Polska Grupa Energetyczna

PGE has set a target to reduce its scope 1 and 2 emissions by 80% by 2030 and by 100% by 2050, compared to 2020. In 2022, purchased power accounted for 37% of PGE’s sold electricity. However, PGE does not have a scope 3 category 3 (fuel and energy-related activities) emissions target. PGE’s targets could not be assessed as the company states that it plans to use offsets, but it is unclear what percentage of the targets will be achieved through these offsets. Further, it has not set sufficient intermediate targets. Setting regularly spaced intermediate targets will help the company incentivise near-term action on its longer-term goals.

PGE focuses its R&D efforts on technologies such as solar power, wind power, battery storage and smart integration. However, with the high level of coal and fossil gas capacity in its future scenarios, PGE will need to research, invest in and implement CCS at scale. Further, the company does not disclose financial information on its climate or non-climate related R&D spending. R&D expenditure on low-carbon technologies will be essential for PGE to develop a low-carbon product portfolio and be successful in a low-carbon economy.

More than a third of PGE’s sold electricity comes from the company’s purchased power for retail. As a consequence, engaging with its suppliers is integral to the company working towards emissions reduction in its value chain. Regardless, no evidence was found to suggest the company engages with suppliers on climate change issues or greenhouse gases (GHG) emissions reduction through strategies, initiatives or partnerships. The company should develop a comprehensive supplier engagement strategy to influence its suppliers to eliminate emissions.

The company does not have a comprehensive and public trade association policy. In fact, the company has a history of undermining action on climate. PGE is a member of Euracoal and Eurogas which advocate for coal and fossil gas respectively. The company itself opposes the rapid phase-out of coal in Europe and promotes the role of fossil gas. Additionally, the company has shown opposition to the European Union’s Emissions Trading System. PGE needs to demonstrate stronger support for decarbonisation by publicly supporting low-carbon policies and severing its links with trade associations that hold a negative stance on climate policies.

PGE has set a target to reduce its scope 1 and 2 emissions by 80% by 2030 and by 100% by 2050 compared to 2020. In 2022, low-carbon sources accounted for 4% of PGE’s energy capacity, and it plans to increase this to 50% in 2030 and 100% in 2050. PGE also plans to phase out coal by 2049. However, the company’s current and planned reliance on coal, coupled with a lack of clear disclosure on offsets, cast doubt on its commitment to transition. Moreover, PGE is projected to significantly exceed its 1.5°C carbon budget for the period 2022-2037.

By 2030, PGE expects renewables to account for 25% of its revenues and 50% of its investments. The company is also targeting low-carbon sources to comprise a 50% share of its energy portfolio by 2030 and 100% by 2050. Further, it plans to build 2.5 gigawatts (GW) of new energy capacity in offshore wind farms by 2030 and 6 GW by 2040, followed by 3 GW in solar photovoltaic (PV) energy, 1 GW in onshore wind farms and 800 megawatts (MW) of energy storage to support large-scale projects.

In 2022, 14% of the company’s energy generation was from low-carbon sources, mainly hydroelectricity. However, even though PGE is developing low-carbon business models, only 11% of the company’s revenue is generated from low-carbon products and services. The company’s low-carbon capital expenditure (CapEx) in 2022 accounted for 47% of its total CapEx. This is far below the sectoral-level expectation of 95% of a company’s total CapEx. The company is focusing its R&D efforts on battery storage, solar and wind power and efficient transmission technologies. It is also exploring non-mature technologies such as smart grid integration.

PGE’s emissions intensity trend for its own energy generation decreased between 2017 and 2022. However, the company needs to continue reducing this emissions intensity by approximately 17% per year to stay aligned with its 1.5°C pathway in 2027. Its emissions intensity associated with its purchased power for resale between 2017 and 2022 could not be assessed as PGE does not provide sufficient data.remained static between 2017 and 2022. To align with its 1.5°C pathway in 2027, it needs to reduce this emissions intensity by about 15% per year.

The company plans to grow the share of renewables from 4% of its energy capacity in 2022 to 50% by 2030 and 100% by 2050. However, the company’s emissions reduction targets and transition planning are hindered by its significant current and future reliance on coal. The company’s planned coal phase-out date far exceeds the recommended date of 2035 as per the International Energy Agency’s (IEA) Net Zero Emissions by 2050 (NZE) sSenario for developed countries. The company’s current generation from fossil fuel sourcesand lack of a scope 3 emissions target is also inconsistent with its 1.5°C pathway.

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 local government officials, employees, energy-sectors firms, and representatives of business and social organizations. However, 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 has a commitment to create and support access to green and decent jobs as part of the low-carbon transition. Furthermore, it discloses the actions it takes to impulse more than 7,000 jobs with the development of offshore wind farms. However, 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 re- and up-skill workers and stakeholders affected by the low-carbon transition and discloses the actions it takes in this regard. For instance, it offers re-training for employees in the conventional energy sector. 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. 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. However, no evidence that the company commits to respecting the ILO fundamental rights at work, nor does it expect its business relationships to respect the same commitment. Moreover, 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 was found of the company disclosing the stakeholders whose human rights have been affected by its activities. Furthermore, no evidence was found of the company having 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. 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. 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 specifies that it does not make political contributions, no evidence was found of the company’s lobbying and political engagement policy as well as expenditure on lobbying activities.