Southern Company

Southern Company has set targets to reduce its scope 1 emissions by 50% by 2030 and by 100% by 2050, compared to 2007. While the company is currently on track to meet its targets, they lack sufficient ambition. The International Energy Agency (IEA) recommends that electricity generation companies in advanced economies should aim for net-zero emissions by 2035. To improve its performance, Southern Company needs to bring forward its scope 1 target and set a zero scope 3 emissions target. The company should also clearly state any offsets it would use to achieve these targets.

Southern Company’s emissions intensity for its purchased power decreased significantly between 2019 and 2022. However, to align with its 1.5°C pathway, the company is required to reducing its emissions intensity more rapidly, by approximately 9% per year. Similarly, although the company’s own generated emissions intensity has decreased between 2017 and 2022, this rate of reduction is insufficient to align with its 1.5°C pathway. This is likely due to the company’s continued reliance on gas. The company must ensure that the emissions intensities for both its generated and purchased power are reducing at the rate required by its 1.5°C pathway.

Southern Company’s own generation accounts for 91% of the company’s sold electricity. As a consequence, engaging with its customers is an important part of engaging its value chain. The company has a range of business and residential energy efficiency products. It also works with customers to determine the best solar energy option and offers the ability to purchase renewable energy credits. The company can improve on these individual programmes by developing a comprehensive strategy which would influence, enable or otherwise shift customer choice and behaviour to reduce greenhouse gas (GHG) emissions.

Southern Company has a public engagement policy that requires a quarterly review of whether its membership associations are aligned with its net-zero goal and an annual board-level review of its lobbying activities. The policy states that where an association is not aligned, the company will advocate for change or terminate its membership. Despite this strong policy, Southern Company supports multiple associations that have climate-opposed positions, including being on the board of the American Gas Association. This is particularly concerning given the company has historically been accused of funding work to undermine climate science. To improve its performance, the company should terminate its memberships in associations with climate-opposed positions.

Southern Company aims to reduce its scope 1 emissions by 50% by 2030 and by 100% by 2050 compared to 2007. The company has not set any scope 3 emissions reduction targets.

To achieve its goals, Southern Company intends to have 17 GW of renewable assets online by 2030. The company also plans to continue reducing its coal-powered generation by half by 2028 compared to 2022. However, the company has not committed to reducing its reliance on gas, which currently accounts for just over half of the company’s electricity generation.

In 2022, Southern Company invested 71% of its capital expenditure (CapEx) in low-carbon technologies, which falls short of the sectoral expectation of 95%. The company reports its R&D investment in carbon capture, advanced nuclear power, residential-scale distributed generation and renewable energy developments, such as tall tower wind energy. However, the proportion of the company’s total R&D allocated to low-carbon technology could not be determined.

Southern Company’s emissions intensity trend has decreased between 2017 and 2022 and is projected to continue to decrease until 2027. However, the company’s rate of emissions reduction is insufficient to align with its 1.5°C pathway. In 2023, Southern Company opened Vogtle Unit 3, the first new nuclear unit built in the USA in 30 years.

Southern Company has the potential to transition rapidly. The company is making significant investments in low-carbon technology, has set ambitious renewable capacity targets, has plans to reduce coal power generation, and has recently opened a major new nuclear facility. However, the company’s scope 1 emissions targets lack sufficient ambition, allowing the company to maintain its dependence on gas and preventing it from achieving rapid emissions intensity reductions.

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 communities and affected stakeholders. However, no evidence was found to demonstrate the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. The company incorporates social dialogue and stakeholder engagement in its just transition planning. However, no evidence was found that the company has a set of time-bound, measurable indicators to mitigate the social impacts of the low-carbon transition on workers, affected stakeholders and its business relationships.

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 support training and provide opportunities for those who are going to be affected by their fleet’s 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 re- and up-skill workers and stakeholders affected by the low-carbon transition and discloses the actions it takes in this regard. For instance training and creating opportunities for workers to reskill and obtain new jobs in the transition. 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 processes for understanding the alignment of its lobbying activities with policies and regulation that support the just transition, however, 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.

No policies or commitments of the company related to respect for human rights were found in the public domain. This includes the necessary policies and systems by which the company can ensure respect for basic human rights in its operations and supply chain. However, the company has a grievance mechanism available to workers and external stakeholders.

The company commits to worker health and safety. The company does not, however, and it does not disclose information on collective bargaining. The company does provide some information workforce diversity fundamentals. However, the company can strengthen its disclosure on these subjects, as well as on its living wage and working hours practices, as well as gender equality.

The company commits to personal data protection, and it has policies regarding anti-bribery and anti-corruption, responsible tax practices and responsible lobbying and political engagement. The company does also disclose its expenditure on lobbying activities. However, the company can strengthen its disclosure on these subjects.