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Presentation 10Apr2009 to conference "It Pays To Be Nice: Economic Models To Encourage Social & Environmental Responsibility, Center For Socially Responsible Business, Lokey Graduate School of …

Presentation 10Apr2009 to conference "It Pays To Be Nice: Economic Models To Encourage Social & Environmental Responsibility, Center For Socially Responsible Business, Lokey Graduate School of Business, Mills College

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  • 1. Corporate Social Responsibility at Pacific Gas & Electric Company Mills College- “It Pays to be Nice” April 2009
  • 2. In these economic times, companies face many challenges in staying successful Compliance Risk Mitigation Cost Savings Marketing / Brand Reputation with Customers Operational Excellence Financial Metrics Long-term Strategy Rewarded Shareholders 1
  • 3. A View Back in Time • The business of business is business • Giving Back Programs disassociated from business objectives – Eliminate appearance of: • conflicts • self-interest • self-promotion • Changing business world, e.g. competitiveness, customer expectations 2
  • 4. Prevailing Wisdom • “…focus has been on the tension between business and society rather than on their interdependence.” • “The result is often a hodgepodge of uncoordinated CSR and philanthropic activities disconnected form the company’s strategy that neither make any meaningful social impact nor strengthen the firm’s long-term competitiveness.” Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility by Michael E. Porter and Mark R. Kramer 3
  • 5. CSR is becoming more important in how stakeholders value the long-term prospects of companies. Source: Sustainable Asset Management, November 2008 4
  • 6. How markets compare and value CSR initiatives will be critical to its success within a company. CSR = CSR = Competitive Being Good Advantage 5
  • 7. PG&E focuses on CSR as one of its core values The Corporate Responsibility Report highlights some of the ways we are striving to fulfill our global responsibilities and meet our ethical obligations. This accountability starts with our 15 million customers, nearly 20,000 employees, investors, regulators, partners and communities within California. It ultimately extends to everyone who shares PG&E’s interest in ensuring a clean, secure energy future. Peter A. Darbee Chairman of the Board, CEO and President, PG&E Corporation 6
  • 8. OUR VISION The leading utility in the United States Delighted Customers OUR GOALS Energized Employees Rewarded Shareholders Environmental Leadership Customer Focus OUR STRATEGIES Operational Excellence • We act with integrity and communicate honestly OUR VALUES and openly • We are passionate about meeting our customers’ needs and delivering for our shareholders • We are accountable for all of our own actions: these include safety, protecting the environment, and supporting our communities • We work together as a team and are committed to excellence and innovation • We respect each other and celebrate our diversity 7
  • 9. What We Do • From Earth Day to Change a Light Campaign… 8
  • 10. Mission and Key Strategies To be the leading corporate citizen in the diverse communities we serve by: – Sharing our energy expertise and resources to promote solutions for the communities we serve – Expanding our community partnerships and philanthropic initiatives to create more environmentally sustainable communities – Engaging the commitment and involvement of our employees and retirees in the intersection of the needs of our communities and PG&E’s business interests 9
  • 11. How? • Clear, meaningful demonstration of commitment of the company’s values – Environmental leadership • Community engagement, particularly with underserved communities – Issues important to the community; business issues of importance to the company • Employee engagement—”energized” employees and retirees who are our ambassadors 10
  • 12. Focus Areas for Community Leadership √ Company priority Workforce development √ Community need Environmental leadership √ Weather emergency Strategic, territory-wide impact support √ Outreach to both diverse Engages diverse communities and underserved √ communities Ability to leverage resources √ Marketing/PR opportunities 11
  • 13. Community Relations 12
  • 14. Community Engagement • Freeze hits the Central Valley 1/11/07 • Governor declares state of emergency – $1 billion dollar impact to growers – 12,000 farm and packinghouse workers to lose jobs • PG&E Relief Plan includes donations to food banks, increase in REACH Plus credit, and community assistance days • Community Relations takes the lead in planning Community Assistance Days 13
