Climate Change Data

Environmental Metrics

ESG Focus Areas

• Affordable energy
• Asset and risk management
• Community engagement
• Customer experience and satisfaction
• Diversity
• Emergency preparedness
• Employee development and engagement
• Environmental accountability
• Ethics and compliance
• Financial performance
• Fuel diversity
• Governance
• Procurement practices
• Regulatory policy

Environmental Achievements

• New powerhouse at We Energies' Twin Falls hydroelectric facility increased generating capacity by 50%
• ReACT™ emission control technology at WPS Weston 3 power plant captured >90% of sulfur dioxide and mercury, and >20% of nitrogen oxides
• Nearly 100% of We Energies and WPS combustion products beneficially utilized

Social Achievements

• 2016 was the safest year on record for several companies, with a 17% decrease in OSHA-recordable incidents and lost-time incidents
• We Energies named most reliable electric utility in the Midwest for the sixth consecutive year
• We Energies and Wisconsin Public Service ranked first in the Midwest for power quality
• Minnesota Energy Resources ranked second in the Midwest for price and overall customer satisfaction

Governance Achievements

• Separation of CEO and Chairman of the Board roles
• 100% completion of compliance training and affirmation
• Annual certifications filed under the Sarbanes-Oxley Act

Climate Goals & Targets

Environmental Challenges

• Relatively flat electricity growth
• Natural gas and coal economics driving reevaluation of generation portfolio
• Aging infrastructure of natural gas distribution systems

Mitigation Strategies

• Comprehensive effort to adapt to changing industry and practice strong environmental stewardship
• Strategic reshaping of electric generation portfolio to incorporate renewable energy, maintain fuel diversity, reduce costs, and limit carbon emissions
• Investments in modernized infrastructure ($1.5 billion/year)
• Peoples Gas System Modernization Program replacing aging natural gas pipelines
• Acquisition of Bluewater Natural Gas Holding LLC for additional natural gas storage

Supply Chain Management

Supplier Audits: 32 environmental compliance audits; 164 supplier endorsement reviews

Responsible Procurement

• Supplier certification process evaluating environmental, safety, legal, ethical, and financial factors
• Nondiscrimination compliance certificate
• Environmental management requirements
• Safety requirements and procedures

Climate-Related Risks & Opportunities

Physical Risks

• Catastrophic weather-related damage

Transition Risks

• Changes in environmental regulations
• Increased competition from renewable energy sources

Opportunities

• Development of energy-efficient products and services
• Investment in renewable energy

Reporting Standards

Frameworks Used: GRI Standards

Awards & Recognition

• MEA member social media award
• Chancellor’s Innovation Award
• Golden Shovel Award
• Governor’s Workplace Safety Award
• Most Responsible Companies
• Real Estate Vision Award
• ReliabilityOne Awards
• Technology Transfer Awards
• Tree Line USA Utility Award
• UWM Partner of the Year
• Wisconsin Corporate Safety Award

Environmental Metrics

ESG Focus Areas

• Affordable energy
• Asset and risk management
• Community engagement
• Customer experience and satisfaction
• Diversity and inclusion
• Emergency preparedness
• Employee development and engagement
• Environmental accountability
• Ethics and compliance
• Financial performance
• Fuel diversity
• Governance
• Procurement practices
• Regulatory policy

Environmental Achievements

• Reduced CO2 emissions by approximately 14% below 2005 levels by 2017; goal to reduce by 40% by 2030 and 80% by 2050.
• Eliminated more than 1,000 MW of coal-fueled generation by retiring units or converting them to natural gas.
• Added three highly efficient combined-cycle natural gas units totaling 1,655 MW.
• Added 438 MW of wind generation.
• Added 50 MW of biomass cogeneration.
• Reduced combined SO2, NOx, and mercury emissions by more than 80% compared to 2000 emissions.
• Beneficial use of more than 14.5 million metric tons of combustion products in the past 17 years.

Social Achievements

• Achieved a 52% reduction in OSHA-recordable incidents and a 44% reduction in lost-time incidents over the last decade.
• Earned PA Consulting’s National ReliabilityOne Excellence Award for outstanding electric reliability performance.
• More than 100,000 WPS customers benefited from a 95% improvement in reliability in portions of the electric distribution system placed underground.
• Over 336,000 residential and business customers contacted with We Care calls.
• $17 million donated by our companies and foundations to nonprofit organizations in 2017.

