About this report
This report serves as a consolidated view of key ESG matters at a point in time. This report describes Sempra’s approach to and performance on key ESG topics and is divided into four sections:
This report has been prepared in accordance with the Global Reporting Initiative (GRI) Standards: See Core and the GRI electric utilities sector supplement (Appendix). Additionally, this report aligns with the Value Reporting Foundation’s SASB (Sustainability Accounting Standards Board)Standards to provide stakeholders with relevant information on a subsetof ESG topics that may impact long-term enterprise value creation (Appendix). Sempra is a member of the SASB Alliance.
We also continue to enhance our reporting under the Task Force on
Climate-related Financial Disclosures (TCFD) (Appendix).
Moreover, we report to the following standards and frameworks:
- United Nations (UN) Sustainable Development Goals (Introduction)
- Edison Electric Institute (EEI) and American Gas Association (AGA) combined ESG template
- Certain World Economic Forum Stakeholder Capitalism Metrics (Appendix)
- CDP Climate and Water questionnaires
Sempra’s sustainability website provides additional resources, including prior sustainability reports, position statements, responses to the CDP climate and water questionnaires, Sempra’s Sustainable Financing Framework, the EEI/AGA ESG template and our sustainability report supplements, where we provide more in-depth content on specific topics.
In response to stakeholder feedback and interest, we have made U.S. Department of Labor’s Equal Employment Opportunity Commission standards (EEO-1) data available on our website. Additionally, in 2021, Sempra set a goal to help develop a standardized template for our trade associations to disclose their positions on climate and alignment with the Paris Agreement. Read more in Appendix.
Sempra uses a comprehensive system to track and collect ESG data. This data is used to monitor performance and track progress toward our goals.
We generally include 100% of the ESG data for the operating companies where Sempra had majority ownership and control as of December 31, 2021. We also report ESG data for the following unconsolidated entities due to their significant impact and influence on our business as a whole:
- Cameron LNG: We include 50.2% of its ESG data based on our ownership share prior to the sales of non-controlling interests in Sempra Infrastructure Partners described below.1
- Oncor: We indirectly own 80.25% of Oncor Electric Delivery Company LLC (Oncor), and where possible we include 100% of its ESG data. However, historical data for Oncor in the following areas is not included: contractor safety; employee compensation; employee engagement survey results; ethics and compliance helpline data; greenhouse gas emissions; and water. In addition, unless specifically indicated, none of the enterprise-wide ESG goals stated in this report include Oncor.2
Non-financial data for 2019 and 2020 does not include data for the South American, midstream and renewables businesses we sold in 2019 and 2020. In addition, employee diversity metrics do not include our employees in Mexico because of our use of definitions established by the U.S. Equal Employment Opportunity Commission (EEOC).
Additional ESG data exclusions or additions are noted throughout our report. In October 2021, Sempra formed its Sempra Infrastructure platform by combining its liquefied natural gas (LNG) business and its ownership of Infraestructura Energetica Nova, S.A.P.I. de C.V. (IEnova) under a single platform intended to create scale benefits, portfolio synergies and a standalone investment grade credit rating. The Sempra Infrastructure platform is organized around three core focus areas: LNG and net-zero solutions, energy networks and clean power. Concurrently, Sempra sold a 20% noncontrolling interest in Sempra Infrastructure Partners to KKR, a leading global investment firm, for net cash proceeds of approximately $3.2 billion. Sempra subsequently entered into an agreement to sell an additional 10% noncontrolling interest in Sempra Infrastructure Partners to Abu Dhabi Investment Authority for a cash purchase price of $1.8 billion, subject to adjustment, which is expected to close in the summer of 2022, subject to obtaining regulatory approvals and satisfying all other closing conditions.
As the transaction forming Sempra Infrastructure closed in the fourth quarter of the year, in this report, data aggregation remains consistent with prior years and we do not make adjustments for the sales of ownership interests in Sempra Infrastructure Partners described above.
Unless otherwise specified, data in this report is as of or for the calendar year ended December 31, 2021.
Sempra conducts periodic ESG materiality assessments to identify and manage key ESG issues, sets goals in these areas and communicates progress to our stakeholders.3 We completed our most recent such materiality assessment in connection with our 2019 corporate sustainability report. As part of the assessment, we:
- Analyzed international sustainability frameworks and standards,
- Interviewed internal and external stakeholders to gain their perspectives on current and emerging priorities. In addition to shareholders, stakeholders included nongovernmental organizations, academia, regulators/government agencies, community members and members of Sempra’s and our operating companies’ management teams, and
- Assessed results against macro policy and other societal trends.
