Climate Change Data

Environmental Metrics

ESG Focus Areas

• Water Quality
• Customer Service
• Community Support
• Employee Safety and Well-being
• Shareholder Value
• Environmental Stewardship

Environmental Achievements

• Installed 16 large air diffusers in Bear Gulch Reservoir to reduce algae growth and improve water quality.
• Reduced outside laboratory fees by $100,000 annually by conducting more tests in-house.
• Installed emergency interconnections with other agencies to improve water system reliability.
• Implemented a systematic main replacement program to replace aging water mains.
• Increased spending with qualified WMDVBE suppliers to 18.7% of total spending.
• Reduced volatile organic compounds released into the air by 75% during interior tank coating projects.
• Implemented a hydraulic turbine to recover energy as water flows downhill, generating an estimated 2 million kilowatt-hours annually.
• Reduced power costs by optimizing energy tariffs with PG&E and SCE.
• Reduced water loss company-wide to 6%.

Social Achievements

• Contributed nearly $700,000 to charitable organizations.
• Introduced the Cal Water Cares hardship grant program to assist customers facing financial difficulties.
• Implemented a Low-Income Rate Assistance (LIRA) program.
• Developed an enhanced customer survey process.
• Redesigned website with self-service options and enhanced online billing.
• Expanded Mobile Workforce program to improve efficiency and response times.
• Revamped Injury/Illness Prevention Program and updated safety training programs.
• Enhanced security and added ergonomic workstations in Customer Centers.
• Implemented a Management Trainee Program (MTP).
• Introduced a scholarship program for students in Cal Water's service areas.

Governance Achievements

• Strong corporate governance rating from a large shareholder voting advisory firm.
• Code of ethics and insider trading policy.
• Clawback and anti-hedging policies for executives.
• Separate Board committee for risk management.
• Enhanced Board role for independent lead director.
• Annual “say on pay” stockholder vote on executive compensation.
• Majority voting for electing directors.
• Board and Committee charters that ensure proper oversight.
• Effective system of internal controls.

Climate Goals & Targets

Environmental Challenges

• Compliance with the new California standard for chromium-6.
• Economic difficulties for many customers.
• Aging water main infrastructure.
• Climate change impacts on water supply and demand.
• Non-revenue water loss.

Mitigation Strategies

• Investigating cost-effective treatment methods for chromium-6.
• Introducing hardship grant program and LIRA program.
• Systematic main replacement program and infrastructure upgrades.
• Risk assessment report on regional impacts of climate change.
• Auditing systems using dataloggers to detect leaks, deploying correlator tools to pinpoint leak locations, and testing/calibrating production meters.

Supply Chain Management

Responsible Procurement

• Supplier diversity program to ensure open and competitive bidding process for goods and services.

Climate-Related Risks & Opportunities

Physical Risks

• More frequent or severe droughts, heat waves, and storms.
• Decreased Sierra Nevada snowpack.

Awards & Recognition

• Top Workplace in the Bay Area (three years in a row)

Environmental Metrics

ESG Focus Areas

• Water conservation
• Water quality
• Customer service
• Community support
• Employee well-being
• Environmental stewardship
• Groundwater management
• Corporate governance

Environmental Achievements

• Exceeded state-mandated 25% water use reduction target by achieving 26.8% reduction.
• Constructed 10 treatment plants to comply with chromium-6 drinking water standard.
• Replaced 16 miles of water main in 2015 and 46 miles in 2016 to reduce water loss and mitigate environmental risks.
• Implemented a tank overflow dechlorinating assembly to protect wildlife from chlorinated water overflows (patented).

Social Achievements

• Ranked “Highest in Customer Satisfaction Among Water Utilities in the West” by J.D. Power.
• Named a Top Workplace in the Bay Area for the fifth consecutive year.
• Certified as a Great Place to Work® by the Great Place to Work® Institute.
• Provided $73,795 in scholarships and hardship grants.
• Donated land for affordable housing and recreational area for low-income families and veterans.
• Expanded college scholarship program to Hawaii and Washington.

