CO2: an aspect of corporate governance

A year ago, ENGIE announced its goal of being “Net Zero Carbon” by 2045. In what way does this announcement constitute a major step for the Group?

Julia Maris: I think, indeed, that it’s important to reiterate how ambitious this objective is. Aiming to be “Net Zero Carbon” by 2045 means reducing our greenhouse gas emissions to a level as close as possible to zero across the whole range of our activities and for each one of the scopes. 

This commits us to take action on both direct and indirect emissions. In concrete terms, this covers both emissions arising from energy production (electricity, heating and refrigeration) and emissions arising from gas sales to our end customers or those linked to our supply chain. 

This objective is especially ambitious in that it requires minimising our emissions and not offsetting them. This is because our commitment is to only use offsetting as a last resort and in proportions as small as possible for residual emissions.

In these ambitions, we can already be proud of the ground covered. We have, indeed, reduced our greenhouse gas emissions by 30% since 2017. We have also set precise goals for reducing our emissions by 2030. This is enabling us to commit to a road map compatible with keeping the rise in temperatures “well below 2°C” in comparison with pre-industrial levels.

What stage have we reached today? What have we done to create this dynamic?

J.M.: A decarbonisation strategy can only be implemented on a highly operational basis. It cannot and must not remain the remit of the “corporate” functions. The operational deployment of decarbonisation calls for the full mobilisation of our entities on these decarbonisation issues. From this standpoint, end 2021 marked a key step forward for the Group, since we included CO2 management in the financial, commercial and operational processes of the company.  On this basis, we translated our traditional multi-annual activity forecasts into emission levels, which now constitute annual carbon budgets for each of our operational entities. Moreover, the investment decisions are also assessed through the prism of their impact on our emission trajectories and our teams of business developers now all have a matrix available to evaluate the CSR impacts of their projects from their conception and to improve their performance, particularly from the environmental standpoint.

Because such subjects are of paramount importance for the Group, ENGIE also wanted to show its exemplary mindset by integrating CSR performance, including greenhouse gas emissions, into some aspects of the Managing Director’s variable compensation, but also into company executive performance initiatives.

This means that greenhouse gas emissions are now an integral part of company management and governance has been adapted to meet the group’s climate goals.

What are our main drivers for moving forward?

J.M.: Our main strength, the one that enables us to actually move forward, is a human driver: the commitment of our teams. The energy transition issue has been pervading our business culture for years now, but we have taken a new step in company-wide commitment with this goal of “Net Zero Carbon” by 2045. ENGIE has set up a Sustainability Academy to involve and train employees in energy transition issues, which has enjoyed huge success.

Beyond the human factor, the financial driver is also decisive. Today, the whole of our research budget is dedicated to low-carbon solutions. Our growth investments, € 4.3 billion in 2021, are also aligned with these priorities. This is enabling us, for example, to give effect to our ambitions in renewables: we are targeting 80 GW of renewable capacity by 2030 (as against 34.4 GW at end 2021); this is a substantial acceleration, but also a big step towards our objective of 100 % renewable gas by 2045 thanks to biomethane, green hydrogen and CO2 capture techniques.

Outside the company, positive momentum is also building up to boost this dynamic. Indeed, our policy is in line with the expectations of our stakeholders (customers, investors, NGOs, etc.), regulatory changes and emerging international and European standards. I’m thinking in particular of European green taxonomy, which classifies economic activities according to their environmental impact and directs investments towards projects which speed up the energy transition. We estimate that about 75% of our growth investments over the next three years will be eligible for European taxonomy.

What are our challenges for 2022?

J.M.: This year is particularly marked by a “Say on Climate” resolution submitted for the first time to a consultative vote by our shareholders during our General Assembly on April 21 2022. Basically, we are inviting them to vote on the Group’s climate policy and undertaking to request a new vote if there is a substantial change in this policy.

For the sake of transparency, we also published this year our first TCFD (Task Force on Climate-related Financial disclosure) report. This initiative, sponsored by investors, aims to clarify the strategy, governance, objectives and risks of the company with respect to climate change. This report will be expanded from next year and will be the reference document on the subject.

Moreover, inside the company and in line with our transformation-driven approach, we are adapting our organisation and our tools: this means building reporting metrics transversal to the activities and countries we operate in, particularly in environmental impact and biodiversity. This approach concerns each of our entities and aims to give more coherence and force to our actions.