ESG Q&A with UGI Corporation

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Brendan Heck
Vice President - Environmental, Social & Governance
UGI Corporation

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Environmental

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What is the visibility in achieving your emissions reduction goal(s) and can you provide us with concrete examples of how you plan to get there?

At UGI we believe in having open and honest dialogue with our stakeholders and this is particularly true in the area of carbon and emissions reduction targets.  We are committed to reducing our carbon footprint in a meaningful way and I think our 55% Scope I reduction target and our expectation to invest up to $1.25 billion in renewable solutions over the next five years demonstrate that commitment.  We believe that the tenor of these goals differentiates us in terms of transparency and accountability.  Both of these targets use 2020 as a base and 2025 as the target date.  These are ambitious goals in a short window, but we believe that they are achievable and align with our corporate strategy to deliver energy solutions safely and sustainably to our roughly 3 million customers.  We believe our carbon and emissions reduction targets set us apart from many others.  While we have an ambitious goal, we have a concrete plan to achieve it and our success can be measured in the near-term, not several decades in the future.

 

We have numerous projects already underway and a clear line of sight on others to help us achieve our Scope I emission reduction target.  First, we completed the sale of Conemaugh, a coal-fired power generation station, and thereby fully divested of all coal assets at the end of fiscal 2020.  Other programs include:

  • a robust pipeline replacement and betterment program at our natural gas distribution business where we replace cast iron and bare steel pipes.  In addition to reducing fugitive methane emissions, this program improves pipeline safety and reliability,

  • conversion of diesel fuel to renewable or biodiesel, compressed natural gas, or LPG for our fleets,

  • investments in leak detection technology,

  • capital investment on equipment at compressor stations to decrease emissions, and

  • ongoing reductions from efficiencies such as route optimization technology.

 

Social

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Some companies are resetting DE&I goals. How have the goals changed, and how are they measured? What operational changes have been made to support achieving the new goals? How are management and Board engaged in DE&I?

I can’t speak to what others are doing, but I think using the word operational in the question is very important and resonates with UGI’s overall DE&I strategy.  In 2020 UGI introduced a blueprint to enhance, expand, and operationalize our overall DE&I strategy.  We call that our BIDE platform. BIDE stands for Belonging, Inclusion, Diversity, and Equity and we believe this allows UGI to improve DE&I by focusing on recruitment, education, and leadership development.  We are focusing our BIDE efforts in the areas of culture, career, community, and commerce.  We believe that we can be a “part of the solution” in creating a workplace culture where differences in cultural perspectives, life experiences, and differences, are not only nurtured, but embraced. 

UGI believes that having a diverse workforce will allow us to increase retention and employee engagement, open up new avenues for recruiting, diversify our procurement efforts, and increase innovation.  As part of our continued commitment to enhancing opportunities for diversity in our workforce, all executives have a DE&I component in their annual bonus plan effective Fiscal 2021. The executive team is evaluated on the effectiveness of the Company’s development of a multi-dimensional strategy to deepen and improve the organization’s commitment to DE&I, supporting the Company’s BIDE initiative, and establishing a roadmap to achieve excellence in DE&I and brand UGI as an employer of choice for diverse candidates. 

The Board is actively engaged in DE&I and human capital management more broadly.  Performance on our BIDE initiative is reported to the Compensation and Management Development Committee of our Board at least quarterly and the performance is then shared more broadly with the Board.

 
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What is the most important component of the “Social” part of ESG to you and how do you plan to enforce or strengthen it? 

This is a very difficult question to answer because we believe that all components of “Social” tie together with “Environmental” and “Governance” to create an organization that is sustainable over the long term.  That is our goal as it relates to both ESG and our overall corporate strategy.  That being said, we are very focused on cybersecurity, DE&I, human capital management more broadly, community and stakeholder engagement, human rights, and many others.  However, if we had to highlight just one, I would say safety.  Our employees train and work extremely hard to ensure that we can safely and reliably deliver our products and services.  As an organization, we will always stress that safety is our highest priority because nothing is more important than the safety of our employees and customers. 

We remain focused on continuous improvement in this area, and we recently set goals to reduce our Total Recordable Injuries and Accountable Vehicle Incidents by 35% and 50%, respectively, by 2025 using 2017 as a base year.  This level of accountability to our stakeholders helps us to further reinforce this important aspect of our business.  We continue to strive hard to make safety a critical component of our corporate culture and began including safety as a component of the annual bonus calculation for executives and non-executives to reinforce our commitment throughout the organization.  We further strengthen our commitment and oversight by reporting our safety performance to the Board regularly.  Safety remains key focus area to drive stakeholder satisfaction, lower opex over time, and build a more sustainable UGI.