Looking to 2020: SMUD's Environmental Sustainability Road Map April 2017
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SMUD’S ENVIRONMENTAL SUSTAINABILITY ROADMAP
Looking to 2020:
SMUD’s Environmental
Sustainability Road Map
April 2017
SMUD 3.0 | i
LOOKING TO 2020: ii | SMUD 3.0
SMUD’S ENVIRONMENTAL SUSTAINABILITY ROAD MAP
Table of Contents
CEO letter...........................................................................................1
Introduction........................................................................................2
Connecting to the business ................................................................3
Defining the top quartile....................................................................5
Considering our value chain................................................................7
Our sustainability road........................................................................9
Ensuring success?.............................................................................10
What are we focused on?.................................................................12
• Greenhouse gas (GHG) and energy................................................16
• Climate readiness............................................................................18
• Managing impacts to shared resources ..........................................20
• Green facilities.................................................................................22
• Supply chain....................................................................................24
• Habitats and biodiversity.................................................................26
• Engagement....................................................................................28
Future growth ..................................................................................30
Recognizing current challenges........................................................31
Special acknowledgements...............................................................32
SMUD 3.0 | iii
LOOKING TO 2020: SMUD employees embrace environmental sustainability as a core leadership value. To us, environmental sustainability means delivering affordable and reliable service in a socially and environmentally responsible manner. We use science- based tactics to track and improve our operations and programs, conserve energy and water, minimize waste and pollution, and safeguard wildlife and other assets in order to protect our people, ecosystems and community. iv | SMUD 3.0
SMUD’S ENVIRONMENTAL SUSTAINABILITY ROADMAP
5-YEAR STRATEGIC PLAN
CEO letter The Environmental Sustainability team coordinates sustainability
efforts by functional groups across SMUD. Our coordination focuses
on breaking down any existing silos,The Strategic
providing thePlan is aligned
tools with, and create
and insights
Sacramento residents voted in 1923 to create necessary to consistently integrate sustainability into our business
• The Strategic Directions adopted by our
the Sacramento Municipal Utility District (SMUD), a and community, and deliver the results that demonstrate SMUD’s
community-owned power company that represents local interests. Over See a list of Strategic Directions on page
leadership.
the last century, Californians’ environmental awareness has increased • SMUD 3.0, our vision for a future-ready S
dramatically alongside resource scarcity. Our stakeholders demand that The Road Map is outlined in the following
• Thepages
North and
Star,provides our
which identifies 6 strategi
businesses like ours are stewards of the environment. Understanding cost-effective approach to transitioning towards a comprehensive
• Our business units’ 5-year and 3-year pla
that our success relies on customer loyalty and the demands of sustainability program. We will use this framework to measure and
regulators, sustainability is becoming a major component of our report on progress. Our successes and• The annual will
challenges budget and enterprise
continue to metri
operations and programs. be reported through our website via• ourOur work group
biennial goals.
Environmental
Stewardship Report and, where relevant, through the annual
The primary purpose of the Plan is to ensur
Throughout our long history, we have championed community presentations on our Strategic Directives to the Board.
organization and each of us individually—is
values and achieved notable environmental sustainability milestones.
direction and focused on the activities and
SMUD was the first large utility in California to generate 20 percent We continue to learn from our challenges, our successes and refine
important to our customers and community
of the power it supplies from renewable resources. The figure is our approach based on what works best. This Road Map provides a
continue to thrive in a challenging and unce
now approaching 30 percent and will surpass 33 percent by 2020, dynamic structure to begin integrating sustainability into our operations
demonstrating that when we identify a challenge, we continually find and across functions as we plan for aWe’ve
rapidly changing
laid future. path forward a
out an ambitious
ways to meet and exceed expectations. to measure our success between now and 2
We hope you will join us as collaborators in the success of sustainability
achieve, but SMUD is an amazing place with
Looking to the future, we recognize that there are new business drivers at SMUD and in the communities that we serve. We are reminded
and I’m confident working together collabo
transforming our industry, including increasing sophistication around through our engagement with key stakeholders, including community
the goals set out in the Plan and SMUD’s fu
sustainability and delivering a lower-carbon future. Our 5-year Strategic members, customers, and regulators, that sustainability is a collective
this together, and together we can and will
Plan presents the transformative strategies that will create SMUD 3.0. effort. Together, we take on and will meet this challenge.
customers and community. Join me as we p
Implementation of this plan will position SMUD as an innovative and
progressive environmental leader that delivers excellent customer
service at a competitive cost. This Environmental Sustainability Road
Map explains how we plan to ‘walk the talk.’
Arlen Orchard
1
5-YEAR STRATEGIC PLAN 2016 – 2020. Sacramento: SMUD, 2016. Print.
CEO and General Manager
Photo credit: James, Ken, for Comstocks, “Keeping the Lights On,”2014, available at http://www.comstocksmag.com/snap/keeping-lights
SMUD 3.0 | 1
LOOKING TO 2020:
Introduction Given these shared sustainability drivers, many of our regional and
utility peers, as well as customers, have established robust sustainability
programs that have clear multiyear goals and strategies for driving
The landscape in which we operate continues to evolve, presenting
performance. Our environmental sustainability program has been
new challenges and opportunities for integrating strategic sustainability
designed not only to continue demonstrating the leadership to which
into day-to-day operations.
