NRG Energy

NRG aims to achieve net-zero scope 1, 2 and 3 (category 6) emissions by 2050 and to reduce its scope 1, 2 and 3 (category 6) emissions by 50% by 2025, compared to 2014. Neither of NRG’s targets are aligned with the company’s 1.5°C pathway. NRG should set intermediate targets at gaps of no more than five years to incentivise near-term actions on its longer-term goals. It should also clearly report base year emissions and activity data and any offsetting it intends to use to allow for a complete analysis of its targets and progress against them.

NRG’s emissions intensity increased between 2017 and 2022. During this period, NRG’s total scope 1 emissions decreased at a rate lower than the company’s reduction of its own energy generated, resulting in an increase in the emissions intensity for its own generation activities. The proportion of coal in the company’s generation mix remained fairly constant. To align with its 1.5°C pathway in 2027, NRG must reduce its emissions intensity by about 10% per year. NRG is projected to moderately exceed its total 1.5°C carbon budget for the period 2022-2037. Gas- and coal-fired generation are projected to account for about 40% of NRG’s generation, with the remaining future energy generation is expected to come from nuclear power sources. The company does not demonstrate plans to increase its renewable energy generation capacity.

NRG conducts research and development (R&D) in carbon capture, use and storage (CCUS). It also has R&D activities related to wind, solar and hydrogen power; energy storage; and the development of more efficient gas turbines. However, it is unclear whether any of these R&D activities relate to non-mature low-carbon technologies. NRG should disclose more details on its climate-related R&D spending in both mature and non-mature low-carbon technologies. To meet sectoral-level expectations, the majority of NRG’s total R&D investments should be dedicated to low-carbon technologies and energies.

NRG purchases 67% of its power for resale to customers, growing from about 4% in 2017. It does not disclose sufficient data on its purchased power for resale between 2017 and 2022. Therefore, alignment of the company’s emissions intensity for its purchased power for resale could not be assessed against its 1.5°C pathway. NRG should disclose the emissions or emissions intensities associated with its purchased power for resale, along with the use of any market-based measures. The company provides energy efficiency services to its commercial and residential customers, but it does not disclose its current revenue or its expected revenues from these services for the next five years.

NRG has set a target to achieve net-zero scope 1, 2 and 3 (category 6) emissions by 2050, supported by a target to reduce its scope 1, 2 and 3 emissions by 50% by 2025, compared to 2014. However, it is unclear whether these targets are reliant on the use of offsets.

NRG’s transition plan focuses on its operational emissions, aiming to reach net-zero scope 1, 2 and 3 (category 6) emissions in 2050. NRG also aims to provide sustainable energy products and solutions to its customers, allowing them to meet their sustainability goals. Further, the company has signed agreements for 2.4 GW of renewable power capacity through the use of PPAs, of which 45% are currently operational.

In 2022, about 81% of NRG’s electricity generation was from fossil fuels, with about 62% from coal-fired generation. NRG reports investing about 3% of its total R&D expenditure in CCUS. It also reports its R&D activities related to low-carbon technologies, which include wind, solar and hydrogen power and energy storage, but it is unclear for which technologies it is engaging in mature or non-mature R&D. In 2022, NRG reduced its scope 1, 2 and 3 (category 6) emissions by about 42% compared to 2014.

NRG’s emissions intensity increased between 2017 and 2022. Over this period, though NRG’s own energy generation reduced by about 25%, its total scope 1 emissions reduced by about 10%, with the proportion of coal in the generation mix remaining fairly constant. The proportion of purchased electricity for resale in NRG’s total delivered electricity grew from about 4% in 2017 to about 67% in 2022.

NRG lacks targets to expand its own renewable energy generation capacity. Purchased power for resale accounts for about 67% of NRG’s total delivered electricity, but emissions from the generation of this power are not captured by the company in its current targets. Although NRG reports signing PPAs for 2.4 GW of renewable power capacity, it does not report the amount or share of its delivered electricity that is covered by these agreements. It also does not demonstrate actions to expand these to transition and meet its current operating model.

The company publicly discloses a commitment to engaging in social dialogue with workers and unions. However, no relevant disclosure was found regarding the categories of stakeholders it engages with on a just transition. Nor was there any evidence to show the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the low-carbon 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 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 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 has a commitment to reskill and upskill workers and stakeholders affected by the low-carbon transition and discloses the actions it takes in this regard. 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.

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. The company discloses its process for understanding the alignment of its lobbying activities with policies and regulations that support the just transition. However, the company does not disclose where its lobbying activities do not align with the support of a just transition. 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.

While the company commits to respecting human rights, there was no evidence that it commits to respecting the ILO fundamental rights at work or that it expects its business relationships to respect the same commitment. No evidence was found of the company’s process to identify, assess and mitigate salient human rights risks in its own operations and in its supply chain. Further, 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 the company having a time-bound target for paying all workers a living wage. No evidence was found that the company discloses the proportion of its direct workforce covered by collective bargaining agreements or its required working hours. The company discloses some indicators of workforce diversity, including gender and race/ethnicity of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. The company commits to gender equality and women’s empowerment.

No evidence was found that the company commits to protecting personal data and that it has a privacy statement regarding the collection, sharing and access to personal data. No relevant disclosure was found of the company’s global tax strategy and the corporate income tax it pays in each relevant jurisdiction. The company does have a policy prohibiting bribery and corruption, and it includes corresponding clauses in its business relationship contracts. The company also has a lobbying and political engagement policy, but no public statement by the company could be found specifying that it does not make political contributions. No relevant disclosure was found of the company’s expenditure on lobbying activities.