WBA Climate and

Energy Benchmark
Methodology report
Electric utilities sector

2020
WBA and CDP have formed a strategic partnership The World Benchmarking Alliance (WBA) has partnered with CDP,
to accelerate decarbonisation of the economy a disclosure non-profit, and the Assessing low-Carbon Transition
and ensure a climate-resilient future aligned with (ACT) initiative developed by CDP and ADEME, the French
the Paris Agreement. Environment and Energy Management Agency, to accelerate a
global decarbonisation and energy transformation. WBA’s Climate
and Energy Benchmark ranks companies against the climate
and energy transition required to meet the Paris Agreement, by
engaging with the companies themselves, evaluating their current
and – importantly – their future plans in terms of decarbonisation
pathways, as well as past and present performance to assess
future alignment. We expect the benchmark to drive increased
transparency and corporate accountability, moving companies
from commitment to action.

Following from the Automotive Benchmark launched in December 2019, this report
presents the scope of the next sector and the companies that WBA will benchmark on
the decarbonisation and energy transformation: electric utilities.

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Overview

Turning down the heat “Electricity and heat production is the single largest
With 67 countries and eight US states now having set net-zero greenhouse gas-emitting economic activity.
carbon ambitions, the pressure is on for electric utilities companies The electric utilities sector is thus crucial to to the ability
to turn down the heat on producing power. These companies face of other sectors to decarbonise. Deep transformational
change through the decarbonisation of generation
transition risks from such incoming policies, as well as from legal,
assets is needed if we are to meet the well-below 2°C
technological and market changes, including consumer appetite
ambition of the Paris Agreement.”
for clean electricity. Companies also face physical risks from changing
climate patterns, such as direct damage to assets. Companies are Vicky Sins
Lead Climate and Energy Benchmark
increasingly expected to disclose their governance around climate-
related risks and opportunities.

WBA is developing a range of benchmarks to assess the progress to development. This is where the Climate and Energy Benchmark
of 2,000 companies across seven system transformations needed comes in.
to achieve the UN’s Sustainable Development Goals (SDGs) and
accelerate sustainable business beyond 2030. The private sector The tipping point
has a crucial role to play in advancing the SDGs, but there needs Without urgent action, the world will experience more extreme
to be real change in the way that business impact is measured. By weather events, sea level rise and negative impacts on biodiversity,
publishing free, publicly available benchmarks, WBA envisions a ecosystems and oceans. These will have a disproportionate effect
future where companies, investors, policymakers, civil society and on the poorest and most vulnerable populations for decades to
individuals are empowered with data to take action and encourage come. A major decarbonisation and energy transformation is needed
more sustainable business practices across all sectors. to align with global efforts to prevent the worst impacts of climate
change and achieve the goal set out in the Paris Agreement of
Decarbonising the economy and providing limiting global warming to well below 2°C. This is the accoun-
universal access to sustainable energy tability mechanism – the Climate and Energy Benchmark will
While energy access is a cornerstone for development, the energy measure corporate progress against the Paris Agreement. Private
sector is also a dominant contributor to greenhouse gas emis- sector engagement alongside action by governments and civil society
sions, and climate change represents the single biggest threat are critical for meeting this goal.

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The electric utilities sector

Between 2000 and 2016, the proportion of the world’s population to increase by 79% by 2050,3 decarbonisation of the electric
with electricity increased from 78% to 87%, and the number of people utilities sector is crucial for the transition to a low-carbon economy.
without access to electricity dropped below 1 billion. Expanding More than two thirds of electric power is currently generated from
infrastructure and improving technologies to provide sustainable combustible fuels.4 However, the renewable energy sector employed
and affordable energy for all will enable the growing global popu- a record 10.3 million people in 2017,5 and resource availability,
lation to prosper.1 However, the current reliance on fossil fuels means changing policies and falling technology costs are predicted to drive
that the production of electricity and heat accounts for 25% of all solar energy’s share of power generation in the coming decades.6
greenhouse gas emissions and is the single largest greenhouse WBA believes that there is momentum for climate action within
gas-emitting economic activity.2 With electricity demand predicted the electric utilities sector.