SMUD is committed, but to deliver against our core business objectives
of retaining existing customers, and attracting top talent into the SMUD
Climate change has already started to reshape our communities,
workforce by delivering the sustainable energy solutions and operating
as have the responses to it. For instance, we are being challenged
in the cost- effective, sustainable manner our stakeholders demand.
through changes like Assembly Bill 32, which lays the groundwork
Further information on our environmental sustainability program and
for California’s comprehensive approach to reducing GHG emissions.
how we will involve employees across SMUD is outlined later on in the
Utilities and businesses across the state are challenged to change the
Road Map.
way they operate and to avoid emerging business risks. In response,
SMUD has already started to shift to generating more renewable power
The good news is that SMUD has already made progress in adapting
from solar and wind to reduce emissions and support resilience.
to the current landscape. The Road Map synthesizes our efforts,
helps us get ahead of emerging physical risks such as climate change
Beyond climate change considerations, we also see local and regional
and evolving regulatory expectations, and demonstrates cost-
momentum around broader sustainability topics. From the State of
effective leadership for other California businesses in environmental
California to our customers to financial analysts, many interested
sustainability.
parties are regulating, questioning, and partnering with us to deliver
broader sustainability performance.
2 | SMUD 3.0
SMUD’S ENVIRONMENTAL SUSTAINABILITY ROADMAP
Connecting to the business Some of the critical Strategic Directions from the SMUD Board of
Directors are highlighted below:
As we work to embed sustainability in our business, there are a number
of key SMUD policies that inform how we integrate environmental
Vision Statement (policy number: SD-1B)
SMUD’s vision is to be the trusted partner with our customers
sustainability. With the Road Map, SMUD is moving to a smart green
and community, providing innovative solutions to ensure energy
program that balances economics, environment, and community to
affordability and reliability, improve the environment, reduce
leverage a triple bottom line approach.
our region’s carbon footprint, and enhance the vitality of our
Our CEO continually reviews and refines our overall direction based on community.
input from the SMUD Board of Directors to guide us in the decisions
we make about SMUD’s policies and operations. Everything from our
SD-7 Environmental Leadership
Environmental leadership is a core value of SMUD. The Board
vision statement to related core values address aspects of sustainability.
is committed to environmental leadership through community
The CEO has set out a five-year strategic plan that outlines the vision engagement, continuous improvement in pollution prevention,
for a future-ready SMUD that incorporates strategic goals defined carbon reduction, energy efficiency, and conservation.
as the North Star and SMUD 3.0. The North Star further summarizes
the principles from SMUD 3.0 to set goals and measurements.
SD-9 Resource Planning
SMUD strives to provide its customer-owners with a sustainable
Sustainability comprises one of the North Star’s six points, reflecting
power supply. A sustainable power supply is defined as one that
its centrality to our business: “Sustainable future: We embrace a low
reduces SMUD’s net long-term GHG emissions, while assuring
carbon future while balancing affordability, reliability and customer
reliability of the system, minimizing environmental impacts on
choice. We are committed to sustainability in our business practices.”
land, habitat, water quality, and air quality, and maintaining
To accomplish this North Star objective, the Road Map is designed a competitive position relative to other California electricity
to bring us into the top quartile of leading California businesses in providers.
terms of sustainability practices. In reaching this goal, there are areas
where we lead and others where we take a more moderated approach
SD-10 Research and Development
To assure SMUD’s long-term competitiveness and its ability to
based on the specific drivers and strategic value to our business and
deliver innovative products and services, SMUD shall invest in
customers.
research and development projects that support its core and key
values, based on an analysis of the projects’ relative risks and their
potential benefits to SMUD customers.
SMUD 3.0 | 3
LOOKING TO 2020: 4 | SMUD 3.0
SMUD’S ENVIRONMENTAL SUSTAINABILITY ROADMAP
Going forward, it is expected that business units and departments Finally, beyond having strong sustainability programs, leaders are using
will translate the goals from the North Star into measurable goals sustainability as a business differentiator to strategically transform their
and support the projects, programs, and tactics to achieve them. The products and services. It does not just inform how they operate, but it
Environmental Sustainability Road Map outlines what SMUD will need is also a critical part of their business.
to do to meet the goal of being in the top quartile for overall business
sustainability practices. Despite the alignment on what a strong sustainability program entails,
there is no single rating system or broadly-recognized awards program
Defining the top quartile for corporate environmental sustainability that SMUD could use. Most
of the existing rating and awards systems primarily focus on the S&P
500. So, although this is an active area of research, there is no single
Key stakeholders are increasingly demanding that an enterprise like
approach that will validate SMUD’s sustainability performance on its
SMUD have a comprehensive, coherent, enterprise-wide strategy with
own.
metrics to match. Hallmarks of strong sustainability programs are as
follows: While there is no dominant externally defined and universally
accepted rating system, we have drawn on the wisdom of the Global
• A governance system for managing and integrating sustainability
Reporting Initiative, ISO 14001, and extensive benchmarking to reach
into the business
the comprehensive approach described above. The most common
• Clear processes for identifying material environmental frameworks for tracking and defining organizational sustainability are
sustainability issues listed below:
• Looking beyond direct operations at the entire value chain • Global Reporting Initiative (GRI): An international, independent
• Specific, measurable, actionable, realistic, and timely targets that organization that helps businesses understand and communicate
drive change the impact of critical sustainability issues. They are the most
widely recognized organization for corporate sustainability, and
• Implementation of programs and actions thousands of organizations across 90 countries adhere to their
• Year-over-year progress against the targets standards.