Governance Achievements

• Achieved an overall corporate governance score of “1” (highest possible) from ISS Governance Quickscore 3.0.
• Increased annual dividend for the 49th consecutive year.
• Entered into a settlement agreement with the CPUC authorizing $658.8 million in capital improvements over three years.

Climate Goals & Targets

Environmental Challenges

• California drought and mandatory water-use reductions.
• Increasingly stringent water quality standards (chromium-6, TCP, PFOS/PFOA).
• Aging water infrastructure.
• Groundwater depletion.

Mitigation Strategies

• Implemented robust drought management program, exceeding state targets.
• Proactively addressed water quality challenges through treatment plant construction and research.
• Accelerated water main replacement program.
• Participated in groundwater sustainability agencies and implemented water supply reliability projects.
• Developed cost-effective strategies for increased drought resiliency.

Supply Chain Management

Responsible Procurement

• Competitive bidding process including diverse suppliers.
• Master contracts for underground construction services.
• Regional bidding for construction materials.

Climate-Related Risks & Opportunities

Physical Risks

• Drought

Sustainable Products & Innovation

• Tank overflow dechlorinating assembly

Awards & Recognition

• J.D. Power Award
• Top Workplace Award
• Great Place to Work® Certification

Environmental Metrics

ESG Focus Areas

• Water Quality
• Customer Service
• Affordability
• Community Support
• Employee Well-being
• Stockholder Returns
• Environmental Stewardship

Environmental Achievements

• Reduced hazardous waste generated company-wide in 2017 to 1,360,214 pounds (52% of 2016 amount)
• Reduced groundwater pumping in Bakersfield District in 2017 by 560 million gallons over 2015
• Completed construction of recycled water meter for Apple campus, delivering over 157,000 gallons/day
• Completed installation of fish ladder in Bear Gulch Creek to protect steelhead trout
• Installed 128,700 feet of new or replacement water pipelines to reduce water loss
• 29% of electricity obtained from the state electric grid in 2017 was from renewable sources

Social Achievements

• Awarded $120,000 in college scholarships to students
• Partnered with Cristo Rey Jesuit High School for work-study program
• Expanded annual internship program for college students
• Named a Top Workplace in the Bay Area for the seventh consecutive year in 2018
• Named a Great Place to Work® for the second year in a row in the fall of 2017
• Reduced Total Case Incident Rate (TCIR) by 61% company-wide in the past five years
• Donated $832,000 to more than 320 local community organizations and students in 2017

Governance Achievements

• Improved cyber security through various initiatives (SIEM tool, intrusion prevention system upgrades, etc.)
• Implemented a comprehensive Injury and Illness Prevention Program
• Established a confidential risk/ethics hotline in 2018
• All employees receive annual anti-corruption training on the Code of Conduct

Climate Goals & Targets

Environmental Challenges

• Higher-than-normal TOC levels in Kern River impacting water treatment
• Meeting increasingly stringent water quality and environmental standards
• Supply chain disruptions due to climate events
• Maintaining affordability while upgrading infrastructure

Mitigation Strategies

• Adjusted disinfection, modified storage tank levels, installed pilot GAC treatment unit in Kern River Valley
• Consolidated rates of smaller service areas with larger ones
• Decreased revenue needed in California service areas due to lower federal corporate tax rate
• Offered payment arrangements, payment extensions, and hardship grants to customers
• Implemented aggressive asset management programs to reduce water loss

Supply Chain Management

Responsible Procurement

• Supplier diversity program, strategic sourcing program

Climate-Related Risks & Opportunities

Physical Risks

• Impacts on water demand and supply due to climate change

Awards & Recognition

• Supplier Diversity Champion of the Year by Asian, Inc.
• Distinguished Supplier Diversity Award from the U.S. Department of Commerce’s Minority Business Development Agency
• Honored by the U.S. Veterans Business Alliance
• 2018 Diversity Award by the American Water Works Association

