Transparency, Reporting, and Sustainable Finance: Aligning Finance with Our Decarbonization Strategy

Jul 28, 2021 9:00 AM ET
Article

Transparency and reporting

NRG is committed to leading its sector in sustainability transparency and disclosure. We follow the leading globally accepted frameworks and standards in order to provide key information to all of our stakeholders.

In 2017, the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) issued recommendations on how companies should inform investors, lenders, and insurance underwriters about exposure to climate-related risks and opportunities, and their sensitivities to different climate scenarios. NRG supports implementing the TCFD recommendations and committed to report in line with those recommendations. In late 2018 and into 2019, we engaged a third-party expert to improve our futures thinking capability, including climate scenario analysis. In late 2020, NRG published a TCFD mapping document that links current disclosures with each TCFD Recommendation. A full TCFD report will be published in 2021, including a transition-risk based climate scenario analysis.

Additionally, 2020 marked the fifth year NRG disclosed sustainability data using the SASB standards.

NRG responds to more than ten ESG rating and ranking entities and we actively engage with stakeholders regarding the ESG disclosures they would like to see. In addition, we actively monitor the rapidly evolving landscape of ESG frameworks and ongoing efforts to harmonize reporting standards. As this landscape evolves, we will continue to engage with stakeholders and adapt ESG reporting accordingly.

Sustainable finance: Aligning finance with our decarbonization strategy

Sustainability-Linked Bond
In December 2020, NRG completed the issuance of $900 million in senior secured first lien notes in a landmark issuance, pioneering the first sustainability-linked bond (SLB) in North America, and the first issued by any energy company outside Europe. In concert with our acquisition of Direct Energy, the SLB will support our efforts to pursue growth, achieve our climate transition strategy, and bring increasing value to our stakeholders. As a complement to the sustainability-linked pricing metric added to the NRG corporate credit agreement in 2019, the issuance of the SLB aligns our business and financing with commitments and values by creating a direct link between climate and funding strategies. The SLB links attractive financing to the realization of previously announced goals to achieve a 50% reduction of absolute greenhouse gas (GHG) emissions by 2025 from our current 2014 baseline, and reach net-zero GHG emissions by 2050. To learn more about how the bond fit our strategy and brings our sustainability and financial goals together, read our SLB framework here.

Learn more about why we are uniting our net-zero goals and our financing strategy here.