• Transparent reporting of the overall approach to sustainability and • ISO 14001: An environmental management standard that provides
results following industry best practices a systematic framework to manage the immediate and long-term
environmental impacts of an organization’s products, services,
and processes. The ISO 14001 framework further describes the
sustainable business practices in the following graphic.
SMUD 3.0 | 5
LOOKING TO 2020:
Specifically for SMUD, we benchmarked our competitors for market
share including Pacific Gas and Electric and other California utilities,
Prevent
our competitors for top talent such as Apple and Amazon, our adverse
peers amongst publicly owned utilities, and finally some of our environmental
customers in the Sacramento Region using publicly available imacts
information. The full list of organizations that we have
Mitigate
measured ourselves against include Amazon, Google, Communicate
adverse effects
Apple, Intel, the City of Sacramento, the County of to interested
on the
parties
Sacramento, Salt River Project, and Pacific Gas and organization
Electric. These organizations are the peer groups
against whom we will measure whether we are in
the top quartile. Business
From our initial benchmarking, overall maturity
varies when looking across our peer organizations.
sustainability
practices
Achieve
Amongst this group, leading organizations Fulfill
financial and
compliance
maintain comprehensive and coherent enterprise- operational
obligations
wide strategies with strong performance against benefits
published metrics. Prior to this plan and having
a comprehensive strategy, SMUD has already
demonstrated leadership ability in our GHG and
climate readiness, outpacing Pacific Gas and Electric
Enhance
in these areas. The Environmental Sustainability Road Manage
environmental
Map is designed to bridge the gaps that separate SMUD life cycle
performance
from a consolidated leadership position, demonstrable to
California utility users and the top talent it seeks to recruit to ensure
SMUD’s continued success. It includes specific metrics that will drive our
performance across functions, respond to stakeholder demands, and
advance SMUD into the top quartile of our peers.
Graphic adapted from ISO 14001:2015
6 | SMUD 3.0SMUD’S ENVIRONMENTAL SUSTAINABILITY ROADMAP
Considering our value chain
Increasingly, sustainability and responsible operations are understood to include not just local operations, but
an organizations’ complete value chain, from sources and suppliers to end users (customers). This is what is
meant by “enterprise wide.” At each point along our value chain, we use resources and create environmental
impacts such as emissions and waste. Each of these points represents an opportunity to integrate environmental
responsible tactics. By broadly considering hidden sustainability risks in the value chain, we are working to
transparently address and internalize sustainability across our organization. The Road Map prioritizes our own
operations and works outward from there to include environmental sustainability across our value chain.
Resources in
Sources, Generation Transmission Distribution Customers Consumers
Suppliers
Emissions and waste out
SMUD 3.0 | 7LOOKING TO 2020: 8 | SMUD 3.0
SMUD’S ENVIRONMENTAL SUSTAINABILITY ROADMAP
Our sustainability road
At SMUD, we strive to be a good neighbor and actively contribute • Be cost-effective: We are approaching environmental
to strengthening our community through our strong environmental sustainability in the economic context of our business and
programs. We plan to use the Road Map to provide greater identifying cost-effective sustainability solutions that align with
transparency and look for new ways that all of us can partner to overall business and community objectives. We are working to
achieve a sustainable business. The Road Map is organized around the simultaneously manage environmental and financial obligations
following principles: and opportunities.
• Utilize a science-based approach: Our responsibility as leaders
• Focus on what matters: To organize our approach, we have
extends beyond just thinking about what we might easily
mapped what is important to SMUD and our stakeholders. We are
accomplish, to confronting larger environmental challenges in the
paying attention to where SMUD has the greatest impact because
context of our business. Drawing upon emerging best practices,
these provide the greatest opportunities for improvement.
we are using science-based approaches to set targets. As an
• Build momentum: Our sustainability program has evolved organization filled with scientists and engineers, these science-
as various individuals throughout the organization have based approaches align with our business framework and use
demonstrated leadership and bring new ideas and innovation logical and rational methods to setting targets.
forward. The Road Map links the efforts various teams are making
• Measure progress: By using clear metrics and a dashboard to
to enact change on a larger scale, further promote innovation,
help chart progress, we use data to measure performance and
pilot new approaches, and identify short- and long-term wins.
make adjustments to the tactics that we undertake as needed.
The five-year journey outlined in the Road Map has been designed to create the structure
required to make important progress, and also allow flexibility to accommodate innovation
and learning as we push forward. SMUD’s success will be one that every employee across our
organization takes part in and we invite you to join us on this journey.