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The electric utilities sector

For other sectors to deliver on their decarbonisation objectives,

Reducing emissions
it is widely understood that substantial electrification is required.
Power generation accounts for more than 90% of the Scope 1 and 2
The potential for electrification across high-emitting industries is
emissions of an electric utilities company, according to the ACT Electric
considered to be significant, and there is broad consensus that
Utilities sector methodology. A central focus of the methodology and
electrification is the most effective and efficient way to transition
benchmark will therefore be on how electric utilities companies intend
to a low-carbon economy. The electric utilities sector therefore
to reduce these emissions between now and 2050. As well as the
plays a pivotal role in achieving this transition.
reduction of emissions in the generation process, the transition of
1 
United Nations Development Programme (UNDP), ‘Goal 7: Affordable and clean energy.’ 2020. (Online). the sector implies rethinking the role of electric utilities companies in
Available at: https://www.undp.org/content/undp/en/home/sustainable-development-goals/goal-7-
society more broadly. Using the methodology to set climate action
affordable-and-clean-energy.html
IPCC, ‘Climate Change 2014 Mitigation of Climate Change. Contribution of Working Group III to the goals within company strategies is important. Companies are also
2 
Fifth Assessment Report of the Intergovernmental Panel on Climate Change.’ 2014. (Online). Available at:
https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_full.pdf challenged to present their views on the decoupling of business growth
3
US Energy Information Administration (EIA), ‘Global Greenhouse Gas Emissions Data.’ 2019. (Online).
Available at: https://www.eia.gov/todayinenergy/detail.php?id=41433
from emissions, and how they see their role evolving in low-carbon
4
I EA, ‘Electricity.’ 2020. (Online). Available at: https://www.iea.org/fuels-and-technologies/electricity scenarios, such as shifting their business models to include acting
5
United Nations Development Programme (UNDP), ‘Goal 7: Affordable and clean energy.’ 2020. (Online).
Available at: https://www.undp.org/content/undp/en/home/sustainable-development-goals/goal-7- as energy-as-a-service providers, local low-carbon energy access
affordable-and-clean-energy.html
6
U S Energy Information Administration (EIA), 2019. (Online). Available at: https://www.eia.gov/
providers, and carbon capture and use operators.
todayinenergy/detail.php?id=41533

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Aligned state for companies in
the electric utilities sector

The ACT initiative assesses organisations’ readiness

to transition to a low-carbon economy, using future
oriented methodologies. Based on the sectoral decar-
bonisation approach developed by the Science-
Based Targets initiative, ACT evaluates a company’s
alignment with a 2°C world. The application of the
sectoral decarbonisation approach is described in
the ACT framework.

For the electric utilities sector, the sectoral decar-

bonisation approach only takes into account emissions
from electricity generation, excluding other business
segments. The generic sector decarbonisation pathway
is adapted into regional pathways. The company
decarbonisation pathway and carbon budget are
derived considering the geographic distribution of
the company’s generation assets.

Figure 1: Aligned state for companies in the electric utilities sector.

CDP Worldwide and ADEME 2019.

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ACT methodology and
assessment criteria