Governance Achievements

• 11 of 13 directors were independent.
• 100% completion rate for compliance training and affirmation.
• 94% of votes cast approved executive compensation in 2017.

Climate Goals & Targets

Environmental Challenges

• Setbacks in injury reduction in 2017.
• Aging infrastructure of natural gas distribution systems.
• Potential adverse impact of GHG emission regulations on electric generation and natural gas distribution operations.
• Uncertainty surrounding the recently enacted tax legislation.

Mitigation Strategies

• Continuous work to promote safety improvement.
• System Modernization Program to replace aging natural gas pipelines.
• Strategic planning processes to evaluate uncertainties in maintaining reliable, affordable energy supplies.
• Evaluating potential GHG reduction pathways for electric companies.

Supply Chain Management

Supplier Audits: 35 supplier endorsement reviews (2017)

Responsible Procurement

• Nondiscrimination compliance certificate
• Environmental management requirements
• Safety requirements
• Fitness-for-duty policies
• Information security measures

Climate-Related Risks & Opportunities

Physical Risks

• Catastrophic weather-related damage

Transition Risks

• Changes in GHG emission regulations

Opportunities

• Investments in renewable energy
• Energy efficiency improvements

Reporting Standards

Frameworks Used: GRI Standards

Awards & Recognition

• America’s Best Employers (Forbes)
• Outstanding Achievement Award (Minnesota Safety Council)
• National ReliabilityOne Excellence Award (PA Consulting Group)
• Regional ReliabilityOne Award (PA Consulting Group)
• 50 Best Corporate Citizens (CR Magazine)

Environmental Metrics

ESG Focus Areas

• Climate Strategy
• Community Engagement
• Customer Satisfaction
• Cybersecurity
• Economic Development
• Empowered Employees
• Energy Affordability
• Energy Reliability
• Environmental Responsibility
• Financial Discipline
• Government Relations
• Innovation
• Operational Performance
• Safety and Health
• Stakeholder Transparency
• Strategic Governance
• Supply Chain Integrity

Environmental Achievements

• Exceeded goal to reduce carbon dioxide emissions by 40 percent below 2005 levels by 2019 (well in advance of 2030 target).
• Retired 40 percent of coal-fueled generation since 2014.
• More than halfway to goal of reducing methane emissions from natural gas distribution lines by 30 percent per mile from a 2011 baseline by 2030.

Social Achievements

• Contributed $20 million to nonprofit organizations in 2019.
• Spent a record $282 million with diverse suppliers in 2019.
• Provided more than $2 million to COVID-19 relief efforts.

Governance Achievements

• Maintained board diversity of knowledge, skills, experience, thought, gender, ethnicity, and tenure.
• Engaged company leaders and key external stakeholders to identify priority sustainability issues.

Climate Goals & Targets

Environmental Challenges

• Aging infrastructure in sections of natural gas distribution systems.
• Meeting evolving customer expectations about energy products and services.
• Managing risks and maintaining safe and reliable service to customers.

Mitigation Strategies

• Investing $15 billion between 2020 and 2024 to modernize electric and natural gas delivery infrastructure, expand natural gas infrastructure, reshape generation fleet, and deploy capital in renewable energy.
• Implementing a multiyear effort to standardize digital customer service.
• Implementing advanced metering infrastructure.

Supply Chain Management

Responsible Procurement

• Supplier selection based on quality, safety, environmental compliance, diversity, and ability to deliver.
• Supplier requirements for nondiscrimination, diverse workforce, environmental management, safety, and fitness for duty.

Climate-Related Risks & Opportunities

Physical Risks

• Catastrophic weather-related damage

Transition Risks

• Changes in GHG emissions regulation
• Changes in commodity prices

Opportunities

• Cost-effective investments in renewable energy
• Electrification

Reporting Standards

Frameworks Used: GRI Standards

UN Sustainable Development Goals

• Goal 7 (Affordable and Clean Energy)
• Goal 9 (Industry, Innovation and Infrastructure)
• Goal 13 (Climate Action)

Company initiatives align with these goals through efforts to deliver reliable, affordable energy, reduce greenhouse gas emissions, and build and maintain safe, resilient infrastructure.