SMUD 3.0 | 9LOOKING TO 2020: Ensuring success To us, ‘success’ means engaging SMUD workforce holistically across various levels, measuring progress and reviewing the Road Map as necessary, and sharing our successes with stakeholders inside and outside organization to ensure visibility of our work. The Environmental Sustainability team oversees transparent implementation of this plan across SMUD. We continuously seek input to ensure that the Road Map is inclusive and consistently aligns with the highest value for SMUD. The core functions and outputs of the Road Map are: Executive and Director reviews: Executives and Directors provide valuable perspectives, including business insight and viewpoints, of key functions across SMUD. They provide structured feedback to the Environmental Sustainability team during annual status updates, including our progress against the environmental sustainability targets. Environmental Sustainability team: Our core team defines the strategic direction and facilitates engagement with internal and external stakeholders. They also administer the environmental sustainability program and track its progress. Steering and championing the program inside and outside of SMUD, our core team consists of: • Pat Durham (Patrick.Durham@smud.org) • Laura Fisher (Laura.Fisher@smud.org) • Jose Bodipo-Memba (Jose.Bodipo-Memba@smud.org) 10 | SMUD 3.0
SMUD’S ENVIRONMENTAL SUSTAINABILITY ROAD MAP
SMUD Green Measuring Communicating
Team engagement performance progress
Our Green Team is composed of Progress is assessed annually using Success and challenges
members from functional groups across the SMUD dashboard and tactics against the Road Map are
the organization from customer service tool. Through this platform, we are reported through our biennial
to facilities to IT because we believe able to take stock of where we are Environmental Stewardship Report
that everyone at SMUD has valuable and appropriately recalibrate the and in annual presentations to the
skills to contribute to this effort. The actions that need to be taken to Board. When requested by key
Green Team meets at least quarterly ensure that we meet our targets. stakeholders, we work to supply
to continue to guide the program, relevant data. More information
review progress, and take action on • Dashboard Tool on how we communicate progress
the targets. The Green Team acts as (iNet hyperlink) and engage internal and external
liaison between the functional groups • Data Handling Protocol stakeholders is outlined in our
they represent across the business and (iNet hyperlink) Environmental Sustainability
the Environmental Sustainability team. Communications Plan.
They also communicate back out to
their teams on key concepts. Green • 2015 Environmental
Team members are also responsible for Stewardship Report (website
taking the lead in pushing forward key hyperlink)
tactics. A Green Team membership list • Environmental Sustainability
and meeting notices and minutes are Communications Plan (iNet
available through the iNet. hyperlink)
• Green Team (iNet hyperlink)
Photo credit (previous page): James, Ken, for Comstocks, “Keeping the Lights On,”2014, available at
SMUD 3.0 | 11
http://www.comstocksmag.com/snap/keeping-lightsLOOKING TO 2020:
Our focus
SMUD’s commitment to the environment is evident every day. We
integrate it into how we work, the materials we buy, and the decisions
we make. We are always looking to further reduce our impact on the
environment and to conserve resources for future generations, for the
benefit of both our customers and our community.
Given our commitment to ensure that our Road Map is focused
on key impacts and opportunities, SMUD identified seven key
environmental sustainability priorities. A wide range of environmental
sustainability issues were narrowed down to a short list through
research, engagement with the SMUD Green Team, and validation
from the directors and executive team. These seven key environmental
sustainability areas are the most important to SMUD at an enterprise
level, and form the chapters of this report. We have defined areas Following best practices in sustainability, we have targeted the key
of importance as being those that have active regulatory activity, are areas that are most meaningful to our business. This focus ensures that
being scrutinized by non-governmental organizations (NGOs), are the we are addressing regulatory compliance, emerging risks, customer
most impacted by SMUD operations and are considered critical to expectations, and community needs. In the long-term, having a
environmental sustainability by our main stakeholders. Though there strong social license to operate will reduce community opposition and
are many environmental sustainability areas that we could address, ensure that everything from capital projects to business changes are
we worked diligently to prioritize essential areas based on our unique supported by the broader community. Tactics that might be important
operating context. at an operational level will be addressed through individual functional
groups.
2
Khan, Mozaffar and Serafeim, George and Yoon, Aaron S., Corporate Sustainability: First
Evidence on Materiality (March 9, 2015). The Accounting Review, Forthcoming. Available at
SSRN: https://ssrn.com/abstract=2575912
12 | SMUD 3.0SMUD’S ENVIRONMENTAL SUSTAINABILITY ROAD MAP
Environmental sustainability priority areas:
Across all the areas that we
GHG and energy
focus on, there are synergies
that we have leveraged as
part of the Road Map. For
Climate readiness example, value chain tactics
result in minimizing waste
and increase the recycled
content of the materials that
Managing impacts to shared resources we buy, which helps us meet
our waste diversion target.
Similarly, the tactics that we
Impacts to Shared California State
es Resources (2) Alignment take to reduce the use of
Green facilities potable water enhance our
climate readiness.
Supply chain
ncy Impacts to Shared Habitats and Biodiversity
Resources
Habitats and biodiversity
n Climate Readiness Engagement
Engagement
SMUD 3.0 | 13
GHG (Old) GHG (New)LOOKING TO 2020: 14 | SMUD 3.0
SMUD’S ENVIRONMENTAL SUSTAINABILITY ROADMAP
How to read the road map
Supply Chain Climate Readiness Engagement
The chapters in the Road Map cover the priority areas. The following provides a guide to the structure of the Road Map.
