Constellation Energy

Constellation Energy is actively developing business models for a low-carbon future. In 2022, the company spent 52% of its CapEx on nuclear fuel development and will continue to spend about 56% of its CapEx on nuclear development for the next three years. The company owns and operates 21 nuclear reactors and has an ownership interest in two additional reactors. It announced the acquisition of a 44% ownership stake in the South Texas Project Electric Generating Station and announced plans to invest USD 800 million to upgrade its two nuclear plants in Illinois. Between 2023 and 2025, the company will also invest USD 350 million to repower and refurbish wind assets and USD 900 million to expand hydrogen production. Together these investments account for 16% of the company’s CapEx.

Constellation Energy’s emissions intensity has increased between 2021 and 2022 due to more frequent use of gas generation assets in Texas. Based on its current and planned assets, the company is projected to increase its emissions intensity over the next five years and significantly exceed its 1.5°C carbon budget between 2022 and 2037 due to an increased reliance on gas. The company must reduce its emissions intensity by approximately 10% per year to align with its 1.5°C pathway in 2027.

Constellation Energy is developing a roadmap to achieve its climate goals. This includes 95% low-carbon electricity generation by 2030 and 100% low-carbon electricity generation by 2040. The company discloses some elements of the transition plan, such as its share of CapEx on low carbon technologies; however, it should establish a time-bound action plan that outlines how it will transition to a low-carbon economy. This should include setting the scope 3 emissions reduction target, updates on the progress of its scope 1 and 2 targets and on increasing its renewable energy portfolio .

The company has set a target of 100% carbon-free electricity generation by 2040, with an interim target of 95% carbon-free electricity by 2030. It also plans to reduce operations-driven emissions by 100% by 2040 and methane emissions by 30% by 2030, compared to 2020.

Constellation Energy plans to expand its nuclear capacity by more than 10% and wind capacity by more than 40%. The company is also working on nuclear-powered hydrogen development, with commercial hydrogen production beginning in 2026. The company plans to spend over 67% of its CapEx on low-carbon technologies between 2023 and 2025. It also reports that it is currently developing a roadmap for achieving its climate goals.

In 2022, Constellation Energy generated 87% of its energy from nuclear sources, 11% from oil and gas, and 2% from renewables. The company provides tailored solutions to commercial customers and runs an engagement campaign to educate all customers about their climate change performance.

Constellation Energy was formed from the separation of its former parent company, Exelon Corporation, in 2022. Its total emissions, including scope 1, 2 and 3 emissions, increased between 2021, when it was part of Exelon Corp, and 2022, when it completed the separation.

Constellation Energy is still developing a roadmap for achieving its climate goals; however, it discloses some elements of its transition plan. The plan includes expanding nuclear and renewables capacity and phasing out fossil fuels, which accounted for 11% of the company’s generated energy in 2022. Based on the forward-looking projections of its assets, the company’s emissions intensity will not be able to reduce at a fast enough rate to align with its 1.5°C pathway by 2027.

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.

The company discloses the actions it takes to demonstrate hydrogen production at scale and create new jobs. However, 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 of the company’s 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 discloses the actions it takes to provide education opportunities for women and vulnerable groups to embed equality of opportunity. It does this through promoting STEM education, especially among women and minorities. However, no evidence was found of the company having a process for identifying skills gaps for workers and stakeholders affected by the low-carbon transition or a public commitment to help workers displaced by the transition to reskill or upskill.

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.

No evidence is available to show that the company commits to respecting human rights and the ILO fundamental rights at work, nor does it expects its business relationships to respect the ILO fundamental rights at work. 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. Moreover, no evidence was found of the company disclosing the stakeholders whose human rights have been affected by its activities. The company does, however, have a grievance mechanism available to workers and external stakeholders.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. However, no evidence was found of a time-bound target for paying all workers a living wage. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of the company’s required working hours. The company discloses some indicators of workforce diversity, including the age and gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. No evidence was found that the company commits to gender equality and women’s empowerment.

While the company commits to protecting personal data, no evidence was found of a privacy statement regarding the collection, sharing and access to personal data. Moreover, no relevant disclosure was found of the company’s global tax strategy and the corporate income tax paid for each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its contracts with business relationships. While the company has a lobbying and political engagement policy, no evidence that it specifies that it does not make political contributions. No relevant disclosure was found of the company’s expenditure on lobbying activities.