For Sempra Energy, Sustainability is Part of Doing Business

Meghan French Dunbar January 3, 2015

Sempra Energy, based in San Diego, CA, is the holding company for both San Diego Gas and Electric Co. and Southern California Gas Co. Sempra has made a name for itself in the sustainability field, being listed on both the Dow Jones Sustainability Index and the Carbon Disclosure Project’s Leadership Index, all while employing over 17,000 people, serving more than 31 million people, and generating over $10 billion in revenue.

Meghan French Dunbar: What are the key areas that you focus on with Sempra’s Corporate Social Responsibility (CSR) program?

Molly Cartmill: At Sempra Energy, our business strategy itself is sustainable. We focus on developing lower-carbon energy resources because that’s where we think the future lies. It’s an approach that is responsible and profitable. So, we don’t really have what your readers might typically think of as a CSR “program.” Instead, corporate responsibility is baked into our approach to doing business, our behavior in the marketplace, and our commitment to reducing environmental impacts. My team focuses on issues, data, and reporting on our performance, as well as meeting the expectations of stakeholders.

Maren Keeley: What strategic advantage does having CSR baked into your overall business approach provide for Sempra?

MC: We track corporate performance in a wide range of areas – from safety and air emissions to customer satisfaction, water use, and philanthropy. I believe in the axiom that what gets measured gets managed. So, my department provides a mechanism through which we can measure and report on several key performance indicators. We also do something that I’m particularly proud of: when we find a gap or an area where information is lacking, we pull together people from across our company and develop an approach, a position, a policy, or a method of addressing the issue. It’s rewarding when a new approach or solution is adopted and put into practice. So, we provide a strategic advantage by working to stay ahead of issues and trends.

MFD: What effect do you believe the CSR program at Sempra has on the company’s bottom line?

MC: Investors and analysts are increasingly interested in environmental, social, and governance issues, as well as business performance in all of these areas. When investors want to know how we are managing risks associated with climate change, or how we are working with stakeholders while building new energy infrastructure, or if they want to compare us against others in our sector, a corporate responsibility report is quite useful. The effect is not always direct and measurable, but I think reporting differentiates Sempra Energy and effectively describes who we are and how we approach challenging issues. In today’s business world, that kind of transparency matters a lot.


MK: What do you consider to be your most successful CSR initiative?

MC: Sempra Energy’s corporate responsibility reporting is a big success. Our reporting has improved every year, from the focus and scope of reporting to the transparency and frankness in discussing challenges and risks. Company scores on investor-driven surveys also continue to improve year-over-year. A significant recent accomplishment was being named to the Dow Jones Sustainability World Index. That kind of steady incremental improvement says a lot about the team here at Sempra Energy.

 MK: What are the largest challenges that you face incorporating a CSR program at such a large organization?

MC: The first challenge is staying on top of a growing, changing business. Each time one of our business units forms a new business partnership, makes an acquisition, or opens an office in a new community, we need to understand what that means to our goals, our data collection and aggregation process, and our footprint. We need to make sure new employees understand the corporate responsibility function and related annual processes.

We’ve made strong progress – most of our employees know that we’re not about green washing or fluff. We aren’t interested in passing out glossy brochures. Here, it’s about each and every employee behaving responsibly. And for my team, it’s about authenticity – about telling it like it is here at Sempra.

As an example, this past year, for the first time, we included interviews with several members of our senior leadership team in our report. I think this can dramatically improve our employees’ understanding of corporate responsibility. How can we become a better, more responsive, cleaner, more strategic, and more service-oriented company? We need engaged employees to help us do that.

MFD: What advice do you have for someone who is just entering the world of CSR?

MC: While you may want to change the world (or at least your own company), recognize that there are many steps that you absolutely must take before you get to that point. Those who demand change for change’s sake will lose out every time. You can have a great idea, but in the business world you’ve got to have evidence and explain why something should be implemented – and that necessitates gathering data, comparing performance, and making a rational business case for why that idea should be implemented.

It’s also important to note that when you begin, you have to start with where you are right now, the data you have right now, and the goals you have right now. When you begin where you are, it will be authentic, transparent, and you will improve with each passing year. I see it as a process that never ends. Even the most progressive companies that have been practicing sustainability for 20 or more years have found that there is no end destination, no finish line. You simply start where you are and keep trying to improve, year-over-year, knowing you’ll never quite be done.

MK: What metrics do you find to be the most important?

MC: A major – and critical – challenge is determining what to measure. The answer to this question depends upon the organization, its sustainability context, and the issues of greatest relevance to its stakeholders. As you might imagine, greenhouse gas emissions are important for Sempra Energy because we’re an energy company – we own utilities and other businesses that generate power. So, we focus on reducing our impact on the environment. At Sempra, our carbon-dioxide emissions rate is about 40 percent below the national average. That means that for each megawatt of energy we produce, we’re emitting 40 percent fewer greenhouse gas emissions than a typical U.S. energy producer. That’s a pretty strong indicator of our priorities and our performance.

 MFD: As someone who leads such an impressive program, what insights do you have about quality leadership?

MC: Well, there are many companies that are much further along on the path than us and it’s great to look at those early leaders and get very inspired by their amazing accomplishments. I think that good leaders recognize that change doesn’t happen overnight; patience and perseverance are pretty important. You have to have a plan, set reasonable objectives around improvement, and be patient with yourself, your organization, and your people. When you do, the payoff can be incredible.

MK: What other CSR programs inspire you?

MC: I’m intrigued by the organizations that were the early adopters; many are now the recognized leaders in corporate sustainability. Some have moved toward integrated reporting, which involves a combined corporate responsibility and annual report. Some have led the way when new reporting protocols are introduced, like the GRI’s G4 . And some, like Novo Nordisk, just fascinate me anytime I hear them make a presentation at an industry conference because they have real expertise in what it means to be a sustainable enterprise.

Climate Action / Stakeholder Capitalism
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