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ESG 2019 Annual Report

By the Numbers

ESG Overview

Introduction

These metrics are provided in response to the desire of investors and other stakeholders for ESG/Sustainability information that is consistent in terms of accessibility, content, timing and presentation. Companies that participate in voluntarily providing ESG/Sustainability information in this format share a common goal to provide investors with relevant information that:

  • Allows integration of ESG/Sustainability data and performance
  • Provides clarity of risks and opportunities and how they are being managed
  • Provides insight into growth strategy, assumptions and future trajectory
  • Provides both qualitative and quantitative information
  • Serves as a primary reporting channel for consolidated ESG/Sustainability information relevant to investors and other stakeholders

ESG/Sustainability Strategy

SJI is dedicated to supporting the future of energy and the region. We’re committed to working with customers and industry, commercial, and government stakeholders to ensure a balanced approach to addressing the energy needs of our region – driving energy independence and lowering costs. Natural gas plays a critical role in this future – helping to ensure a balanced approach while delivering a safe, reliable, affordable solution to meet the energy needs of our state. In addition to supporting the need for energy from diverse sources, SJI is committed to driving down the cost of energy, delivering safe and reliable service and improving energy efficiency.

To support this commitment, SJI has established its Clean Energy and Sustainability team – responsible for strategy development, initiative execution and oversight of all energy efficiency, clean energy and sustainability initiatives. Through this group, we continue to develop meaningful partnerships with all stakeholders to ensure we have a minimal impact on the environment and a positive impact on our customers and communities.

ESG/Sustainability Governance

SJI is governed by a 10 member, as of July 2020, Board of Directors, nine of whom are independent and not SJI employees. Our Board of Directors, elected by the shareholders, is the company’s ultimate decision-making entity, except matters reserved for shareholder consideration.

To support the creation of this report and the company’s other corporate sustainability efforts, the Board of Directors reconstituted the former Corporate Responsibility Committee of the Board, renamed it the Environmental, Social and Governance Committee and revised the responsibilities of the committee to ensure oversight of key initiatives such as Human Capital Management and Climate. The Chair of the ESG Board Committee provides a quarterly report to the full Board regarding ESG initiatives.

Also, in 2018 the Board of Directors established the internal Environmental, Social and Governance (ESG) management committee that reports to the Board ESG Committee at least quarterly.

The ESG Management Committee is responsible for the development and implementation of the company’s key sustainability strategies, initiatives and policies. This includes management of SJI’s commitment to safety, environmental, health, human rights, employee relations, governance and community support strategies.

The ESG Management Committee:

  • Monitors and responds to emerging ESG issues and makes recommendations to the Board where appropriate to improve the Company’s ESG performance.
  • Reviews and monitors the Company’s environmental and sustainability policies, practices and performance to ensure compliance with the relevant legal and regulatory requirements.
  • Implements, reviews and evaluates Company policies, procedures and practices relating to employment practices, including workforce diversity, employee work life, Equal Employment Opportunity (EEO), employee attraction development, retention and compliance with employment related laws, regulations and policies.
  • Manages environmental and socially responsible business practices that align with the Company’s values and long term strategic goals.
  • On an ongoing basis, assists the Company in monitoring and bringing to the attention of the Board of Directors, as appropriate, current and emerging political and social actions, public policy, environmental and social issues that may affect the business operations, financial performance or public image of the Company.
  • Receive periodic reports regarding ESG (including climate) related risks and the corresponding procedures for monitoring, controlling and reporting these risks.
  • Annually reviews Company’s environmental, social, governance metrics to be included in the annual ESG Report
  • Reviews the ESG report before distribution to the ESG Committee of the Board.
  • Evaluates and approves environmental, social and health and safety metrics that will be publicly disclosed to external stakeholders.
  • Receive reports from members of Management on the Company’s relationship with key stakeholders, their view on the company and any issues raised by them.
  • Provides guidance on environmental impact and sustainability issues.

Climate-Related Risks & Greenhouse Gas Emission Reduction Opportunities

Climate change legislation could impact SJI’s financial performance and condition as it is receiving ever increasing attention from both scientists and legislators. The outcome of federal and state actions to address global climate change may result in a variety of regulatory programs, including additional charges to fund energy efficiency activities or other regulatory actions. These actions could affect the demand for natural gas and electricity, result in increased costs to our business and impact the prices we charge our customers.

Because natural gas is a fossil fuel with low carbon content, it is possible that future carbon constraints could create additional demands for natural gas, both for production of electricity and direct use in homes and businesses. Any adoption by federal or state governments mandating a substantial reduction in greenhouse gas emissions could have far-reaching and significant impacts on the energy industry. We cannot predict the potential impact of such laws or regulations on our future consolidated financial condition, results of operations or cash flows.

Still, we intend to initiate carbon reduction investments across both our utility and non-utility business over the next five years. Investments that will be incremental to our prior utility capital plans. Specifically, we plan to focus on areas that 1) reduce energy consumption and emissions, 2) accelerate deployment of renewable energy, 3) educate customers on maximizing energy efficiency, and 4) modernize via technology innovations.

Across SJI and particularly in our utilities, we are uniquely positioned and prepared to make critical investments in support of greenhouse gas reduction and sound energy policy that will transform how we develop and use energy.