Xcel Energy

Xcel has set a target to reduce its scope 1 and scope 3 category 3 (fuel and energy-related activities) emissions by 80% by 2030 and by 100% by 2050, compared to 2005. However, the company has not set sufficient intermediate targets. Setting regularly spaced intermediate targets will help the company incentivise near-term action on its longer-term goals. Xcel’s targets could not be assessed in the benchmark as the company states that it plans to use offsets but does not quantify them. The company should clearly report any offsets it intends to use to allow for a complete analysis of its targets and progress against them. Xcel can also improve its efforts by bringing forward its zero emissions target to 2035 to be consistent with the International Energy Agency’s (IEA’s) recommendation for companies in advanced economies.

Xcel focuses its research and development (R&D) efforts on technologies such as wind, solar, and geothermal energy; long-duration storage; demand efficiency; green hydrogen; renewable natural gas; nuclear fission; and carbon capture, use and storage (CCUS). It also plans to focus on non-mature technologies such as nuclear fusion. However, 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 Xcel to develop a low-carbon product portfolio and be successful in a low-carbon economy.

Xcel’s emissions intensity for its purchased power for resale between 2017 and 2022 could not be assessed. Despite relying on purchased power for resale for more than 30% of its delivered power, the company does not provide sufficient data on the generation sources and associated emissions of this power. Xcel can improve in this area by transparently reporting figures for its power purchased for resale by generation source and associated emissions.

Xcel has a comprehensive, public trade association policy and a detailed review process to assess the climate policy positions of associations it is a member of. Xcel tries to influence trade associations it does not align with to influence their positions. However, it is a member of the American Gas Association (AGA), which promotes the use of fossil gas in the future energy mix. Furthermore, Xcel’s Chief Operating Officer is a board member of AGA. Xcel can demonstrate stronger support for decarbonisation by severing its links with trade associations that hold a negative stance on climate policies.

Xcel has set a target to reduce its scope 1 and scope 3 category 3 (fuel and energy-related activities) emissions by 80% by 2030 and by 100% by 2050, compared to 2005. It plans to have 53% low-carbon sources in its energy generation mix by 2025 and 67% by 2030, from 40% in 2022. Xcel also plans to phase out coal by 2034.

Xcel plans to expand its renewables capacity by 10,000 megawatts (MW) over the next decade, from 11,000 MW in 2022. It also plans to prolong the lifetime of its nuclear plant by ten years. Further, the company will invest USD 2-4 billion in green hydrogen by an unspecified date and USD 2 billion in electric vehicle (EV) charging by 2030. Xcel aims to have 1.5 million EV charging points by 2030 and bring its sustainable biomass plant online by 2029.

In 2022, low-carbon sources accounted for 40% of the company’s energy generation. Xcel is focusing its R&D efforts on technologies such as wind, solar and geothermal power; long-duration storage; demand efficiency; green hydrogen; renewable natural gas; nuclear fission; and CCUS. Xcel had USD 5.4 billion in green bonds for wind energy in 2022. Yet, the company’s low-carbon capital expenditure (CapEx) in 2022 accounted for only 8% of its total CapEx.

The company’s emissions intensity for its own energy generation between 2017 and 2022 decreased significantly due to an increase in wind generation and reduction in fossil fuel share. However, Xcel’s emissions intensity trend for its purchased power for resale between 2017 and 2022 could not be assessed due to a lack of reported data. Despite relying on purchased power for resale for more than 30% of its delivered power, the company does not provide sufficient data on the generation sources for this power.

Xcel plans to grow the share of low-carbon sources in its energy generation mix from 40% in 2022 to 67% by 2030. However, Xcel’s emissions reduction targets and transition planning are hindered by its insufficient low-carbon CapEx and lack of R&D investment. Xcel’s significant reliance on coal and fossil gas is inconsistent with the company’s low-carbon commitments for the future. Unless it rapidly reconsiders this reliance on fossil fuels, it is unlikely that Xcel will be successful in a low-carbon economy.

There is no evidence that the company commits to engaging in social dialogue with workers and unions. The company does, however, discloses the categories of stakeholders it engages with on a just transition, including community leaders, local government, economic development groups and other affected stakeholders. Furthermore, the company demonstrates ongoing social dialogue and meaningful engagement with affected stakeholders, through a unit management that was established to help create open dialogue in plant closures.The company demonstrates engagement in social dialogue and with stakeholders in its just transition planning. The company however, does not have evidence of time-bound indicators to mitigate the social impacts of the 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 create union construction jobs in wind power. The company also discloses the measures it takes to ensure that these jobs embed equality of opportunity for women and vulnerable groups. It does this through engaging with universities and womens groups and provides and retains women in new roles. However, 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 displaced by the low-carbon transition. The company’s process for identifying skills gaps for workers and affected stakeholders involves identifying skills needed within positions at plants, and skills needed to move into new positions for when plants transition away from coal. Additionally, no evidence was found that the company re- and up-skills workers in a way that ensures gender balance and inclusion of vulnerable groups.

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. However, there is evidence that the company contributes to social protection gap when transitioning away from carbon activities.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 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.  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 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, gender and race/ethnicity. However, no relevant disclosure was found of additional indicators of workforce diversity.

The company does not have a policy stating it protects personal data. Additionally, no evidence was found of a privacy statement regarding the collection, sharing and access to personal data. The company does not disclose its global tax strategy, there is, however, disclosure 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, yet, no relevant disclosure was found of the company’s expenditure on lobbying activities.