"The term ESG has been used increasingly by investors and others over the past few years, but the ESG concept is not new to us. Since our inception, Southern Company and its operating companies have prioritized responsibility, sustainability, commitment to community and transparency. We have long believed corporate responsibility and corporate strategy are inextricably linked."
Thomas A. Fanning
Chairman, President and CEO
Energy connects people, businesses and future generations to growth, possibility and opportunity. Driven to realize this potential, Southern Company continues to build the future of energy for the advancement of our customers and communities. Our company has been in existence for more than a century, and as we move toward a new energy future we will build on our solid foundation to help ensure the sustainability of our business for many years to come.
Our customer-focused business model – with the customer at the center and our operating companies providing high reliability, low prices and high customer satisfaction to support constructive regulation and healthy capital spending – is the cornerstone of our business focus. In addition to these traditional focus areas, customers, investors and other stakeholders increasingly value sustainability, resilience and constructive engagement. Southern Company’s values and strategy are directly aligned with the evolution and growing importance of these priorities.
While we focus on and discuss a wide range of Environmental, Social and Governance (ESG) issues internally and with our stakeholders, current priorities for our company are: decarbonization; reliability, resilience and affordability; innovation; workforce sustainability; diversity, equity and inclusion; and community relationships. Our sustainability website is designed to highlight the tremendous work underway across our company and provide you with the most important metrics and information on our priorities.
In our most recent in-depth climate report, Implementation and Action Toward Net Zero, we set a long-term goal of achieving net zero greenhouse gas (GHG) emissions by 2050 and reaffirmed our interim goal of reducing GHG emissions 50% by 2030, as compared to 2007 levels. We estimate that 2021 emissions were 47% below 2007 levels, and we expect to consistently achieve GHG reductions of greater than 50% by 2025, a full five years earlier than our 2030 goal. In 2021, we indicated our intent to repower or retire a significant portion of our remaining coal generating fleet. By the end of 2028, pending regulatory approval, we expect to have eight coal units remaining, down from 66 in 2007.
With the increase of business disruptions related to extreme weather events, cyber-attacks, the COVID-19 pandemic, supply chain challenges and other factors, our customers have increased needs and expectations for reliable and resilient service. Southern Company must invest in our electric and natural gas infrastructure to help ensure best-in-class service. While complete risk elimination is not possible, prudent investment can serve to maximize resilience, recovery and business continuity while preserving affordability for customers.
Southern Company is the leading U.S. utility for research and development (R&D). For decades, we have worked with governmental institutions, research organizations, peer utilities and customers to fund, develop, test and pilot new technologies. Our R&D organization today is focused almost entirely on clean energy solutions that can help our company and our industry decarbonize to reach our net zero goals.
Simply put, a company cannot be sustainable without a strong and dedicated workforce. At Southern Company, we employ some of the best and brightest in our regions and in our industry. Competition for talent is stronger today than at any time in my career. Southern Company is well-positioned to attract and retain a premium workforce due to our decades of investment in recruiting, workforce training and development. We are honing our approaches daily to help ensure we remain competitive on many fronts, including hiring, compensation and pay equity, company culture, inclusivity and employee benefits.
Southern Company has formalized commitments and actions toward preventing racism, and I pledge that this work will not be episodic but rather will continue and become reflected in Our Values that we live each and every day. Our Move to Equity framework focuses on our approaches to talent, work environment, community investment and social justice, supplier diversity and political engagement. This framework will guide our businesses in their continuing work on racial equity and racial justice. It also makes clear our beliefs, institutionalizes our commitments, and works to align our volunteering, giving and community investment strategies to the four key pillars we have prioritized for impact: education, criminal justice reform, economic empowerment and energy justice.
Embedded in our culture is the philosophy of being “A Citizen Wherever We Serve.” Employee volunteerism and support of community initiatives, both large and small, are hallmarks of Southern Company and our subsidiaries. Elements of each of the core areas previously discussed impact our communities. Our objective is to work closely with community partners to help ensure their long-term vitality.
At Southern Company, we have long believed corporate responsibility and corporate strategy are inextricably linked. The Board of Directors of Southern Company provides substantive oversight to our management team on strategy and risk issues across the ESG spectrum, and each Board committee has responsibility for key elements of risk oversight. By focusing on these issues, we aim to effectively align and link our commitments to customers, communities, employees, policymakers and stockholders. Importantly, engagement with our stakeholders will remain a priority as we collectively shape the future of our company.
Thank you for your interest in our company. We will continue our hard work on your behalf.
Thomas A. Fanning