CMS Energy

CMS Energy’s emissions intensity decreased between 2017 and 2022 due to a significant increase in its wind power from 4% in 2017 to 15% in 2022. However, the company will need to double the rate of emissions intensity reduction to align with its 1.5°C pathway in 2027. CMS Energy is projected to reduce its emission intensity by approximately 31% between 2022 and 2027 as it phases out coal. To align with the 1.5°C pathway completely, the company must reduce its emissions intensity by approximately 37% during this period.

CMS Energy has no strategy or significant initiatives to drive emissions reduction in its supply chain, even though the company purchases almost half of its sold electricity. CMS Energy does not require its suppliers to meet climate-related requirements, which may lead to the company missing its net-zero targets. However, the company states that it plans to introduce climate-related requirements for suppliers within the next two years.

In 2022, CMS Energy’s capital expenditure (CapEx) was USD 2.4 billion. However, the company invested only USD 113 million (5%) of this in low-carbon technologies. The company plans to increase its share of low-carbon investments to USD 3.1 billion between 2023 and 2027, which will comprise 20% of its total planned CapEx. However, this is still far below sectoral-level expectations of 95% of CapEx spent on low-carbon technologies.

CMS Energy has a target of net-zero emissions by 2040 for its electric business and net-zero emissions by 2050 for the entire business. To achieve these targets, the company plans to use carbon offsets and CCS. The company does not disclose the share of offsets it plans to use; therefore, this target could not be meaningfully assessed in this benchmark. The company also plans to reduce methane emissions by 100% by 2030.

The company plans to phase out coal by 2025 and reach a 61% renewable energy share by 2040. The company’s planned transition to renewable sources includes the addition of nearly 8,000 megawatts (MW) of solar power capacity. Additionally, the company promotes energy efficiency, demand response, and emerging technologies such as grid modernisation and battery storage. However, the company lacks investment to support these actions.

CMS currently generates 30% of its electricity from coal and 45% from gas. The company reported spending less than 5% of its CapEx on low-carbon technologies in 2022, but it plans to spend 20% of its CapEx on low-carbon technologies over the next five years.

Between 2017 and 2022, the company’s emissions intensity decreased due to a growing proportion of wind power in its electricity generation mix. At the same time, emissions intensity from the company’s purchased power has increased. To align with its 1.5°C pathway between 2022 and 2027, the company must reduce its emissions intensity by approximately 10% per year.

The company plans to transform its energy generation mix by increasing the share of low-carbon sources. However, in 2022, it spent only 5% of its CapEx on low-carbon technologies. The company plans to spend 20% of its CapEx on low-carbon technologies over the next five years, but this is still below sectoral expectations. To achieve net zero by 2050, the company plans to use CCS. However, the share of CCS is not quantified.

No evidence was found of the company’s commitment to social dialogue or of the categories of stakeholders the company engages with on a just transition. Furthermore, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking low-carbon transition planning to mitigate the social impacts of the transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

No public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found that the company has action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company does, however, disclose the actions it takes to provide re- and up-skilling opportunities for workers and affected stakeholders. For instance, it has created a talent strategy in the company which is aimed at providing employees with new skills. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders or a public commitment to help workers displaced by the transition to re- or up-skill.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

The company commits to respecting human rights and the ILO fundamental rights at work. However, it can strengthen its disclosure on its human rights due diligence process and engagement with affected stakeholders. While the company has a grievance mechanism available to workers and affected stakeholders, no evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and supply chain.

No evidence of the company’s policies or commitments related to key decent work issues were found in the public domain. These issues include the provision of secure, safe and healthy workplaces, where workers are fairly renumerated and have a meaningful say in decision-making.  The company does, however, have over 30% of women in the highest governance body, and discloses the direct workforce by gender, age and ethnicity.

The company does not have a commitment to protecting personal data. However, the company does have a policy prohibiting bribery and corruption. While the company does have evidence of disclosing corporate income tax paid for each relevant jurisdiction, the company does not have a policy stating that it does not make political contributions. The company does disclose its expenditure on lobbying activities. However, the company can strengthen its disclosure on these subjects, and act ethically.