E.ON

E.ON is the highest-scoring company in the benchmark in the area of climate management. Its transition plan is detailed, backed by financial content, makes extensive use of appropriate scenarios, and discusses risks and opportunities in detail. E.ON uses a carbon price of USD 85 for both its transition planning and scenario testing. The transition plan has concrete steps for growth in new business areas, such as hydrogen from renewable sources and e-mobility. Further, climate governance is embedded at the highest levels of the organisation. Climate-related performance forms 25% of both E.ON’s bonus-based short-term incentive plan and its share-based long-term incentive plan.

Currently serving 48 million customers, E.ON is actively developing low-carbon business models that drive its customers towards low-carbon solutions. The company provides energy as a service, technologies such as rooftop solar photovoltaics (PV), smart home devices and energy audits. Customer solutions is one of E.ON’s core business segments and accounts for 80% of its sales. Although small in size, it is also developing new business activities in the areas of electric vehicle (EV) charging, hydrogen from renewable sources and energy storage technologies. However, in 2023 the company closed its last remaining nuclear plant. E.ON is transitioning from being an energy provider to becoming an energy services, infrastructure and solutions provider.

E.ON has set a target to reduce its scope 3 category 3 (fuel and energy-related activities) emissions intensity by 75% by 2030 compared to 2019. It also plans to reduce its scope 3 emissions by 50% by 2030 and by 100% by 2050 compared to 2019. As scope 3 emissions account for more than 90% of E.ON’s emissions, E.ON can improve its emissions reduction performance by bringing forward its net-zero objective for scope 3 emissions, and by setting more intermediary objectives to incentivise near-term action towards its long-term goals.

E.ON has more than 48 million customers across Europe. Although the company focuses on client solutions as the core of its overall strategy, it lacks a clear client engagement strategy. It has not implemented actions, such as information sharing or encouraging innovation, to influence clients to reduce their greenhouse gas (GHG) emissions. The company can improve its performance by creating a client engagement strategy that is governed by a clear policy and integrated into business decision-making.

E.ON has a comprehensive public trade association policy and a detailed review process to assess its membership associations for their climate policy positions. E.ON retains and engages with associations it does not align with to influence their positions. The company discontinues relationships if the associations do not change their stance. However, E.ON is a member, and its CEO the president, of Eurogas, which promotes the continued future use of fossil gas in the energy mix. E.ON can demonstrate stronger support for decarbonisation by severing its links with trade associations that hold a negative stance on climate policies.

E.ON has set a target to reduce its scope 1 and 2 emissions by 75% by 2030 and by 100% by 2040, compared to 2019. The company has also set a target to reduce its scope 3 category 3 (fuel and energy-related activities) emissions intensity by 75% by 2030 compared to 2019. It also plans to reduce scope 3 emissions by 50% by 2030 and by 100% by 2050 compared to 2019.

E.ON aims to invest USD 5.4 billion per year in low-carbon activities. However, E.ON’s scope 3 emissions still represent around 90% of its GHG emissions. Yet, it does not describe how it plans to achieve its scope 3 emissions reduction targets. Since customer solutions around electrification, digitalisation and decentralisation is one of the core business activities of the company, the lack of a clear strategy to reduce scope 3 emissions will hinder its transition.

Low-carbon sources accounted for more than 90% of E.ON’s energy generation in 2022. Further, E.ON’s low-carbon capital expenditure (CapEx) in 2022 accounted for 80% of its total CapEx. It had a 44% share of low-carbon energy sales and 90 GW of distributed renewable energy capacity connected to its grid in 2022. E.ON focuses its research and development (R&D) efforts on low-carbon technologies such as decentralisation, energy efficiency, smart home solutions, smart grids and efficient building technologies. It closed its last nuclear power plant in 2023 and now generates electricity only through its subsidiaries.

The company’s emissions intensity trend for its own energy generation between 2017 and 2022 decreased at a higher rate than that required by its 1.5°C pathway between 2022 and 2027. E.ON has continued to shift its core business model away from being an energy provider to becoming a customer solutions company by offering services such as onsite renewable energy from customer locations, e-mobility and home energy management systems.

The company is transitioning from being a traditional energy provider to becoming an energy services, infrastructure and solutions provider. While the company is prominent in energy networks and offers renewables such as rooftop solar PV at customer sites, the company’s scope 3 emissions account for more than 90% of its total emissions. The lack of a clear strategy to reduce scope 3 emissions creates an inconsistency that can hinder the company from being successful in a low-carbon economy.

The company commits to engaging in social dialogue with workers and unions. It also discloses the categories of stakeholders it engages with on a just transition, including consumers, communities and employees. Furthermore, the company demonstrates ongoing social dialogue and meaningful engagement with affected stakeholders, through ongoing engagement, face-to-face discussions as well as debates and interacting with trade unions. 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 is available in the public domain stating the company’s 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.

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, and it expects its business relationships to respect the ILO fundamental rights at work. Additionally, there is evidence that the company has a process to identify, assess and mitigate salient human rights risks in its own operations and supply chain. However, no evidence was found that the company discloses 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. However, no evidence was found to show that the company expects the same commitment of its business relationships. No evidence was found to show that the company has 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 age and gender. However, no relevant disclosure was found of additional indicators of workforce diversity. Nevertheless, the company commits to gender equality and women’s empowerment.

The company commits to protecting personal data. However, no evidence was found of a privacy statement regarding the collection, sharing and access to personal data. While the company discloses its global tax strategy, no relevant disclosure was found of 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. Furthermore, the company has a lobbying and political engagement policy, and it specifies that it does not make political contributions. Yet, no relevant disclosure was found of the company’s expenditure on lobbying activities.