WBA will use the ACT assessments to produce various freely Electricity generation is strongly influenced by regulation, market
available benchmarks of companies in high-emitting sectors. Our structure and network infrastructure. Nonetheless, the sector has
goal is to drive action by companies, the financial sector including an important role in influencing and overcoming any constraints
investors, policymakers and other stakeholders including consumers. posed by these factors. Companies will be assessed on their
In doing so, we encourage companies to move to a well-below 2°C electricity production portfolio, targets, R&D in low-carbon tech-
compatible pathway in terms of their climate strategy, business nologies, and climate action management. Companies will also be
model, investments, operations and management of greenhouse assessed on their implementation of low-carbon business models,
gas emissions. which include acting as energy-as-a-service providers, local low-
carbon energy access providers, large-scale low-carbon electricity
For the electric utilities sector, particular emphasis will be placed generators, flexibility optimisers, and carbon capture and use operators.
on the level of emissions planned or ‘locked in’ by a company from
its generation assets between now and 2050, compared to its carbon Public consultation was an important step in the development of
budget. Analysing a company’s locked-in emissions alongside the ACT methodology. ACT sought the views and opinions of a
science-based budgets makes it possible to scrutinise the potential wide range of stakeholders including companies, civil society,
cost of inaction, including the probability of stranded assets. To academics and other relevant experts. The methodology includes
provide comprehensive, actionable information, the benchmark indicators that align with the information disclosed by companies
will also measure the gap between a company’s confirmed planned using CDP, GRI and SASB. It also shows alignment with and supports
generation emissions intensity and its decarbonisation pathway in the objectives of the recommendations made by the Taskforce
the next five years. Also important is the company’s development on Climate-related Financial Disclosures. WBA will continue to
of a low-carbon transition plan and scenario analysis determining embrace multi-stakeholder dialogue and consultation throughout
the impact of the transition on its strategy or business model. the benchmark development process.

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Electric Utilities keystone
companies – sample setting

WBA builds on leading academic research that put forward the idea reasons: (1) it is expected that these will generally represent more
of keystone actors, inspired by the concept of ‘keystone species’ than 90% of the Scope 1 and 2 emissions of a company from the EU
in ecology, to illustrate that the most influential companies in a given sector’, and (2) they represent a single, comparable activity through
industry can operate similarly to keystone species in ecological which a company’s low-carbon transition can accurately be measured.
communities. This means that they can have a disproportionate
effect on the structure and system in which they operate. As a The methodology also notes that companies might have other
result, WBA focuses its benchmarks on keystone companies. activities that could cause significant emissions in any of the
greenhouse gas accounting scopes. ‘Examples include gas explo-
We used the following five criteria and principles to identify the ration (significant Scope 1 emissions), transmission and distribution
keystone electric utilities companies: (significant Scope 2 emissions), or retail of gas (significant Scope 3:
1 The company dominates global or regional production revenues use of sold products emissions). These will be considered, but
and/or volumes within the electric utilities sector. only to the extent that they reinforce or undermine the transition
The company controls globally or regionally relevant segments of
2  strategy of the company (e.g. by carbon lock-in). The transition
production and/or service provision, based on an assessment of strategy of the electricity generation is the main focus.’
gigawatts of installed capacity and renewable energy generation.
3 The company connects (eco)systems globally or regionally
“We need to think and act in systems to drive transformative
through subsidiaries and their supply chains.
change and identify the keystone companies that can help
4 The company influences global or regional governance processes
put the world on a more sustainable path. WBA has identified
and institutions. and is now ranking the world’s most influential companies
5 The company has a global or regionally significant footprint, in terms of their impact on the SDGs. The transparency and
particularly in developing countries. However, because this sector insight in performance these rankings will provide will support
is strongly influenced by national regulation, this principle was accountability; and given the influence these keystone
less relevant than in other sectors. companies have on their employees, suppliers, customers and
communities, this could lead to real and transformative change.”
The sample includes companies that have electricity generation
Gerbrand Haverkamp
activities. As explained in the ACT Electric Utilities (EU) sector Executive Director, World Benchmarking Alliance
methodology: ‘The focus is on generation emissions for two main

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Companies in the Electric
Utilities Benchmark 2020

1 AES Corp Northern America United States of 15 Duke Energy Northern America United States of
America America

2 AGL Energy Australia and Australia 16 E.ON Western Europe Germany

New Zealand
17 EDP Energias de Portugal Southern Europe Portugal
3 American Electric Power (AEP) Northern America United States of
America 18 Egyptian Electricity Holding Northern Africa Egypt
Company (EEHC)
4 CEZ Group Eastern Europe Czech Republic
19 Électricité de France (EDF) Western Europe France
5 China Datang Corp Eastern Asia China
20 Eletrobras Southern America Brazil
6 China Energy Investment Group Eastern Asia China
21 EnBW Energie Western Europe Germany
7 China Huadian Corporation Eastern Asia China Baden-Wuerttemberg

