SUSTAINABILITY & ESG STRATEGY
Sustainability strategy and environmental, social and governance (ESG) disclosure are growing at an exponential pace, as the view of a company’s non-financial performance has become as important as its financial health. From the cost of capital, credit scores and insurance rates to how shareholders vote, stakeholders demand engagement, transparency and investment-grade ESG disclosure. Without question, the public health crisis and racial, social and civil unrest raised the stature of the “S” in ESG, prompting an expanded and more granular focus on how we manage AEP’s ESG performance, disclosure and governance.
The prominence of material sustainability issues in 2020 created an ESG trifecta: climate change strategy, risks and management; human capital management, including diversity, equity and inclusion; and the resilience and management of a company’s strategy and business model. Awareness of how ESG impacts the full value-chain helps to strengthen and inform business decisions and strategies. ESG-informed decisions will be critical inputs as we reimagine a modern, clean and reliable energy future for our customers; as we rebuild dynamic and thriving economies; and as we develop a flexible, diverse and inclusive workforce for the future.
Research has proven that companies with strong ESG performance realize short- and long-term value through enhanced growth, reduced costs, improved stakeholder relationships, increased employee satisfaction, and optimization of investment and capital expenditures. At AEP, we are integrating our sustainability practices and ESG initiatives into our corporate strategies and sharing our progress and goals with all of our stakeholders.
How We Manage ESG for AEP
Maintain ongoing monitoring of ESG material issues
Engage third-party research organizations to ensure use of accurate and timely data
Tell our story by engaging our stakeholders
Be transparent about AEP’s ESG performance
Integrate ESG into AEP’s strategy and risk monitoring
Position AEP as an industry and ESG/sustainability leader