Governance, Stakeholder Engagement & Risk Management
As of April 2022, SJI is governed by a 10-member Board of Directors, nine of whom are independent.
Corporate Governance
Our Board of Directors, elected by the shareholders, is the company’s ultimate decision-making entity, except for matters reserved for shareholder consideration. Three of SJI’s 10 members of the Board of Directors are female. We are proud of this 30% female representation on our Board and the significant, positive role diversity plays in our organization.
In 2018, the Board of Directors established an internal Environmental, Social and Governance (ESG) Management Committee that includes cross-functional members of management from key areas of the Company such as ESG, human resources, legal, risk management, communications, safety and environment. The ESG Management Committee is responsible for the development and implementation of the company’s key human capital management, sustainability and ESG strategies, initiatives, and policies. This includes management of SJI’s commitment to diversity, equity and inclusion, safety, climate, health, human rights, human capital management, and community support strategies.
Several department subject matter experts provide the ESG Management Committee with updates on the company's environmental, social and governance activities at the quarterly meetings. The Co-Chair of the ESG Management Committee presents a report of the Committees' activities at the quarterly ESG Committee of the Board meetings.
The ESG Committee of the Board provides oversight, monitoring and guidance of environmental and social related risks and opportunities regarding safety, corporate and social citizenship, public and legal policy, workforce initiatives, corporate culture, climate change, environmental stewardship and compliance, political and regulatory activities, sustainability, employee work life, diversity and inclusion and economic and social vitality in the communities and markets in which the Company operates. Management presents an update of the Company's Environmental, Social and Governance activities at each ESG Board Committee meeting and the Chair of the ESG Board Committee provides a report to the Board of Directors at each quarterly meeting. The ESG Committee of the Board also oversees the production of the Company’s annual Environmental, Social and Governance (ESG) Report, which provides an overview of the Company’s commitment to ESG.
We welcome feedback on this report and our programs, as well as our environmental, social and governance metrics. Please submit comments to media@sjindustries.com.
Board of Directors:
- Michael J. Renna (President & CEO, SJI)
- Joseph M. Rigby (Chairman)
- Sarah M. Barpoulis
* ESG Committee Chair
** ESG Committee of the Board Member
- Victor A. Fortkiewicz**
- Sheila Hartnett-Devlin*
- G. Edison Holland, Jr.
- Sunita Holzer
- Kevin O’Dowd
- Christopher J. Paladino**
- Frank L. Sims**
Board Committees:
- Audit Committee
- Compensation Committee
- Environmental, Social and Governance Committee
- Executive Committee
- Strategy & Finance Committee
- Nominating & Governance Committee
Director Tenure and Diversity
Director Age
Stakeholder Engagement
In an effort to move our Collective Ambition initiative forward, SJI engages with our stakeholders to understand their needs and expectations regarding our business and the services we provide. We believe these exchanges of information are fundamental to strategizing how we can continue to provide long-term value. SJI’s stakeholders include customers, employees, regulators, shareholders and the communities we serve.
Customers
SJI is committed to providing safe, reliable, affordable clean energy to our more than 700,000 customers across the state of New Jersey. The importance of delivering an outstanding experience for our customers is core to everything we do at our utilities — and the results of our commitment are clear. We continually strive to modernize critical infrastructure and enhance our customer experience. We listen to the needs of our customers and provide solutions to help them save energy and lower their bills by proactively working to educate our customers about managing their accounts and accessing financial assistance. We are proud to deliver the quality service our customers expect and deserve, without sacrificing affordability. Learn more about how we serve our customers here.
Employees
Our employees are our greatest asset. Together, we work to foster a culture of belonging, where our professional, well-trained and knowledgeable staff treat each other with courtesy and respect. We’re committed to engaging our workforce and helping them achieve their professional goals. At SJI, we do this by helping employees connect with one another in meaningful ways, offering helpful training and development resources, providing education on wellness programs and more. We also regularly survey our employees to measure the effectiveness of our employee engagement efforts, including career development and wellness programs. Learn more about how we value our employees here.
Regulators
As a regulated company, public policy considerations often have a direct and measurable impact on our business. SJI works collaboratively with legislators and regulators to achieve results that ensure reliable, affordable and clean energy for our customers, while balancing the interests of the Company and public policy objectives. Learn more about our government involvement here.
Shareholders
Members of SJI management and the Board periodically meet with our shareholders to foster dialogue around the issues that are of value to both SJI and our investors. A key objective of our outreach efforts is to listen to our shareholders to better understand their perspectives on our executive compensation and environmental, social and governance programs and to obtain recommendations for strengthening our approach on these matters. To achieve this, in 2021, we reached out to our largest shareholders, aggregating approximately 79% of our outstanding shares. Members of the Board of Directors, including the Chairman and the Chair of the ESG Committee of the Board, SJI management and members of the ESG Management Committee met with four of our top shareholders. Those meetings included our first and third largest shareholders, representing approximately 27% of our shares outstanding. We will continue to engage with our shareholders in similar ways to seek feedback on our performance and disclosed ESG information. Learn more about our shareholder engagement here.
Communities We Serve
SJI provides more than just energy to the communities we serve; we are an active partner in addressing the financial, social, health and safety needs of communities throughout New Jersey. We offer assistance to hospitals, food banks, social services and civic organizations, first responders, school programs, athletic teams and many other worthy causes. SJI employees volunteer time as mentors, coaches, laborers and more as they seek to improve the communities where they live and work. SJI also serves as an economic engine by providing jobs and infrastructure enhancements and working with a diverse pool of local suppliers to support their businesses. Learn more about how SJI serves surrounding communities here.