Environmental Metrics

ESG Focus Areas

• Environmental Stewardship
• Social Responsibility
• Corporate Governance
• Climate Change

Environmental Achievements

• Reduced total energy consumption by nearly 8%
• Replaced 145,881 feet of water main to prevent water loss
• Saved 204 million gallons of water annually through conservation devices

Social Achievements

• Donated more than $1.25 million to local charitable organizations
• Completed necessary changes to comply with the California Consumer Privacy Act
• Updated Supplier Code of Conduct

Governance Achievements

• Launched a new, secure fraud and ethics reporting hotline
• Established an Enterprise Risk Management, Safety, and Security Board Committee
• Added Social Responsibility and Sustainability to the Nominating and Corporate Governance Committee’s responsibilities

Climate Goals & Targets

Environmental Challenges

• Uncertainty of timing, location, and impact of climate change effects on water availability, seawater intrusion, wildfire and flood risks to facilities, and changes to water use patterns.
• Potential contribution to climate change through greenhouse gas production.

Mitigation Strategies

• Diversifying water supplies, identifying alternative sources, utilizing conservation, updating water shortage contingency plans, monitoring current supplies.
• Researching groundwater banking and other supply augmentation techniques.
• Focusing on cost-effective measures to lower greenhouse gas footprint.
• Annual risk analyses by the Enterprise Risk Management team with input from the Water Resource Sustainability Department.

Supply Chain Management

Responsible Procurement

• Updated Supplier Code of Conduct requiring vendors to refrain from conflicts of interest, ensure safe workplaces, manage environmental risks, conserve natural resources, protect human rights, and prohibit forced labor.

Climate-Related Risks & Opportunities

Physical Risks

• Variations and reductions in water availability
• Seawater intrusion into coastal aquifers
• Wildfire and flood risks to facilities and customer properties

Reporting Standards

Frameworks Used: SASB (Sustainability Accounting Standards Board), TCFD (Task Force on Climate-Related Financial Disclosures)

Awards & Recognition

• Great Place to Work® (4th year in a row)
• Top Workplace in the Bay Area (8th consecutive year)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Energy
• Emissions
• Water Supply Management
• Reliability
• Resilience
• Water System Efficiency
• End-Use Conservation
• Environmental Management
• Compliance
• Community Support
• Drinking Water Quality
• Customer Safety
• Water Affordability
• Access
• Cybersecurity
• Data Privacy
• Customer Service
• Diversity
• Equality
• Inclusion
• Talent Attraction
• Retention
• Training
• Development
• Labor Relations
• Management
• Workplace Health
• Safety
• Corporate Governance
• Ethics
• Public Policy
• Political Involvement
• Responsible Sourcing

Environmental Achievements

• Reduced Cal Water greenhouse gas emissions by 64% from the 2000 baseline.
• Increased percentage of energy consumption supplied from renewable energy sources to 36% for Cal Water and 56% for Hawaii Water.

Social Achievements

• Donated over $2.1 million to local nonprofit, community, and philanthropic organizations.
• Enrolled 111,287 customers in the CAP program (formerly LIRA), offering over $12.7 million in discounts.

Governance Achievements

• 100% of Board members attended the Annual Meeting.
• Zero confirmed incidents of corruption.

Climate Goals & Targets

Environmental Challenges

• Limited ability to make investments to reduce emissions due to regulatory constraints.
• Data limitations and inconsistencies across different subsidiaries and years.

Mitigation Strategies

• Focusing on controllable aspects of climate change strategy and advocating for regulatory progress.
• Improving data collection and calculation methodologies over time.