Baseline
GHG (Old)
Supply Chain (Old)
GHG (New) Provides a summary of available
Vision
data as a reference point
Introduces how we Greenhouse Gas BASELINE:
and Energy against which the target is being
POWER GENERATED
FROM RENEWABLE SOURCES
define the sustainability 50%
measured. Many of the future
challenge and gives Vision: 33%
projections are estimated values
insights as to the 20%
Efforts to mitigate the impacts of climate change are transforming the
way that SMUD does business by driving internal investments, policies,
that we will continue to refine.
sustainability context and and procedures in renewable energy and energy efficiency. 2010 2020 2030
why we are prioritizing Strategies
Leadership to date: Strategies and tactics:
this particular issue. The State of California is a national leader in GHG and energy Target opportunities for GHG emission reductions. Presents the overarching
regulation, and, in many cases, SMUD’s goals are even more ambitious
• Regularly review options to improve the efficiency of existing
than those outlined by California’s legislature. Not only do we have
generation assets and prioritize improvements based on the price
strategy used to drive action
strong existing targets, but we have also continually exceeded
of carbon
Leadership to date expectations. For example, SMUD was the first large utility in California and meet targets.
to generate 20 percent of its power supply from resources classified • Identify if offsets are a cost effective and beneficial way to meet
Provides a summary as renewable by the state. We have consistently trended ahead of the GHG emissions reduction target
California’s renewable energy targets and currently, 50 percent of
• Invest in continued research and development to identify and
of past successes that SMUD’s power comes from non-carbon-emitting resources.
integrate new renewable and energy efficiency products and
Tactics
service into our service offerings to customers
SMUD has had, which Targets:
Diversifying our energy portfolio to include more renewable energy. Offers an initial list of tactics
forms the foundation • Market driven: Reduce GHG emissions 90% below 1990 levels
Green Facilities
Impacts to Shared
Resources (2)
California State
Alignment
by 2050 • Continue to identify opportunities to build more renewable energy used to drive action to meet
for the program. In the Resource Efficiency
(Old)
Impacts to Shared
Resources
Habitats and Biodiversity
generation in SMUD service areas
• Operations driven: Reduce GHG emissions not related to the targets. It is expected that
Road Map, we are not Supply Chain
power generation 2%
Climate Readiness Engagement Green Facilities
Impacts to Shared
Resources (2)
California State
Alignment
• Promote cost effective, clean distributed generation through
SMUD programs as our business continues to
trying to recreate or
GHG (Old) Resource Efficiency Impacts to Shared Habitats and Biodiversity
GHG (New)
Supply Chain (Old) (Old) Resources
• Increase the expansion and diversification of SMUD’s Solar Shares
Supply Chain Climate Readiness Engagement
evolve, we will continue to
reinvent sustainability program
Impacts to Shared California State
Green Facilities Resources (2) Alignment
= California State Alignment
update and refine these tactics.
GHG (Old) GHG (New)
Supply Chain (Old)
Impacts to Shared
but rather elevate and
Resource Efficiency Habitats and Biodiversity
(Old) Resources
Supply Chain Climate Readiness Engagement
highlight success stories Supply Chain (Old)
GHG (Old) GHG (New)
across the organization
2020 Targets
to broaden and deepen
our engagement around Lists 2020 goals across key sustainability areas that are specific, measurable, actionable, realistic, and timely
sustainability. (SMART). The targets that are included as part of the Road Map text are just a snapshot of a larger target
summary that includes the target, cost savings, environmental benefits, community/employee benefits, and
if appropriate, regulatory drivers with citations. In the Road Map, we have specifically highlighted where Green Facilities
Impacts to Shared
Resources (2)
California State
Alignment
these targets align with existing or signaled California regulation through the use of a California icon.
Resource Efficiency Impacts to Shared Habitats and Biodiversity
Resources
SMUD 3.0 | 15
(Old)
Supply Chain Climate Readiness EngagementLOOKING TO 2020:
GHG (New)
2020 GHG and energy targets:
Greenhouse gas
and energy
• Market driven: Reduce GHG emissions 90% below 1990 levels
by 2050
• Operations driven: Reduce GHG emissions not related to
Vision:
Impacts to Shared California State
Green Facilities Resources (2) Alignment
power generation 2%
Resource Efficiency Impacts to Shared Habitats and Biodiversity
Efforts to mitigate the impacts of climate change are transforming the
(Old) Resources
way that SMUD does business by driving internal investments, policies, • Renewable energy: Renewable energy will represent 50% of Supply Chain Green Facilities
Climate Readiness
Impacts to Shared
Engagement
Resources (2)
California State
Alignment
and procedures in renewable energy and energy efficiency. the generation mix by 2030
GHGResource
(Old) Efficiency Impacts to Shared Habitats and Biodiversity
GHG (New)
Supply Chain (Old) (Old) Resources
Our performance on this aspect of sustainability is critically important, • Energy efficiency: Achieve energy efficiency equal to a 2% per
Impacts to Shared California State Supply Chain Climate Readiness Engagement
Green Facilities Resources (2) Alignment
not only to us, but to many of our customers. For our customers, the year reduction
electricity provided by SMUD represents a major part of their GHG Resource Efficiency
(Old)
Impacts to Shared
Resources
Habitats and Biodiversity Supply Chain (Old)
GHG (Old) GHG (New)
emissions footprint, so many of the businesses and local municipalities • Transparency: Provide greater transparency and support
Supply Chain Climate Readiness Engagement
that operate in SMUD service territory are actively relying on SMUD to customer requests by responding to the Carbon Disclosure
help meet their emissions reduction targets. Our engagement on GHG Project (CDP) annually Supply Chain (Old)
GHG (Old) GHG (New)
emissions makes us active partners in helping our customers meet their
targets and, by extension, in our customers’ sustainability journey. Green Facilities
Impacts to Shared
Resources (2)
California State
Alignment
= California state alignment
Leadership to date:
Resource Efficiency Impacts to Shared Habitats and Biodiversity
(Old) Resources
= Above california target
Supply Chain Climate Readiness Engagement
The State of California is a national leader in GHG and energy
regulation, and, in many cases, SMUD’s goals are even more ambitious Supply Chain (Old)
GHG (Old)
Baseline:
GHG (New)
Power generated
than those outlined by California’s legislature. Not only do we have
from renewable sources
strong existing targets, but we have also continually exceeded 50%
expectations. For example, SMUD was the first large utility in California
to generate 20 percent of its power supply from resources classified 33%
as renewable by the state. We have consistently trended ahead of 20%
California’s renewable energy targets.
