Priority Issues

Identifying and reporting on the most relevant issues for a company and its stakeholders is the foundation of sound disclosure. Today, the demand for and interest in environment, social and governance disclosure has never been greater. At AEP, we have seen this firsthand. The issues we are being asked about are material to AEP.

We recognize that material issues can directly or indirectly impact AEP’s ability to create long-term value for its customers, employees, investors and society at large. Sustainability considers a broader scope of action and issues in determining what is material compared with the origins of materiality in the auditing and accounting processes of financial reporting. That is one reason our approach to integrated reporting seeks to emphasize connections between financial and nonfinancial performance and to demonstrate a high degree of transparency.

AEP last conducted a materiality assessment in 2012 during which we identified 18 priority issues for AEP. And in 2013, the electric utility industry conducted an industry-wide materiality assessment that identified 15 material issues. It was conducted by the Electric Power Research Institute’s Energy Sustainability Interest Group, of which AEP is a member. The industry-wide materiality assessment is in the process of being refreshed.

In 2017, we will undertake a new review of AEP’s priority issues working with eRevalue, a global service provider whose data analytics platform, Datamaran, uses Artificial Intelligence (AI) expertise to derive data-driven insights. Datamaran will help us benchmark and analyze data on regulatory, competitive and reputational risks related to the latest economic, environment and social (ESG) issues.

We regularly discuss our priority issues with our Enterprise Sustainability Council and external stakeholders, as well as reviewing the company’s risk reports to seek alignment.

Priority Issues of the Electric Power Industry

Sustainability PillarIssues
Environmental Greenhouse gas emissions
Reductions of other air emissions
Water Quality
Water availability
Habitat protection and biodiversity
Waste Management
Social Public safety and health
Employee safety and health
Job satisfaction
Community support and economic development
Engagement and collaboration
Economic Energy reliability
Energy affordability
Skilled workforce availability
Economic viability of electric utilities

Source: Electric Power Research Institute Energy Sustainability Interest Group