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Independent Review

BSR LogoBusiness for Social Responsibility (BSR) is pleased to provide our fifth independent review of Duke Energy’s annual Sustainability Report. The perspectives we offer below are informed by our knowledge of material social and environmental issues in the electric utilities sector, familiarity with Duke Energy and the company’s reporting practice over the past five years, and experience applying international standards for best practice in sustainability reporting. This review neither verifies nor expresses an opinion on the accuracy, materiality or completeness of information provided in this report.

Notable strengths of the 2010|2011 Report include its:

  • Reflection on Duke Energy’s achievements over the past five years. Roberta Bowman’s Q&A, presentation of multiple years of data and discussion of significant goals attained — such as the company’s dramatic reduction of solid waste and improvement in its Total Incident Case Rate since 2007 — highlight the longer arc of cumulative progress it has made since publication of its first Sustainability Plan.
  • Balanced exploration of existing and emerging social and environmental concerns. Duke Energy continues to directly and openly address long-standing concerns like nuclear safety and ethical conduct, as well as new issues like cyber security for smart grids and stakeholder preoccupations about new renewable energy technologies. However, we would like to see the company tackle long-term questions about the costs, relative CO2 reductions and environmental impacts of natural gas in greater depth.
  • Clear insight into the “work” of sustainability. This year’s report brings readers to the front lines of sustainability at Duke Energy. For the first time it includes employee as well as executive voices, shares grassroots innovations inspired by sustainability challenges and goals, and starts to document the business returns the company has enjoyed as a result, from cost reduction to investor recognition on the DJSI World Index. These are proof positive that sustainability is increasingly part of Duke Energy’s corporate DNA.

In next year’s report, we encourage Duke Energy to:

  • Thoroughly address the implications of the Fukushima nuclear crisis. Even as this report is written, the events unfolding in Japan are fundamentally reshaping the future of nuclear power. We — and the company’s stakeholders — will want to know what Duke Energy learned from Fukushima, and the impact those lessons have had on its approach to public policy, transparency and engagement with stakeholders around the costs and benefits of nuclear power, new generation strategy, and technology, design and safety measures at existing and potential nuclear power facilities.
  • Provide more sophisticated and in-depth discussion of supply chain sustainability risks, opportunities and activities. What does Duke Energy’s supply chain look like? How is it changing as its business is transformed? What kind of material social and environmental impacts do its suppliers have on workers and communities? How is the company comprehensively managing sustainability risk and capitalizing on opportunities with suppliers? While this year’s report provides greater detail on this topic than ever, we believe there is still room for substantial improvement in its treatment of supply chain sustainability.
  • Share how the company is reinvigorating its approach to sustainability in light of the planned merger with Progress Energy. This offers both opportunity and challenge. Opportunity to set aggressive new targets, learn from each company’s’ experience, and bring fresh eyes and skills to sustainability management. On the other hand, there will be dramatic changes to the company’s structure and leadership, which create great uncertainty for the future of sustainability at Duke Energy. We look forward to hearing how the company is integrating new operations, perspectives, staff, structures and leadership, and how it plans to build on its strong foundation for sustainability moving forward.

We appreciate the opportunity to share our feedback and look forward to following Duke Energy’s ongoing journey.

BSR Signature

Julia Ka’iulani Nelson
Manager, Energy & Extractives
Business for Social Responsibility
April 6, 2011