2010 2020 2030
16 | SMUD 3.0SMUD’S ENVIRONMENTAL SUSTAINABILITY ROADMAP
• Promote cost effective, clean distributed generation through
Baseline:
GHG emissions SMUD programs
• Increase the expansion and diversification of SMUD’s Solar Shares
Our GHG -40%
program
emissions were
350,000 metric -90%
• Identify net carbon free resources, including large hydroelectric
tons in 1990
resources and biogas
Increase the implementation of energy efficiency.
• Acquire as much cost effective and reliable energy efficiency as
1990 2020 2050 feasible through programs that optimize value for all customers
• Conduct residential and commercial distributed energy resource
Our GHG emissions will be 90% below our 1990 emissions by 2050
pilot projects
Strategies and tactics:
• Use energy efficiency metering and interval data to improve
portfolio planning
Target opportunities for GHG emission reductions.
• Reduce our operational emissions footprint to promote a culture
• Regularly review options to improve the efficiency of existing of awareness. Leverage fleet, LEED upgrades, supply chain, and
generation assets and prioritize improvements based on the price engagement tactics to reduce employee emissions
of carbon
• Reduce the gallons of fuel used by 2 percent through robust trip
• Identify if offsets are a cost effective and beneficial way to meet planning and optimization
the GHG emissions reduction target
Demonstrate climate leadership through enhanced transparency
• Invest in continued research and development to identify and and communication with external stakeholders.
integrate new renewable and energy efficiency products and
services into our service offerings to customers • Complete the 2017 CDP submittal (August 2017)
• Demonstrate the alignment between our targets and emerging
Diversifying our energy portfolio to include more renewable energy.
industry standards, such as the Science-Based Target certification
• Continue to identify opportunities to build more renewable energy and We Mean Business Coalition
generation in SMUD service areas
• Find opportunities to demonstrate regional climate change
leadership
SMUD 3.0 | 17LOOKING TO 2020:
Climate Readiness Engagement
Leadership to date:
Climate readiness In 2008, SMUD produced the first targeted climate readiness study
and adaptation strategy, which identified a series of climate readiness
actions. The review included a “state of the science” assessment to
Vision: update scientific findings and incorporate lessons from the California
Climate Adaptation Strategy, Adaptation Policy Guide, and a myriad of
GHG (Old) GHG (New)
Climate change will have profound impacts on our business by other resources. The analysis focused on the physical risks most likely
increasing energy demand at the same time that generation and to impact SMUD power generation and operations, and incorporated
distribution efficiency will fall. In the future, more resources will be feedback and perspectives from SMUD stakeholders. This study
needed to produce the same amount of energy while major weather was updated in 2016 and now includes a Readiness Action Plan
events could pose a threat to infrastructure. These risks to our business with components addressing Community Engagement, Enterprise
range from shifting wind patterns to wildfires. Programs, Capital Projects and Operational Initiatives.
Given the challenges ahead, we are working to understand and Using these climate readiness study as a foundation, we have been
leverage climate science to make our operations more resilient. We able to make broad progress on integrating climate change into our
are prioritizing actions to address the most critical impacts of climate decision-making processes. In particular, we have been integrating
change and the most vulnerable components of our power generation climate change into our emergency preparedness process and are
system and operations. With these actions, we aim to improve SMUD’s mitigating risks through our investments in grid resilience.
readiness on behalf of our ratepayers, community, and stakeholders.
2020 Climate readiness targets
• Develop a program to ensure climate readiness across all
operations and functional groups at SMUD to ensure smart
Green Facilities
Impacts to Shared
Resources (2)
California State
Alignment
investments over time
Resource Efficiency Impacts to Shared Habitats and Biodiversity
(Old) Resources
Impacts to Shared California State
Green Facilities Resources (2) Alignment
= California State Alignment
Supply Chain Climate Readiness Engagement
Resource Efficiency Impacts to Shared Habitats and Biodiversity
(Old) Resources
GHG (Old) GHG (New)
Supply Chain (Old)
Supply Chain Climate Readiness Engagement
GHG (Old) GHG (New)
Supply Chain (Old)
18 | SMUD 3.0SMUD’S ENVIRONMENTAL SUSTAINABILITY ROADMAP
Baseline:
Strategies and tactics:
Climate readiness Leverage the best available climate science to make decisions.