The material ESG issues identified during that assessment were: reliability; affordability; greenhouse gas (GHG) emissions; energy transition; public safety; disaster preparedness and response; employee and contractor safety; infrastructure security; and climate risk and resilience.
We established four sustainability pillars and specific goals and KPIs under each pillar:
- Enabling the energy transition
- Driving resilient operations
- Achieving world-class safety
- Championing people
In last year’s sustainability report, we announced additional goals and aspirations under enabling the energy transition, including our aim to achieve net-zero GHG emissions by 2050.4 Additional details on this and other aspirations can be found in environment.
To further refine our KPIs, in 2021 and early 2022 we conducted a corporate human rights assessment to identify and prioritize human rights issues across our companies and to assess and strengthen the way we manage these issues. Details can be found on Social. To take into account the constantly changing environment in which we operate, we plan to continue to analyze the relevance of various ESG topics to our stakeholders, while also updating our sustainability pillars, goals and overall reporting.
As we move forward with efforts to deliver on our goals, Sempra continues to monitor the evolving regulatory landscape and how our operating companies are supporting the energy needs of their operating areas and meeting legal and regulatory requirements and federal, state and local climate policies, including California’s ambitious climate targets for carbon neutrality by 2045 and goal of 100% of the state’s electricity to be carbon free by 2050. We understand that a successful energy transition will require industry leadership, technological advancements that are economically and technically feasible, and broad coordination and support from every level of government and among industry participants, among other things.
We collect and aggregate ESG data and supporting documentation from our corporate headquarters and operating companies. Prior to aggregation, in-line executives across our family of companies review and approve the ESG data, with final validation performed by the president and chief sustainability officer at each operating company.
Prior to publication, this report is reviewed by operating company subject-matter experts, Sempra’s corporate sustainability steering committee, the ESG disclosure committee, comprised of senior executives across Sempra and its operating companies, and the Safety, Sustainability and Technology (SS&T) committee of Sempra’s board of directors.
We also receive input from external stakeholders, employees and industry groups on report content and areas of focus to help improve alignment with disclosure trends and stakeholder interest. Throughout the year, we engage with investors and other stakeholders to hear their perspectives on current trends.
These insights help guide our report development. Our internal audit department reviews key data points for accuracy each year and we conduct periodic audits to review overall ESG data reporting processes. The SS&T committee reviews the report and the controls and procedures around ESG data collection and verification. We obtain third-party verification of a subset of GHG emissions data during the year following publication.
2020 scope 1 and 2 GHG emissions for SDG&E and SoCalGas were verified at a reasonable level of assurance by Cameron-Cole, LLC and Lloyd’s Register Quality Assurance, respectively. Verification of 2021 GHG emissions will occur in 2022. 2021 scope 1, 2 and 3 GHG emissions for Mexico and scope 1 emissions for U.S. LNG operations were verified at a limited level of assurance by Deloitte & Touche LLP.5
- 100% ESG data is disclosed for transparency in areas where ownership adjustments could create unnecessary confusion of the information (including, but not limited to, injury rates, compliance, fines and penalties and workforce diversity and training.
- Certain ring-fencing measures limit our ability to direct the management or activities of Oncor, which has its own board of directors and sets its own policies. As a result, Oncor sets its own ESG goals.
- According to GRI’s definition of material, for sustainability reporting purposes.
- For this purpose, we expect that achievement of net-zero GHG emissions will be determined based on company operations in 2050 and GHG emissions will be calculated according to widely accepted emissions reporting guidelines or mandates at that time. Our current emissions inventory includes both consolidated operations and our Cameron LNG (proportionate ownership share) and TAG Norte Holding joint ventures, which are unconsolidated equity method investments. Where applicable, we try to work with our business partners to manage environmental impacts, including GHG emissions. Our net-zero aim does not include Oncor, which sets its own goals due to certain ring-fencing measures that limit Sempra’s ability to direct the management or activities of Oncor. In line with California GHG emissions targets, Sempra California has announced a slightly accelerated timeline and aims to have net-zero GHG emissions by 2045.
- Scope 1 emissions are from sources owned or controlled by the reporting company. Scope 2 emissions represent emissions from electricity, heating/cooling or steam purchased by the reporting company and used in its operations in addition to emissions from electricity lost during transmission and distribution. Scope 3 emissions are emissions (excluding those already reported in scope 2) that are a result of the reporting company’s activity, but occur at sources owned or controlled by others.