8 China Huaneng Group Eastern Asia China 22 Enel Southern Europe Italy

9 China Three Gorges Eastern Asia China 23 ENGIE Western Europe France

10 Chubu Electric Power Eastern Asia Japan 24 Eskom Holdings Southern Africa South Africa

11 Chugoku Electric Power 25 Exelon Corporation Northern America United States of

Company Eastern Asia Japan America

12 CLP Holdings Eastern Asia Hong Kong, China 26 Fortum Northern Europe Finland

13 Comision Federal Central America Mexico 27 Iberdrola Southern Europe Spain

de Electricidad (CFE)
28 Inter RAO Eastern Europe Russia
14 Dominion Energy Northern America United States of
America

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Companies in the Electric
Utilities Benchmark 2020

29 Kansai Electric Power Eastern Asia Japan 42 State Power Investment Eastern Asia China
Company (KEPCO) Corporation (SPIC)

30 Korea Electric Power Eastern Asia Korea; 43 Taiwan Power Company Eastern Asia Taiwan, China
Corporation Republic (S. Korea)
(KEPCO/Hanjeon) 44 Tenaga Nasional South-Eastern Asia Malaysia

31 Kyushu Electric Power Eastern Asia Japan 45 Tohoku Electric Power Eastern Asia Japan

32 NextEra Energy Northern America United States of 46 Tokyo Electric Power Company Eastern Asia Japan
America (TEPCO)

33 NTPC South-Eastern Asia India 47 Uniper Western Europe Germany

34 Origin Energy Australia and Australia 48 Vattenfall Northern Europe Sweden

New Zealand (Vattenfall Energy Trading)

35 Ørsted Northern Europe Denmark 49 Vistra Energy Corp Northern America United States of
America
36 Pacific Gas and Electric (PG&E) Northern America United States of
America 50 Xcel Energy Northern America United States of
America
37 Perusahaan Listrik Negara (PLN) South-Eastern Asia Indonesia

38 RWE Western Europe Germany

39 Saudi Electricity Company (SEC) Western Asia Saudi Arabia

40 Southern Co Northern America United States of

America

41 SSE Northern Europe United Kingdom

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Glossary of selected ACT Electric
Utilities sector methodology terms

Decarbonisation pathway: A standard, pathway or point of reference Power Generation: The process of generating electric power from
against which things may be compared. In the case of pathways for other sources of primary energy.
sector methodologies, a sector benchmark is a low-carbon pathway
for the sector average value of the emissions intensity indicator(s) Renewable Energy: Energy from a source that is not depleted when
driving the sector performance. A company’s benchmark is a path- used, such as wind or solar power.
way for the company value of the same indicator(s) that starts at
the company performance for the reporting year and converges Science-Based Target: To meet the challenges that climate change
towards the sector benchmark in 2050, based on a principle of presents, the world’s leading climate scientists and governments
convergence or contraction of emissions intensity. (As explained agree that it is essential to limit the increase in the global average
in the methodology, the default sectoral benchmark is taken from temperature at below 2°C. Companies making this commitment
the sectoral decarbonization approach to science-based targets.) will be working toward this goal by agreeing to set an emissions
reduction target that is aligned with climate science and meets
Please note this is the use of the term in the ACT Electric Utilities the requirements of the Science-Based Targets Initiative.
sector methodology, and ‘benchmark’ has a specific meaning and
application in relation to the work of WBA and its benchmarks. The full glossary of ACT terms is available in the methodology.

Energy: Power derived from the utilization of physical or chemical

resources, especially to provide light and heat or to work machines.

Low-carbon scenario (or pathway): A 2°C scenario, a well-below

2°C scenario or a scenario with a higher decarbonisation ambition.

Power: Energy that is produced by mechanical, electrical or other

means and used to operate a device (e.g. electrical energy supplied
to an area, building etc.).

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