Sustainable Products & Innovation

• Renewable energy pilot programs (Dedicated Renewable Energy Resource, Solar Now)

Awards & Recognition

• Arbor Day Foundation Tree Line USA awards
• Business Council Strategic Partner of the Year
• Business Worldwide Best CEO and Growth Strategy CEO awards
• Electric Power Research Institute Technology Transfer Awards
• Escalent Environmental Champion award
• FTSE4Good Index Series inclusion
• Hispanic American Construction Industry Association Corporate Leadership Award
• PA Consulting Group ReliabilityOne awards
• Verdantix International EHS Innovation Award
• Wisconsin Employer Support of the Guard and Reserve Above and Beyond Award
• Forbes America’s Best Employers for Diversity

Environmental Metrics

ESG Focus Areas

• Climate Strategy
• Community Engagement
• Customer Satisfaction
• Economic Development
• Empowered Employees
• Energy Affordability
• Energy Reliability
• Environmental Responsibility
• Financial Discipline
• Government Relations
• Innovation
• Operational Performance
• Safety and Health
• Stakeholder Transparency
• Supply Chain Integrity
• Strategic Governance

Environmental Achievements

• Exceeded 40% carbon dioxide reduction goal in 2019 (well in advance of 2030 target)
• SO2 and NOx emissions decreased by 40% and 17% respectively between 2019 and 2020
• Reduced combined cooling and process water use and total discharges from electric generating facilities by approximately 20% since 2005
• Recycled more than 53% of nonhazardous waste on average over the past six years
• 92% of all waste generated by demolition of three power plants was recycled in 2020
• More than 16.14 million metric tons of combustion products provided for beneficial use in the past 20 years

Social Achievements

• Donated more than $20 million to organizations across service areas in 2020 (including over $2 million to direct COVID-19 relief efforts)
• Women filled 24% of all leadership positions as of Dec. 31, 2020
• OSHA-recordable incidents and lost-time incidents reduced by 48% and 33% respectively since 2010
• Trained more than 500 veterans through the Utility Workers Military Assistance Program

Governance Achievements

• Annual review of board’s structure and governance practices
• Annual enterprise risk assessment
• 100% completion rate for annual ethics and compliance training and affirmation

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic
• Extreme weather conditions impacting energy demand
• Generational turnover in natural gas distribution workforce
• Maintaining reliable service while integrating higher levels of renewable energy technologies
• Cost of electric heat pumps compared to natural gas heating
• Changing climate conditions, potential policy measures and technology changes

Mitigation Strategies

• Activated Incident Management Team to manage COVID-19 response
• Accelerated support for communities
• Instilled importance of following CDC guidelines in employees
• Transitioned employees to remote work where possible
• Implemented temporary COVID-19 absences bank
• Offered flexible payment plans for customers
• Investing in renewable and low-carbon energy
• Modernizing electric and natural gas delivery infrastructure
• Expanding regulated natural gas infrastructure
• Launching advanced metering functionality
• Created formal apprenticeship program for natural gas employees
• Evaluating climate-related risks and opportunities and updating approach as needed
• Analyzing GHG emission profile of electric generation resources
• Participating in industry collaboratives and national initiatives

Supply Chain Management

Responsible Procurement

• Supplier selection based on quality, safety, environmental compliance, diversity, and ability to deliver
• Prohibition of discrimination based on race, gender, or other protected classes
• Expectation that suppliers share commitment to diverse workforce
• Specific baseline environmental performance requirements for suppliers
• Fitness-for-duty policies for suppliers

Climate-Related Risks & Opportunities

Physical Risks

• Catastrophic weather-related damage

Transition Risks

• Changes in GHG emissions regulation
• Changes in commodity prices

Opportunities

• Investments in renewable energy generation
• Development of energy-efficient products

Reporting Standards

Frameworks Used: SASB, TCFD, GRI

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 13 (Climate action)

Company initiatives align with these goals through renewable energy investments, infrastructure modernization, and GHG emission reduction efforts.

Awards & Recognition

• Milwaukee Business Journal 2021 Diversity in Business Award
• Capital Finance International 2021 Energy Awards Best ESG Growth Strategy in the U.S.
• PA Consulting’s ReliabilityOne award (We Energies)
• FTSE4Good Index Series
• Wisconsin Department of Workforce Development Vets Ready Initiative Award
• Arbor Day Foundation Tree Line USA utilities (We Energies and WPS)

Environmental Metrics

ESG Focus Areas

• Climate Strategy
• Community Engagement
• Customer Satisfaction
• Economic Development
• Empowered Employees
• Energy Affordability
• Energy Reliability
• Environmental Responsibility
• Financial Discipline
• Government Relations
• Innovation
• Operational Performance
• Safety and Health
• Stakeholder Transparency
• Strategic Governance
• Supply Chain Integrity

Environmental Achievements

• Reduced SO2 and NOx emissions by 79% and 41% respectively between 2018 and 2021.
• Recycled 49% of waste in 2021.
• Provided more than 16.71 million metric tons of combustion products for beneficial use in the past 21 years.
• Exceeded 40% carbon dioxide reduction goal (below 2005 levels) in 2019.

