related products and services in competitive markets in the U.S. and Canada.
Composed of dynamic retail brands and generation assets, NRG provides electricity to over 3 million homes and businesses, while generating approximately 23,000 MW of electricity.
Sustainability is an integral piece of NRG's strategy and ties directly to business success, reduced risks and brand value. To guide action within our company, we developed five pillars as a framework:
- Sustainable Customers focuses on providing solutions that help our customers transition towards a clean energy future.
- Sustainable Business focuses on establishing strong leadership in governance, transparency, reporting, and stakeholder engagement.
- Sustainable Workplace involves supporting a strong, healthy, and engaged workforce as well as being a positive force in the communities in which we operate.
- Sustainable Operations centers on reducing the negative environmental impact of our operations and generation assets.
- Sustainable Suppliers represents our initiatives to address the risks and opportunities within our value chain partners.
Climate Leadership and Goal-Setting
Though NRG began its carbon-reduction initiatives over a decade ago, we formalized our commitment to decarbonization in 2014 to remain competitive and a sector leader while working to avoid the worst effects of global climate change. As part of this commitment, we established goals to reduce absolute GHG emissions 50% by 2030, and 90% by 2050, from a 2014 baseline. These goals were the first of their kind in the U.S. power sector and NRG was named one of the first 10 companies in the world to receive certification by the Science-based Targets initiative in 2015, an endorsement that our ambition aligned with the 2-degree Celsius guidelines set by the COP21 convening in Paris. By 2019, we measured significant progress across our decarbonization initiatives, achieving a 37% absolute reduction of GHG emissions and placing our progress trajectory well ahead our 2030 goal.
These goals are only as good as the best available science. In 2018, the Intergovernmental Panel on Climate Change (IPCC) revised its guidance to limiting warming to a 1.5-degree Celsius scenario. As such, NRG took the step of re-evaluating our climate goals, especially given that we were on track to meet our existing targets well ahead of schedule. Once the updated trajectories were calculated and the new dates proposed, these goals were vetted within the company leadership and our Board of Directors. On September 24, 2019, we announced the acceleration of our absolute GHG reduction targets to align with the new 1.5-degree Celsius scenario. Our new goals are to reduce emissions 50% by 2025 on the way to net-zero by 2050. We’re proud to announce that we are already 83% of the way to our 2025 goal.
Achieving Incremental Carbon Reduction
Our decarbonization efforts are the result of the retirement of uneconomic units, retrofitting coal facilities to gas, running plants less frequently, or by displacing the operation of older, less- efficient units. Our path towards achieving our long-term environmental goals is to capitalize on progressive market opportunities that help us reach our net-zero goal, particularly in areas such as process development, improvements in the economics of new technologies, and the establishment of forward-thinking policy.
Communicating our Progress
Climate goals come with a litany of reporting groups, worksheets, and standards. We’re committed to best-in-class reporting principles to ensure that we’re transparently accounting for our progress in a way that’s comparable and decision-useful. We also ensure our latest environmental data is available to the broader investor community by completing CDP Climate and Water questionnaires. By leveraging leading available reporting standards like the Sustainability Accounting Standards Board (SASB) table and supporting the Taskforce for Climate-related Financial Disclosures (TCFD), we’re translating sustainability action, climate risk and opportunity, to the financial community in a way that supports long-term decision-making.
Establishing these targets was an important step for us and our sector. Adopting a climate commitment is the right thing to do, but it also places us at the forefront of an electric power transition that is customer-driven. As our stakeholders see decarbonization and electrification as key parts of their lives and their futures, it is important to establish ourselves as a partner in this transition. And we see setting science-based targets as part of the foundation of any resilient climate action plan.