Governance and Transparency
Business for Social Responsibility (BSR) is pleased to provide the following independent review of Duke Energy’s 2009|2010 Sustainability Report. Our perspective is informed by our experience with sustainability issues in the energy sector, knowledge of reporting best practices and familiarity with Duke Energy’s reporting approach over the past four years. It should be noted that this review neither verifies nor expresses an opinion on the accuracy, materiality or completeness of information provided in this report.
Key strengths we observed in the 2009|2010 report include:
- A truly integrated approach to reporting that more effectively capitalizes on the unique strengths of print and online media. Use of Web content for background information, detailed treatment of key issues, illustrative cases, and interactive features allow for more focused communication of performance on material issues in the printed report, while maintaining the option for readers to dive into greater depth. Online updates provide timely information throughout the year and social media establish new avenues for dialogue. Visual prompts such as the computer mouse icon and call-out boxes in the printed version effectively bridge the two formats and emphasize their complementary nature.
- Open discussion of lessons learned and unresolved challenges. Constructing a path toward a lower-carbon energy portfolio in a climate of technological and regulatory uncertainty is challenging. Inclusion of insights from the company’s energy efficiency initiative and discussion of low consumer investment in renewable energy programs demonstrate transparency and balanced treatment of learning and failure, as well as success along the way.
- Enhancement of stakeholder voices. Our last two reviews highlighted inclusion of stakeholder voices as a key area for improvement. We saw multiple examples in this year’s report that fulfill this objective: interviews with senior management, the Five Viewpoints dialogue and the reprint of the RMI case study. We hope to see Duke Energy continue this practice in future reports, and to refine its use to share new insights and critical perspectives.
In next year’s report, we encourage Duke Energy to:
- Better track and explain evolving strategies and targets. Duke Energy’s sustainability goals are aspirational, and the specific strategies and targets set to reach them should evolve over time to reflect the realities of implementation and spur continuous improvement. Acknowledging this, the company has refined the objectives that support its goals over the past three years, most notably its carbon-reduction scenario. However, the 2009|2010 report did not provide sufficient information about the status of previous objectives or the rationale behind new objectives and revised targets. Continuity between reports is critical to communicating a picture of performance, and ties together past and present achievement with a roadmap for the future.
- Report holistically and concretely on climate policy advocacy. Failure to reach an international agreement on carbon reduction at Copenhagen and a growing sense of urgency around advancement of climate change legislation at the national level are renewing stakeholder interest in business’s role in policy advocacy. Leading practice in reporting is also evolving to better capture the full spectrum of companies’ contributions to policy development, including technical input to policy design and implementation, education to raise voter awareness, and legal briefs, along with traditional measures, such as financial support for candidates and lobbying. While the current report articulates Duke Energy’s priorities for national climate legislation, more holistic communication of Duke Energy’s specific engagement activities will be of particular interest in the coming year.
- Address potential adverse environmental impacts of new renewable energy technologies, specifically biomass and offshore wind development. Direct discussion of actual or potential impacts will enhance public understanding of the tradeoffs associated with these lesser-known technologies and allow comparison with other energy generation options.
We enter 2010 with considerable uncertainty for the energy industry in the United States – economic, legislative and technological. What is certain is the critical role that sustainability will play in navigating the decisions necessary to move toward a low-carbon energy future and long-term business success. We look forward to learning how Duke Energy is charting its course in future reports.
Julia Ka’iulani Nelson
Manager, Energy & Extractives
Business for Social Responsibility
April 6, 2010