Social Achievements

• Reduced OSHA-recordable incidents by 49% and lost-time incidents by 27% between 2010 and 2021.
• Launched electric vehicle (EV) charger pilot programs in March 2022.
• 36% of senior vice president and above leadership positions filled by women or minorities at year-end 2021 (up from 29% in 2020).
• Contributed approximately $20 million to support communities in 2021.

Governance Achievements

• Maintained strong financial condition with no need to issue additional equity over the five-year forecast period.
• Increased annualized dividends per share.
• Consistently met financial goals across all regulated utility subsidiaries.

Climate Goals & Targets

Environmental Challenges

• Tight energy supply conditions in the Midwest power market.
• Supply chain issues delaying commercial operation of renewable energy projects.
• Extreme weather conditions impacting energy demand and grid reliability.
• Potential impacts of GHG emissions regulation on energy business.

Mitigation Strategies

• Postponed retirements of older Oak Creek units by approximately one year each.
• Implemented a retention plan to address workforce needs.
• Invested in liquefied natural gas (LNG) facilities to meet peak winter demand.
• Built adaptability into fuel supply and transportation contracts to address climate change regulation.
• Actively participating in industry collaboratives and national initiatives to share information and best practices.

Supply Chain Management

Responsible Procurement

• Evaluation of suppliers on environmental, safety, legal, ethical, and financial factors.
• Requirement for suppliers to comply with employment laws.
• Partnership with minority-owned business enterprises.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Investment in renewable energy generation

Reporting Standards

Frameworks Used: SASB, TCFD, GRI

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 13 (Climate action)

Initiatives align with these goals through renewable energy investments, infrastructure modernization, and emissions reduction efforts.

Awards & Recognition

• Edison Electric Institute Emergency Response Award
• FTSE4Good Index Series inclusion
• Milwaukee Business Journal Diversity in Business Award
• Wisconsin Department of Workforce Development Vets Ready Initiative Award

Environmental Metrics

ESG Focus Areas

• Climate Strategy
• Community Engagement
• Customer Satisfaction
• Economic Development
• Empowered Employees
• Energy Affordability
• Energy Reliability
• Environmental Responsibility
• Financial Discipline
• Government Relations
• Innovation
• Operational Performance
• Safety and Health
• Stakeholder Transparency
• Strategic Governance
• Supply Chain Integrity

Environmental Achievements

• Reduced SO2 and NOx emissions by 42% and 14%, respectively, between 2019 and 2022.
• Reduced water withdrawals from major sources by 16% between 2018 and 2022.
• Consistently recycled between 49% and 55% of waste in the past three years, exceeding the EPA's National Recycling Goal.
• Retired approximately 1,900 MW of nameplate capacity of fossil-fueled generation since the beginning of 2018.
• Achieved a 49% reduction in CO2 emissions from 2005 levels by 2022.

Social Achievements

• Updated diversity and inclusion mission statement to include equity.
• Expanded inclusion training to all employees.
• Improved DART incident rate to 1.07 in 2022 (best year ever).
• Contributed $20.6 million to support communities in 2022.
• Contributed $1 million to UWM's Moon Shot for Equity initiative.

Governance Achievements

• Maintained good working relationships with all represented unions.
• Achieved 100% completion rate in annual ethics and compliance training in 2022.
• No fatalities for 12 consecutive years.

Climate Goals & Targets

Environmental Challenges

• Transitioning to a low-carbon economy while maintaining reliable, affordable energy.
• Addressing the social impact of plant retirements on communities.
• Managing risks associated with climate change, including physical and transition risks.
• Reducing scope 3 emissions.
• Maintaining energy reliability during extreme weather events.

