For PG&E, mitigating climate change is a team sport
In March, 16 business schools, including Stanford, Harvard, MIT and London Business School, will partner to put on ClimateCAP: The Global MBA Summit on Climate, Capital, & Business — focusing on the financial and strategic implications of climate change for business. In preparation for this event, Alex Marchyshyn, a current MBA student at Duke University, interviewed Chris Benjamin, director of corporate sustainability at Pacific Gas & Electric (PG&E), about the utility's perspective on climate change as a business issue.
Alex Marchyshyn: Tell us a little bit about PG&E's perspective on climate change.
Chris Benjamin: PG&E is a gas and electric company headquartered in San Francisco that provides service to about 16 million people throughout northern and central California. Over the years, we've had a longstanding commitment to address climate change through our operations and by supporting our customers. We're located in California, which has some of the nation's most progressive energy and climate policies and goals, including a goal to reduce the state’s GHG emissions 40 percent below 1990 levels by 2030. Within that timeframe, the state also has goals around 50 percent renewable energy, more electric vehicles on the road and doubling energy efficiency. There is a lot under way.
Marchyshyn: Why is climate change a business imperative?
Marchyshyn: What actions are you and your team taking to mitigate risk?
Benjamin: Across the company, we're working to reduce the carbon footprint of our operations and the energy we deliver to our customers. We're working to help our customers meet their climate goals. And PG&E is supporting California's efforts to build climate resilience.
As a utility, we operate important infrastructure within the state. This means we face a variety of risks from a changing climate: in the near term, the risk of more frequent or severe weather events, and in the long term, rising sea levels and temperatures. We're working to better understand the nature of these risks and their impacts. And we're doing so in collaboration with others to integrate this information into how we make decisions about our infrastructure and how we manage our operations. It's a newer component of our climate journey, but something that we've been increasingly focusing on. We're now starting to see the effects of climate change, and it's important that we all work together to understand the nature of the risk and identify ways to adapt.
Marchyshyn: How has the engagement of the C-suite on climate change changed over the time you've worked at PG&E?
Benjamin: We've had strong and consistent support from our leadership on this challenge for decades. We came out early to say that the climate threat is real, and the time for action is now. We supported California's landmark Global Warming Solutions Act in 2006. And we supported raising the state's renewable energy and GHG-reduction targets in 2016. PG&E’s commitment has largely tracked with California’s longstanding focus on tackling climate change. And it's never been as important as it is today.
To get there will require that we continue to focus on the near-term objectives of providing safe, reliable, affordable and clean energy to our customers. At the same time, we need to be looking ahead and planning for the future and doing everything we can to take the bold climate action that's needed. I think the commitment to pursue both is a testament to the level of support we have from our leadership.
Marchyshyn: What would you say is the biggest risk to companies broadly, and PG&E specifically, when it comes to climate change?
Benjamin: There are transitional risks as we work to "decarbonize" the sixth largest economy in the world but also physical risks from changing weather patterns and more extreme weather.
More broadly, one of the biggest challenges of climate change is the complexity. Climate change isn't a problem that any one company or organization can solve on their own. It requires a high degree of collaboration across industries and communities and involves taking a holistic and systematic approach. Everyone has a part to play, and we all need to work together. There's also a lot of uncertainty around how the climate is changing and what the impacts will be, which requires flexibility and a continuous improvement mindset.
Marchyshyn: What do you want MBAs to know about climate change and how it affects business/your industry?
Benjamin: First, there is a really strong business case for addressing climate change. For us, it starts with our customers and working to meet their expectations. Whether it's meeting the needs of your customers or reducing risk in your company, there are a host of business reasons to work in this area.
I would also say that you shouldn't just look at the risks posed by climate change. Addressing climate change may bring opportunities as we transition to a clean energy future.
For example, in California, we have a major opportunity with the transportation sector which generates about 40 percent of California's GHGs. There is momentum toward a massive shift to electric vehicles. That will entail building out electric vehicle charging infrastructure. For PG&E, that is really exciting because we want to be the company that is the fuel source for the clean transportation transition — fuel that, by the way, is now nearly 80 percent GHG-free. In addition, we're helping to build out the charging infrastructure that will be needed. Today, we’re in the process of building 7,500 public EV charging stations in our service area as a step in that direction.
Marchyshyn: Anything else you think MBAs should know?
Benjamin: I'd encourage all business students to get involved in creating solutions, because climate change is a long-term challenge and we need the best minds to work on it.