There is heightened demand for transparency and expectation that business leaders adopt holistic, long-term approaches to managing environment, social and governance (ESG) performance. Companies are judged on performance and how well they link tangibles (such as financial capital and physical assets) with intangibles (such as reputation, brand, customer loyalty, risk management, trust and credibility) and show bottom-line 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. Good governance ensures transparency, fairness and accountability, and gives us a structured way to manage the challenges of a changing society.
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.
The ESC is also responsible for monitoring the progress of AEP’s sustainability goals and the timely and accurate production of AEP’s annual Corporate Accountability Report. In addition, the ESC helps increase internal and external stakeholder awareness of the relevance and value of sustainability to AEP’s success. The ESC also provides a forum for sharing work, best practices and ideas, and identifying trends and emerging issues that could impact AEP financially or operationally.
Executive sponsors of the ESC include the Chairman, President and CEO; Executive Vice President, General Counsel and Corporate Secretary; and Executive Vice President of External Affairs.
In addition to the ESC, the Committee on Directors and Corporate Governance of the Board of Directors reviews the Corporate Accountability Report annually and actively 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 annual outreach to engage with investors on important ESG and governance matters.
AEP’s Enterprise Sustainability Council Representation
|AEP Energy||Ethics & Compliance|
|Chief Customer Officer||Human Resources|
|Chief Digital Officer||Information Technology|
|Commercial Operations||Investor Relations|
|Corporate Communications||NERC Reliability Assurance|
|Corporate Finance||Operating Company President|
|Corporate Planning & Budgeting||Public Policy|
|Customer Solutions & Policy||Real Estate & Workplace Services|
|Distribution Services||Regulatory Services|
|Economic & Business Development||Resource Planning|
|Enterprise Risk Management||Safety & Health|
|Enterprise Security||Supply Chain & Procurement|
Learn more about AEP’s Corporate Governance and see our report: American Electric Power: Strategic Vision for a Clean Energy Future for climate risk information.