Mitigation Strategies

• Investing in renewable and low-carbon energy sources.
• Implementing a Just Transition framework to support workers and communities.
• Conducting scenario analyses to assess climate-related risks and opportunities.
• Evaluating strategies to decarbonize scope 3 emissions.
• Modernizing electric and natural gas infrastructure to enhance reliability and resilience.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Supplier risk assessment
• Supplier Diversity Initiative

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Investment in renewable energy
• Development of energy-efficient products

Reporting Standards

Frameworks Used: SASB, TCFD, GRI

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation and infrastructure)
• Goal 13 (Climate action)

Company initiatives align with these goals through investments in renewable energy, infrastructure modernization, and emissions reduction.

Awards & Recognition

• Tree Line USA
• FTSE4Good Index Series
• Best ESG Companies (Investor's Business Daily)
• Inspiring Efficiency Award (MEEA)
• Vets Ready Employer Initiative Award

Environmental Metrics

ESG Focus Areas

• Greenhouse Gas Emissions
• Air Quality
• Water Management
• Coal Ash Management
• Energy Affordability
• Workforce Health and Safety
• End-Use Efficiency & Demand
• Grid Resiliency
• Integrity of Gas Delivery Infrastructure

Environmental Achievements

• Substantially 100% of Scope 1 emissions are covered by emissions-reporting regulations.
• No fines, enforcement orders, or penalties for water-related regulatory violations in 2023.

Social Achievements

• 77% of We Energies residential customer electric disconnections for non-payment were reconnected within 30 days.
• 83% of Wisconsin Public Service residential customer electric disconnections for non-payment were reconnected within 30 days.

Governance Achievements

• No incidents of non-compliance with physical and/or cybersecurity standards or regulations reported due to security restrictions.

Climate Goals & Targets

Environmental Challenges

• Managing Scope 1 emissions
• Managing water management risks
• Managing coal combustion products
• Impact of external factors on customer affordability of electricity and gas
• Maintaining grid resiliency
• Maintaining integrity of gas delivery infrastructure

Mitigation Strategies

• Long-term and short-term strategies and plans to manage Scope 1 emissions are discussed in the 2023 Corporate Responsibility Report and Climate Report.
• Water management strategies and practices to mitigate risks are described in the 2023 Corporate Responsibility Report.
• Coal combustion products (CCPs) management policies and procedures are described in the 2023 Corporate Responsibility Report.
• Discussion of impact of external factors on customer affordability is available in the 2023 Corporate Responsibility Report and Form 10-K.
• Efforts to manage grid resiliency are discussed in the 2023 Corporate Responsibility Report.
• Efforts to manage the integrity of gas delivery infrastructure are discussed in the 2023 Corporate Responsibility Report.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB

Environmental Metrics

ESG Focus Areas

• Governance
• Social Responsibility
• Environmental Responsibility
• Climate Change

Environmental Achievements

• Reduced sulfur dioxide, nitrogen oxide, and mercury emissions by approximately 97% compared to 2000 levels.
• Added over 4,300 megawatts (MW) of solar, wind, and battery storage to the regulated utility fleet (planned for 2025-2029).

Social Achievements

• All employees and the board of directors receive annual training on the Code of Business Conduct.
• Employee safety is a top priority, supported by engagement and accountability at all levels.

Governance Achievements

• Established a Climate Risk Committee that meets quarterly to review and discuss climate-related goals and initiatives.
• 10 of 12 directors are independent.

Climate Goals & Targets

Environmental Challenges

• Potential impact of climate change on the utility sector.
• Cybersecurity risks.
• Supply chain disruptions.
• Growing customer demand for energy-efficient and lower-emitting options.
• GHG emissions regulation and future legislation.

Mitigation Strategies

• Continuous assessment of cybersecurity program maturity and incorporation of improvements.
• Participation in information sharing and vulnerability analysis with various organizations.
• Offering a range of energy efficiency tools and programs to customers.
• Investing in modular natural gas-fueled generation and utility-scale solar generation.
• Strategic planning to anticipate and meet environmental challenges.
• Multi-emission reduction strategy.

Climate-Related Risks & Opportunities

Physical Risks

• Severe weather
• Catastrophic events
• Significant changes in water levels

Transition Risks

• Legislative or regulatory developments affecting economics of operating generating facilities.

Opportunities

• Development of energy-efficient products
• Growing customer demand for energy-efficient and lower-emitting options

Reporting Standards

Frameworks Used: CDP, Greenhouse Gas Protocol Corporate Accounting and Reporting Standard