  • 15. Orange Cove Community Outreach Day • Community Partners – City of Orange Cove provides facilities and community outreach – EOC provides bilingual volunteers and on-site LIHEAP assistance – Fresno Food Bank provides groceries on-site • Results – Over 500 households participate – 324 REACH Plus applications completed; $46,973 awarded in credits to customers – 86 CARE applications completed – Media coverage by KFSN, KGPE, Univision, freelance reporter working for NPR – 15-20 PG&E energized volunteers; employee food drive generates about 1,000 food items 14
  • 16. Volunteer Program www.pgevolunteers.com 15
  • 17. Volunteer Program Components Volunteer Events Company-sponsored: Signature events. Staff time and company resources are utilized to plan, promote and manage these strategically aligned volunteer activities. Events include (but not limited to): Earth Day Habitat for Humanity Junior Achievement Red Cross Salvation Army Employee or retiree sponsored: Events proposed and managed by an employee's or retiree's, including fundraisers not necessarily aligned with business objectives. Supported only as volunteer program staff assistance and company resources are available. Events aligned with 5Es will have the highest priority for these resources. 16
  • 18. Volunteer Program Components Program Initiatives Executive Nonprofit Board Participation Team Building Events Recognition of Volunteerism Frederick W. Mielke Awards Enhanced Community Service Awards Jefferson Awards New Employee Orientation 17
  • 19. PG&E’s employees volunteer throughout the service area In 2008, our employees 2008 marked our seventh consecutive volunteered more than 1,730 hours Earth Day partnership with the at food banks throughout the California State Parks Foundation service territory 18
  • 20. Campaign for the Community MORE THAN GIVING… GIVING BACK
  • 21. RESULTS! 2007 Increase 2008 Total $’s $3,889,649 7.8% $4,100,000 Donors 7699 7079 8.7% 20
  • 22. Philanthropy A Financial Investment in Our Communities
  • 23. CSR = Philanthropy? Philanthropy = CSR? • Philanthropy is not a standalone issue • Critical element of how a company demonstrates its corporate citizenship • Maximize business and societal benefits through alignment of philanthropy programs with business strategy • Find the shared value 22
  • 24. Shift Happens • Shifts: – Metrics – Results and social impact orientation – Refocused giving – Visibility and maximizing corporate brand • Reputation • Competitive Edge • Stakeholder engagement 23
  • 25. PG&E Environmental Program Strategy • Signature Programs • “Green” grants to community partners • Leveraging opportunities for other utility programs, e.g. energy efficiency, low income programs, etc. • Volunteer opportunities as part of the grantmaking 24
  • 26. Signature Programs • Existing Programs – Solar Schools- largest program of its kind:100 schools, 2000 teachers trained, 100,000 students benefiting – Solar Habitat- an exclusive partnership – PowerPathway™ • Programs Under Consideration – High School Academy Program 25
  • 27. PG&E’s 2008 Charitable Spend: $18.7 Million Benchmarking Charitable Contributions 2008 Charitable Contributions (% of Pre-Tax Earnings from Operations) Breakout 26
  • 28. PG&E Charitable Spending History 19.7 20 18.7 18.3 18 16 14.7 14 illions of Dollars 11.9 12 9.4 9.1 9.1 10 8.7 8.4 8.6 7.5 8 6.7 M 6 3.9 3.6 2.9 4 2 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Company Spending Foundation Spending Total Spending Campaign for the Community 27
  • 29. Community Reach: Santa Cruz Predatory Bird Research Group Mission of Santa Cruz Predatory Bird Research Group: To use the example of the Peregrine Falcon recovery as inspiration for tackling today’s environmental challenges PG&E’s Part: • For several years, Peregrine Falcons had used PG&E’s San Francisco downtown headquarters as a nesting spot • In 2005, PG&E partnered with the UCSC PBRG to build nest boxes and install web-cameras to document the peregrines’ life cycle • In 2009 the female peregrine laid four eggs; we hope that each will be fertile • UCSC scientists band a leg of each new peregrine chick to trace its development 28
  • 30. Community Reach: National Parks Foundation • Lead sponsor of NPF’s “Parks Climate Challenge” – High school students from underserved communities will learn about climate change at North Cascades National Park • Students selected from high schools in the Bay Area, Seattle, Colorado, Chicago, and Washington, DC • NPF will collaborate to produce an “Electronic Field Trip” • Kick-off event in Washington, DC – Local high school students participate in a Climate Change-related service project 29
  • 31. Habitat Build in Biloxi Contest 30
  • 32. 31
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  • 35. BUILD A GREAT COMPANY THEN HELP BUILD A GREAT WORLD
  • 36. Questions? 35