Tenaga Nasional

Tenaga is aiming to reduce its emissions intensity from its own energy generation by 35% by 2035 compared to 2020. Additionally, it has an “aspiration” to reach net-zero emissions by 2050. However, these targets are not aligned with the company’s 1.5°C pathway. To align, the company should aim to reduce its emissions intensity by over 80% by 2035. Additionally, the company should set intermediate targets at gaps of no more than five years to incentivise near-term action on its longer-term goals.

Tenaga has not made any significant reductions to the emissions intensity from its own energy generation between 2018 and 2022. Although the company has increased its renewables capacity over this period, its gas capacity has also increased. Based on its current and planned assets, the company’s emissions intensity is projected to reduce over the next five years, but not at a rate sufficient to align with its 1.5°C pathway. Tenaga is projected to significantly exceed its 1.5°C carbon budget over the period 2022-2037 due to continued reliance on fossil fuel-powered capacity.

Tenaga Nasional demonstrates elements of transition planning; however, it has not developed an explicit low-carbon transition plan. The company should establish a time-bound action plan that outlines how it will transition to a low-carbon economy. The plan should include medium- and long-term targets, verifiable and quantifiable key performance indicators and financial commitments. The plan should also be informed by scenario analysis to ensure its ambition is sufficient to align with a 1.5°C pathway.

Tenaga has an “aspiration” to achieve net-zero emissions by 2050. The company is targeting a 35% reduction in the emissions intensity of its own energy generation. It also aims to halve its coal-based energy capacity by 2035 compared to 2020. Additionally, it is planning to reach 8.3 gigawatts (GW) of installed renewable energy capacity by 2025.

Tenaga identifies three pillars to its “carbon management”: reduce emissions by phasing out coal (including replacing coal with gas) and increasing renewables capacity, use carbon capture and storage (CCS) to decarbonise fossil fuel assets, and offset emissions using carbon credits.

Tenaga continues to expand its renewables and gas capacity, alongside planning the reduction of its coal-based energy generation capacity. The company is developing smart grids with plans to reach a smart grid index of 85% by 2025. It is also collaborating with Petronas to develop CCS and hydrogen infrastructure.

Tenaga increased its renewables capacity by 11% between 2019 and 2022; however, this increase has mostly been offset by its increased gas capacity. As a result, the company’s emissions intensity from its electricity generation has not decreased significantly in recent years. This contrasts with the company’s 1.5°C pathway, which requires it to make substantial decreases in its emissions intensity.

Tenaga is taking some actions to reduce its emissions. However, these actions are not ambitious enough to align with its 1.5°C pathway. The company is taking significant action to halve its coal capacity by 2030. At the same time, it is replacing many of these plants with new gas facilities, which risks locking in future emissions.

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 to show the company undertakes 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 create new jobs for its hydropower plant in Malaysia. 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 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. For instance, it offers reskilling programmes to train meter operators on ways to install and collect readings from smart meters. 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.

No evidence 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.

No evidence that the company commits to respecting the health and safety of its workers, nor does it expect the same commitment of its business relationships. Moreover, 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.

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. 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. No evidence that the company has a lobbying and political engagement policy, nor does it specifies that it does not make political contributions. No relevant disclosure was found of the company’s expenditure on lobbying activities.