Combating climate change and the decarbonization of our economy is one of the most important challenges we face. At NRG, we recognize the opportunity in tackling this challenge head-on and bringing a more sustainable future to everyone.
For over a decade, NRG has led the power sector in developing and implementing sustainability objectives that are rooted in science and backed by transparency and disclosure. We were the first U.S. power company to set time-bound greenhouse gas emissions reduction targets, and we were the first U.S.-based company in the power sector—and one of the first 10 in any sector—to earn the endorsement of our targets by the Science Based Targets Initiative. In 2019, we accelerated our goals to align with a 1.5° C global warming scenario rather than a 2° C trajectory which had been the basis of our prior goals. We were the first U.S. power producer to participate in the Carbon Disclosure Project (CDP) supply chain program, and the first awarded an “A” rating for supply chain engagement by CDP. When the Task Force on Climate-Related Financial Disclosures (TCFD) issued its recommendation, NRG was one of the first companies to support them publicly and we are aligning our strategy and risk management processes with the TCFD framework.
Our legacy of “firsts” isn’t just our history—it’s our future. Today, we are leading once again by becoming the first North American company to issue a sustainability-linked bond. The bond’s structure ties attractive financing to our decarbonization goals, thereby linking our capital strategy and climate objectives. Uniting these critical business elements reinforces our commitment to a low carbon energy future while also creating long-term value for stakeholders.
We took this step because sustainability is foundational to our company strategy. As environment, social, and governance (ESG) principles have become more important to stakeholders, they have become increasingly relevant measures of the long-term value of a company. This maturation of the sustainability landscape requires a new type of leadership that thinks of sustainability not as a standalone initiative, but a strategic imperative. Innovative financial instruments like sustainability-linked bonds validate our commitment to ESG strategy, our holistic approach to climate action, and improve our overall business viability.
The achievement of this exciting milestone was predicated on the collaboration of several teams across the organization, serving as an example of how visionary strategy can unite people. Most notably, a now strengthened bridge between our Sustainability and Treasury teams is an enduring example of the integrated nature of this work. The overwhelming response to this offering reflects the appeal in the market for these types of financing tools. It was a pleasure to work with our senior vice president and treasurer, Gaetan Frotte, to see our common goal realized and with such positive results.
It is exciting to see new capital market innovations—like this sustainability-linked bond—come to fruition as we embed sustainability across NRG. This integration of finance and sustainability provides a durable foundation to grow the business in line with our company values and with the strong support of our investors. -Gaetan Frotte
The journey to net-zero does not have an “easy button.” It is going to take collective action, innovation, and hard work. We are proud to be a pioneer in the energy industry as it transitions to a low carbon future.
