NRG Energy scooped the prize for best board oversight of ESG at Corporate Secretary and sister publication IR Magazine’s inaugural ESG Integration Awards in July 2022. The awards were presented following the ESG Integration Forum – Summer in New York.
Risk oversight is a core responsibility for all boards and addressing ESG-related matters is rapidly becoming a core part of risk oversight. Some investors have raised concerns about what they see as a lack of ESG-related experience or skills on many boards, which they fear limits their ability to oversee those issues.
That’s not the case at NRG. Almost half (45 percent) of its board members have previous experience/qualifications in environmental and sustainability issues and their implications, and 64 percent are gender or ethnically diverse. Such diversity is widely seen as key to bringing valuable perspectives across the ESG spectrum.
In 2018, the governance and nominating committee of NRG’s board assumed responsibility for overseeing ESG matters. Since then, the board has conducted an ESG mapping exercise to assess and understand where different aspects of ESG are handled by the board and its various committees. (Click here for details of Corporate Secretary research on how boards are handling ESG oversight.)
Here, Christine Zoino, NRG’s deputy general counsel and corporate secretary, gives an insight into the board and the company’s ESG focus.
What do you see as your success in this area?
We are incredibly proud of the insight and guidance our board directors bring to NRG as a result of their diverse backgrounds and experiences. They are aligned with our strategic initiatives and, for example, played a critical role when we accelerated our climate goals to be 1.5ºC-aligned and also when we elevated diversity, equity and inclusion as one of our values.
Since 2018, NRG’s governance and nominating committee has held responsibility and oversight for ESG programs, including climate change and sustainability policies and programs.
Do you co-ordinate with other teams and the board?
Sustainability is foundational to everything we do at NRG and, as corporate secretary, I work with teams across the company on our ESG initiatives in preparation for interaction with our board. This includes our sustainability group, investor relations, talent and administration, among others.
We understand that the board’s role is to provide oversight in its areas of responsibility, which include ESG, and we work collaboratively to get it the information it needs. Our management team, [in] co-ordination with the chair of our board and the chair of the governance and nominating committee, reviews agendas and materials in advance of board and committee meetings to help guide the discussion and review of ESG topics by the board. This allows us to focus on key topic areas and emerging needs as they arise.
What lessons have you learned from this work over the past year?
ESG is a constantly evolving area, and it takes the commitment of the entire board as well as the management team to determine how ESG intersects with the company and its business, and where the company should focus its efforts to make meaningful change.