The path of decarbonization of electricity: we will be sustainable or we will not be

There is no doubt that, in recent years, the most advanced economies have achieved major sustainability achievements and environment. Today it can be said that the decarbonization process is unstoppable and that the measures of the 2030 Agenda aimed at achieving the Sustainable Development Goals (SDGs) are advancing.

Certainly ambitious goals, which seem practically unattainable without the role and involvement of private companies. Larry Fink, founder of BlackRock, in his already prestigious annual letter to clients, pointed out that, although governments should lead this transition, companies and investors also play a relevant role.

I am aware that still There is a long way to go. Not all companies establish commitments of equal scope, neither clearly measurable nor quantifiable.

Francisco Reynés is president of Naturgy

In the case of Naturgy, we only understand business management linked to a commitment to sustainability and, for a long time, we have aligned our management with the ESG criteria. In fact, the company was, more than two years ago, one of the first in Spain to create a Sustainability Commission within its Board of Directors, as a sign of commitment at the highest level.

This commitment is made explicit, with concrete and measurable objectives, in our Sustainability Plan. Its guidelines are based on the SDGs set by the United Nations and supported by the axes of governance and environmental management, circular economy and eco-efficiency, and biodiversity and natural capital.

In this sense, we have especially delved into three of the SDGs. Goal 7, which promotes the guarantee of universal access to affordable, reliable and modern energy, the increase in the use of renewable energies and the promotion of energy efficiency. Objective 11, with the creation of a commercial offer of products and services that contribute to the energy efficiency, to the reduction of our customers’ consumption and to the improvement of air quality in cities. And goal 13, with the adoption of urgent measures to combat climate change and its effects.

According to the World Economic Forum’s 2020 Global Risks Report, climate change risks are likely to have the greatest impact on the global economy and on businesses in particular. Therefore, the transformation of the energy sector is essential and At Naturgy we take it as a real opportunity. Therefore, we decided that our Strategic Plan 2021-2025 was born from a deep commitment to ESG.

The risks of climate change are those with the greatest probability of impact on the global economy and on companies

Already in 2020, we were one of the first Spanish companies to announce the closure of all our coal plants, which implied a reduction of our carbon emissions by 30% compared to 2017. And, in addition, we did so by launching just transition plans to minimize the local social and economic impact.

Our goal is to be carbon neutral by 2050 and to have a renewable installed capacity of close to 60% by 2025.

But while it is important to make commitments, it is even more important to keep them. Thus, during 2021, our progress in reducing emissions remains on the right track. In the first nine months the company recorded a further decrease in greenhouse gas emissions of about 12% as a consequence of the higher renewable production.

Social commitments are also important to all of us who work at Naturgy. If, during the worst months of the covid-19 pandemic, the company launched a battery of measures to support all its stakeholders, now we have again taken a step forward. Given the escalation in the prices of pool electric, in September we announced a first initiative to reduce the impact of the rise in the price of electricity on the domestic consumer.

Recently, we have decided to extend this initiative to companies, offering our infra-marginal production at a price of € 65 / MWh for three years. It’s about the initiative Commitment, a true example of our responsibility and sensitivity to the real needs of families and our companies.

Our goal is to be carbon neutral by 2050 and have a renewable installed capacity close to 60% by 2025

This valuable social vocation is completed with the work of the Naturgy Foundation, which focuses a large part of its efforts on developing programs aimed at alleviating energy vulnerability. And it does so through the rehabilitation of homes for vulnerable families, training in energy efficiency and consumption, and energy volunteering. In addition to raising awareness and training on energy and the environment.

The vision of the Chicago school economist and Nobel laureate Milton Friedman is far from the modern management of business management and the mindset of today’s managers. He, who went so far as to affirm that the sole objective of companies was to maximize the profits of their shareholders.

Today the vision is different. The focus has shifted from a capitalism of shareholders to one of stakeholders. And Larry Fink initialed it earlier this year: “We believe that sustainability must be the new investment standard”. An affirmation with which in Naturgy we fully identify, because the companies will be sustainable or they will not be.

*** Francisco Reynés is president of Naturgy.

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The path of decarbonization of electricity: we will be sustainable or we will not be