Engie is a publicly listed semi integrated company headquartered in France. In 2020, it had USD 68.09 billion in revenue and a reported 171,000 employees*. Engie’s main business areas include electricity, natural gas and energy services. The company has plans for greening its gas supplies with biomethane and hydrogen and aims for net-zero emissions by 2045, but it lacks disclosure on emissions.
Since the Electric Utilities Benchmark assessment in 2020, Engie has significantly stepped up the ambition of its targets. It now aims for net-zero emissions for all scopes by 2045, as compared to its previous target for an 80% reduction by 2050. This target relies on significant decarbonisation of gas networks through biomethane and other biogases. These technologies are unproven at scale and so it is likely that much of the company’s efforts towards transitioning away from natural gas will be planned closer to the end date of 2045. Rapid growth of its renewables and low-carbon client services businesses cannot make up for any delay or failings in the decarbonisation of Engie’s gas business.
Engie’s client solutions model is an advanced example of a bespoke, client-based approach to energy services. Engie earns one-third of its revenues from client services and is currently setting up a new division called Bright. It intends to sell Bright within a few years in order to reinvest in its energy transition.
Engie’s current reliance on natural gas and on technologies that are unproven at scale to decarbonise its gas portfolio, are uncertain areas of its low-carbon transition plan. The company has largely divested its coal assets and sees natural gas as a transition fuel with stable demand until 2040. These assumptions and its existing gas-based asset portfolio leaves the company dependent on a large-scale transition to green gas, which is by no means assured.
Engie aims to decarbonise its main suppliers by 2040. To this end, it is a strong proponent of science-based targets (SBTs) and has recently implemented a strong corporate social responsibility (CSR) compliance process. Its compliance partner EcoVadis assesses all of Engie’s suppliers across 21 criteria. The company regularly reviews the CSR dashboards for 250 preferred suppliers and 1,400 major suppliers. At the end of 2019, 12 of Engie’s preferred suppliers had set SBTs and a further ten had committed to setting them.
Engie receives a trend score of =. If the company were reassessed in the near future, its score would likely remain the same. Although it plans to reduce coal generation by 60% by 2023 and is developing 3-4 GW of renewable energy per annum, its plans for greening its gas will likely have significantly less impact within the next two years. If the company is unsuccessful in its attempt to add gas power plants to the EU Taxonomy, this may lead to pressure to increase the speed of its transition to green gas. Conversely, there is a risk that inclusion of natural gas in the EU Taxonomy may lead Engie towards complacency.
Engie has committed to net-zero emissions by 2045 and to exiting coal by 2027. It is ramping up annual growth in renewables to 6 gigawatts (GW) by 2026, and will reach a total capacity of 80 GW of renewables in 2030. Engie is also developing a green hydrogen business and is planning to install 4 GW of electrolyser capacity by 2030.
Engie is already well established in the client solutions sector and is decarbonising its electricity portfolio. The company will grow both these areas significantly while exiting coal. Engie’s low-carbon transition plan is also heavily reliant on transitioning from natural gas to green gas, but it is not clear how realistic this plan is.
Engie is developing an approach to assess client-avoided emissions to determine its impact and is working with the EU on its Sustainable Finance Taxonomy which Engie supports. The company allocates carbon budgets to all activities and uses a carbon price for all decision-making.
Engie’s plans are consistent with its net-zero commitment, apart from its significant reliance on natural gas. Many companies justify continuing investment in natural gas due to scenarios that favour it. Engie is working to include natural gas in the EU Taxonomy as a transition fuel for countries heavily reliant on coal.
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EUR 55.75 billion (USD 68.09 billion)
Publicly listed with with 24% owned by the French government