• Update the “state of the science” assessment every four years
We produced
• Continue to partner with multiple local agencies on flood data
our first climate
analysis and preparedness planning
readiness and
adaptation
Take proactive measures to make SMUD more resilient.
strategy in 2008
with updates • Conduct research into the impacts of sustainable forest
conducted in
management techniques on wildfire risk reduction and streamflows
2012 and 2016
• Identify systematic opportunities to integrate climate change
projections in internal program planning and capital budget
development and approval
• Investigate opportunities to employ resiliency bonds to finance
further readiness measures
• Support and participate in the Capital Region Climate Readiness
Baseline:
Flood preparedness Collaborative to assist public and private partners in the region
improve overall climate readiness
We partner with
both the City
and County of
Sacramento on
flood data analysis
and preparedness
planning
SMUD 3.0 | 19LOOKING TO 2020: California State
Impacts to Shared
Resources (2) Alignment
LEED certification and was only achieved through the deployment of
Managing impacts to innovative approaches including energy performance, water efficiency,
shared resources reclaimed irrigation water, and recycled materials.
2020 managing impacts targets:
Vision:
Impacts to Shared • Air quality: Establish triple bottom line sustainability guidelines
Habitats and Biodiversity
Resources for selling, retiring, or leasing air quality emission reduction
To be a good environmental steward, SMUD continually reduces its
credits
impacts to air quality, water, and waste associated with generating
power by improving efficiency and minimizing our impacts.
• Large water users: Reduce potable water use 20% by 2020
• Air quality: Improving efficiency includes the reduction and at major facilities (including Headquarters, Customer Service,
management of other air emissions including nitrogen oxides, 59th Street, ECOC, Hedge, and Fresh Pond) using more than Green Facilities
Impacts to Shared
Resources (2)
California State
Alignment
sulfur oxides, and particulate emissions to support community 5,000 gallons of potable water annually
Resource Efficiency Impacts to Shared Habitats and Biodiversity
(Old) Resources
health.
Climate Readiness Engagement • Small water users: Apply a checklist for behavior and Supply Chain Climate Readiness Engagement
• Water: Ensuring the short- and long-term quality and availability technology-based water efficiency upgrades to 80% of small
of water for other uses, especially given a changing climate in SMUD sites using less than 5,000 gallons of potable water
Green Facilities
Impacts to Shared California State
Supply Chain (Old)
GHG (Old) GHG (New)
Resources (2) Alignment
California, is critically important for utilities in the state. annually
Resource Efficiency Impacts to Shared Habitats and Biodiversity
(Old) Resources
• Waste: Management and reduction of hazardous (nuclear, poles,
transformer oil, and universal) waste and all other non-hazardous • Water at generation sites: Reduce potable water use for
Supply Chain Climate Readiness Green Facilities
Engagement
Impacts to Shared
Resources (2)
California State
Alignment
waste (composting, recycling, and landfill waste) reduces generation by 15%
GHG (Old) Impacts to Shared
GHG Resource
(New) Efficiency Habitats and Biodiversity
Supply Chain (Old) (Old) Resources
workplace exposure and pollution.
GHG (Old) GHG (New) • Waste: Explore the possibility of establishing a composting Supply Chain Climate Readiness Green Facilities
Engagement
Impacts to Shared California State
Alignment
Leadership to date:
Resources (2)
program for office buildings
GHG (Old) Resource Efficiency Impacts to Shared Habitats and Biodiversity
GHG (New)
Supply Chain (Old) (Old) Resources
Impacts to Shared California State
Green Facilities Resources (2) Alignment
We have led the way in developing sustainable buildings with several • Waste: Divert or reduce 75% of non-hazardous waste Supply Chain Climate Readiness Engagement
recent construction projects, which provide a blueprint of what is Resource Efficiency
(Old)
Impacts to Shared
Resources
Habitats and Biodiversity
possible in green design. Two of SMUD’s largest facilities – the East Supply Chain (Old)
GHG (Old) GHG (New)
Supply Chain Climate Readiness Engagement
Campus – Operations Center (ECOC) and the Customer Service
Impacts to Shared California State
Green Facilities Resources (2) Alignment
= California State Alignment
Center (CSC)– are aligned with Leadership in Energy & Environmental Resource Efficiency
(Old)
Impacts to Shared
Resources
Habitats and Biodiversity
Supply Chain (Old)
GHG (Old) GHG (New)
Design (LEED) Platinum requirements. Platinum is the highest level of
Supply Chain Climate Readiness Engagement
20 | SMUD 3.0 Supply Chain (Old)
GHG (Old) GHG (New)SMUD’S ENVIRONMENTAL SUSTAINABILITY ROADMAP
Baseline: • Develop and implement a policy to ensure the permanent
Water use in 2014 reduction of air quality associated with the use of emissions
reduction credits
17.8
Sacramento Cogeneration Facility
(Procter & Gamble)
million Reduce water use at our large office facilities.
gallons
• Conduct a water audit of key facilities
21% FACILITIES • Develop xeriscaping or low-water landscaping specifications
51%
Consumnes • Identify specifications for purchases of water-related equipment
SPA Campbell
Power
19% Soup • Install low-water fixtures
Plant 1,529
Cogeneration
Facility
million Continue to minimize impacts at small locations including
10% gallons substations.