Risk Management
To strategically manage ESG risks that may impact SJI, the Risk Management Team established the following Enterprise Risk Management (ERM) process utilizing the Committee of Sponsoring Organizations of the Treadway Commission (COSO) framework:
- Facilitate annual one-on-one meetings with Business Area Leads to ensure a systematic approach to identifying and assessing risks for likelihood (probability) and criticality (financial impact), including Environmental (specifically climate-related risks), Social, and Governance risks.
- Develop inherent and residual risk assessment scores for low, medium, high, and very high risks to determine materiality.
- Evaluate the speed of onset or velocity (the time that elapses between the event and the impact on the company).
- Create and obtain an understanding of the controls that have been established to mitigate significant risks.
Leveraging the ERM process provides consistent evaluation and common language throughout the risk assessment process. The ERM risk assessment includes the integration of identifying, assessing, managing, monitoring and communicating ESG-related risks. Data, metrics, and controls are then communicated to Internal Audit, the Risk Management Committee ( RMC), Audit Committee of the Board, ESG Management Committee, and the ESG Committee of the Board. This comprehensive approach enhances SJI’s ability to mitigate ESG risks, create resiliency and contribute to our mission to deliver safe, reliable, affordable clean energy for a better today and tomorrow.
Political Involvement
SJI is committed to advocating for sound public policies that advance the interests of our customers, employees, stakeholders and the communities we serve. Our participation in efforts to properly influence public policy takes many forms, and is conducted in full compliance with all federal, state and local laws, rules and regulations. Under the corporation’s Code of Ethics, all directors and employees are required to uphold all laws and applicable regulations, which include provisions governing lobbying activities, issue advocacy, political contributions and government contracting.
As a heavily regulated company, public policy considerations often have a direct and measurable impact on our business. Accordingly, SJI takes an active role in legislative, regulatory and other policymaking processes to ensure that legislators and regulators are properly informed about the decisions they make that may impact our business, and ultimately, our customers, employees and communities. Notably, SJI’s efforts in this regard include informing policymakers about the company’s decarbonization initiatives.
To ensure proper compliance and adherence to the highest ethical standards, all persons performing lobbying activities on behalf of the company are required to be registered with the appropriate regulatory agencies and must file applicable reports and disclosure statements on a regular basis, as required by law. Additionally, all persons conducting lobbying activities on behalf of the company, including third-party consultants, are required to avoid any and all prohibited conflicts of interest that may arise.
Finally, SJI reports all legislation and proposed regulations upon which advocacy activities are undertaken to the New Jersey Election Law Enforcement Commission (ELEC)and provides annual reports to ELEC on all corporate expenditures to support such activities. ELEC makes all such disclosures and reports available to the public on its website, https://www.elec.nj.gov/.
New Jersey law explicitly prohibits regulated corporations such as utilities, banks and insurance companies from using corporate funds to make or solicit political contributions. In strict adherence to State law, SJI does not make or solicit campaign contributions for candidates for elected office at any level. Moreover, SJI does not permit the utilization of corporate resources, including staff time, supplies, equipment or property, in support of candidates for elected office at any level.
Finally, it should be noted that for more than two decades, SJI employees have maintained a separate, independent continuing political committee, known as the SJI PAC, in accordance with State laws, rules and regulations. The SJI PAC is not supported by or controlled by the corporation and participation by SJI employees is completely voluntary.
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 by 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 established a Clean Energy and Sustainability team – responsible for strategy development, initiative execution and oversight of all energy efficiency, clean energy and environmental sustainability initiatives that will support our carbon reduction goals to achieve a 70% carbon reduction of operational emissions and consumption by the year 2030 and to achieve carbon neutrality by 2040. The members of this team, a collaboration of individuals across various business lines, enable us to ensure we are working to decrease the impact on the environment and to have a positive impact on our customers and communities, while facilitating our carbon emission reduction targets. The Vice President of this team serves as a member of the ESG Management Committee.
In 2021, to provide focused effort on each of the emissions categories within the SJI footprint, the Sustainability and Green House Gas Emissions Reduction Committee was formed to centralize communication, lateral visibility and monitoring of decarbonization metrics and key performance indicators across business lines. This group is comprised of business leaders and subject matter experts who meet monthly within subcommittee Team of Teams groups to discuss progress of their area of emissions reductions and potential future strategies. The Chair of this Committee serves as a member of the ESG Management Committee and provides a quarterly update of the Sustainability and Green House Gas Emissions Reduction Committee’s activities and initiatives.
See Sustainable Business Practices Section of this report for further ESG/Sustainability Strategy information.
ESG/Sustainability Governance
To support the creation of this report and the company’s other ESG and corporate sustainability efforts, the ESG Committee of the Board provides oversight on key initiatives such as Human Capital Management, Safety and Climate. The Chairwoman of the Committee provides a quarterly report to the full Board of Directors regarding ESG initiatives.
The ESG Management Committee includes cross-functional members of management from key areas of the Company such as ESG, human resources, legal, risk management, communications, safety and environment. Several department subject matter experts provide the ESG Management Committee with updates on the company's environmental, social and governance activities and the Co-Chair of the ESG Management Committee provides a report of the Committees' activities at the quarterly ESG Committee of the Board meetings.
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, climate, health, human rights, human capital management, diversity, equity and inclusion, governance and community support strategies.
The ESG Management Committee
The ESG Management Committee carries out several key functions, including:
- Monitors and responds to emerging ESG issues and makes recommendations to the Board where appropriate to improve SJI’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), talent acquisition, employee 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.
- 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.
- Receives 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 and 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.
- Receives 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.
- Receives reports on ESG related investor engagement.