AEP Sustainability - SUSTAINABILITY & ESG

SUSTAINABILITY/ESG GOVERNANCE

When stakeholders evaluate a company, one of the first things they look at is the strength of governance. How and where sustainability fits into the corporate structure can be revealing of where a company’s priorities lie. At AEP, we have strong governance to support sustainability and ESG performance, ensuring alignment with corporate purpose and strategy. Our approach to transparency links tangibles (such as financial capital and physical assets) with intangibles (such as reputation, brand, customer loyalty, risk management, trust and credibility) to show bottom line results and benefits.

There is no one-size-fits-all approach to sustainability governance, but AEP believes it is fundamental to building and strengthening sustained business value. Strong governance ensures transparency, fairness and accountability, and it gives us a structured way to manage the challenges of a changing society. We are committed to strong governance practices that protect the long-term interests of our shareholders.

Our Board of Directors works closely with our executive team to ensure we continually meet or exceed the highest standards of performance, innovation, ethics and service. In addition, the Board receives educational presentations from outside experts.

Through AEP’s Enterprise Sustainability Council (ESC) – with oversight from executive management and the Committee on Directors and Corporate Governance of the Board of Directors – we have clear guidance on our ESG responsibilities for sustainable business development. ESC members, who represent all aspects of AEP’s business, serve as strategic ambassadors, providing guidance and support to ensure the success of AEP’s sustainable development strategy. They do this by enabling cross-functional integration of sustainability across the enterprise and in corporate strategy. The ESC is also responsible for monitoring the progress of AEP’s sustainability goals.

In addition to the ESC, the Committee on Directors and Corporate Governance of the Board of Directors reviews the Corporate Accountability Report annually and monitors AEP’s ESG performance. The Committee provides feedback and develops the Board Statement supporting AEP’s commitment to sustainable business development and performance accountability. The combined governance from the Board of Directors and the ESC helps us ensure our disclosure undergoes a disciplined review and validation process.

While these issues are discussed by the Board of Directors throughout the year, we report to the Committee on our sustainability-related activities at least twice per year. In addition, the Lead Director of AEP’s Board of Directors conducts an annual outreach with our largest shareholders to engage with investors on important ESG matters.

Learn more about AEP’s Corporate Governance and see our report titled: American Electric Power: Strategic Vision for a Clean Energy Future for climate risk information.