Supply Chain Management

Responsible Procurement

• 21% of net procurement spending on diverse suppliers (Cal Water)

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Updated greenhouse gas emissions inventory in accordance with the Greenhouse Gas Protocol; commitment to setting absolute, science-based Scope 1 and Scope 2 emissions reduction targets by Q3 2024
• Investment of $328 million in infrastructure to improve resiliency, water quality, and sustainability
• Wildfire mitigation projects (backup generators, fire breaks)

Social Achievements

• Investment of more than $6.1 million in water conservation rebates and programs, saving an estimated 180 million gallons of water annually
• Contribution of $1.58 million to charitable organizations
• Local community events to assist low-income customers

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Named one of “America’s Most Responsible Companies” and “America’s Most Trustworthy Companies” by Newsweek and a Great Place to Work®

Environmental Metrics

ESG Focus Areas

• Reducing contributions to climate change through mitigation efforts
• Understanding and planning for climate change impacts
• Collaboration and advocacy through customer education and stakeholder engagement
• Setting time-bound goals, including Scope 1 and Scope 2 GHG emissions reduction targets
• Maturing ESG reporting

Environmental Achievements

• Increased renewable energy consumption from <1% in 2021 to 9% in 2022
• Developed a custom Energy Management System (EMS) guided by ISO 50001
• Conducted energy audits to identify energy optimization strategies
• Completed a study to evaluate and plan for EV charging station infrastructure needs

Social Achievements

• Hosted 17 community Emergency Operations Center training events in 2023
• Activated Emergency Operations Centers and regional Operations Rapid Response Teams to respond to emergency events

Governance Achievements

• Board approved climate change strategy in 2021
• Commitment to set absolute, science-based Scope 1 and Scope 2 GHG emissions reduction targets by end of Q3 2024

Climate Goals & Targets

Environmental Challenges

• Scope 3 GHG emission reduction challenges due to regulated business model and infrastructure investment needs
• Balancing infrastructure investment with emissions reduction

Mitigation Strategies

• Analyzing spending in Capital Goods and Purchased Goods and Services categories to identify emissions-intensive suppliers
• Developing a strategy in 2024 to engage with suppliers on emissions data and reduction initiatives
• Expanding Scope 3 emissions inventory to include remaining material categories

Supply Chain Management

Responsible Procurement

• Engaging with suppliers on emissions data and reduction initiatives (planned for 2024)

Climate-Related Risks & Opportunities

Physical Risks

• Drought
• Wildfire
• Flooding
• Sea level rise

Reporting Standards

Frameworks Used: Greenhouse Gas Protocol

Awards & Recognition

• EPA 2023 WaterSense® Excellence in Promoting WaterSense Labeled Products Award

Environmental Metrics

ESG Focus Areas

• Protecting the planet
• Serving customers
• Engaging the workforce

Environmental Achievements

• Not disclosed

Social Achievements

• Low-Use Water Equity Program proposed to assist low-water-using, lower-income customers

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• PFAS contamination costs

Mitigation Strategies

• Pursuing financial recovery from responsible parties; proceeding with compliance efforts for new EPA regulations on PFAS

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Sustainability Accounting Standards Board Water Utilities & Services Industry Standards, Recommendations of the Task Force on Climate-Related Financial Disclosures, Global Reporting Initiative Standards

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Water infrastructure investment
• Community well-being
• Sustainability initiatives
• Reliable and affordable water service

Environmental Achievements

• Not disclosed

Social Achievements

• Acquisition of Kings Mountain Park Mutual Water Company, enhancing water supply reliability and firefighting capabilities for approximately 61,000 people.

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Maintaining daily operations for small water systems
• Ensuring safe, reliable, and affordable water service long-term for small systems

Mitigation Strategies

• Acquisition of Kings Mountain Park Mutual Water Company to alleviate pressure on small systems and provide professional operation.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Named one of “America's Most Responsible Companies” and the “World's Most Trustworthy Companies” by Newsweek and a Great Place to Work®.