Carson Ice
Cogeneration Facility • Synthesize key items for the checklist
GENERATION
• Pilot opportunities for potential inclusion on the checklist
Baseline: Focus on emerging opportunities to reduce potable water use in
Landfill diversion generation.
• Join ImagineH20’s Beta Partner Program to vet the latest
Landfill 75% innovations in promising water technologies
diversion 52%
rate for • Connect with local water districts to identify additional
non-hazardous opportunities to use non-potable water for generation
waste
2014 2020 • Develop a plan to diversify beyond potable water sources to be
more resilient to fluctuations in water availability in the event of a
drought
Strategies and tactics:
Minimize waste through reducing, reusing, and recycling.
Identify opportunities to leverage air quality emission reduction
• Identify opportunities to compost
credits.
• Conduct a waste audit and implement recommended actions
• Research existing examples and opportunities for sustainability
guidelines around the future sale of emissions reduction credits • Develop a replicable system for waste accounting and tracking
SMUD 3.0 | 21LOOKING TO 2020:
Supply Chain Climate Readiness Engagement
2020 value chain targets
Value chain • Include current paragraph on sustainable environmental
procurement in 80% of solicitations (excluding Supplier
Education and Economic Development (SEED) providers)
Vision: GHG (Old) GHG (New) • Integrate sustainability into the specification and evaluation in
Supply Chain (Old)
With an annual spend of over $400 million, we have an opportunity to 80% of proposals (excluding SEED providers)
ensure that we are reducing both our direct and indirect environmental
footprint by incorporating sustainability into our purchasing decisions.
Baseline:
With this in mind, SMUD is prioritizing the integration of environmental
Supply chain sustainability
sustainability and total life cycle costs and impacts. For example, if we
buy a cheaper vehicle but it is not fuel efficient, we may end up paying
more to operate this vehicle over the operational lifetime than the
upfront savings is worth. In addition, there were more environmental
impacts.
80%
of our solicitations and proposals
will include sustainability
Leadership to date: information by 2020
SMUD has drafted a Sustainable Purchasing Program (SPP) Policy to
reflect SMUD’s continuing commitment to buy products and services in (excluding Supplier Education and
Economic Development providers)
a manner that reflects core values of fiscal responsibility, social equity,
and environmental sustainability.
We have a Sustainable
Purchasing Program Policy
22 | SMUD 3.0SMUD’S ENVIRONMENTAL SUSTAINABILITY ROADMAP
Strategies and tactics: Support the integration of sustainability into procurement.
• Update SMUD’s sustainability section in RFPs to encourage
Ensure SMUD is supplied with environmentally sustainable
suppliers to propose cost-effective environmentally sustainable
alternatives from the outset.
alternatives
• Establish a sustainable procurement policy
• Ensure the sustainability section is consistently included in RFPs
• Set standards to ensure the consistent purchasing of
• Provide training and share best practices on integrating
environmentally sustainable goods
sustainability into RFPs
• Partner with other utilities and join supplier organizations to share
• Communicate SMUD’s environmental sustainability expectations
best practices
to potential suppliers on the website
• Leverage Salt River Project’s investment recovery operation for • Recognize the annual outstanding contributions of a supplier or
scrap metal as a model to minimize the purchasing of excess SMUD employee to advance sustainable procurement
materials
• Participate in the Electric Utility Industry Sustainable Supply Chain
• Leverage software solutions to manage data, track progress, and Alliance ( EUISSCA) working group to advance industry wide
make programmatic changes sustainability initatives
Focus on the suppliers with the largest impacts.
• Partner with top-tier suppliers to refine products and drive down
lifecycle impacts of SMUD operations, products, and services
• Where relevant, integrate product-specific sustainability
requirements and metrics into the Request for Proposal (RFP)
process
SMUD 3.0 | 23LOOKING TO 2020:
Impacts to Shared California State
Green Facilities Resources (2) Alignment
Leadership to date:
Green facilities SMUD’s strength has always been our talented and engaged
employees who lead the way in sustainability. For example, our
Fleet Operations team has been piloting and developing innovative
new approaches and technologies to provide services that deliver
Vision: Impacts to Shared safe, reliable, and environmentally friendly transportation. They
Resource Efficiency Habitats and Biodiversity
SMUD is
(Old) an important Resources
member of the Sacramento community, which have taken a new look at the fleet using a data driven approach to
cares about environmental sustainability. As such, we strive to be a understand trends and look for opportunities.
leader in the region by making how we operate our facilities a model
Our Fleet Operations team has outlined an ambitious plan to
for other green businesses.
right size and convert the fleet to low emission vehicles. There
The tactics listed in this area provide opportunities for employees are already 19 electric vehicles in the fleet and this is expected to
across SMUD to take part in our sustainability work, and are vital to increase by over 400 percent in the next five years due to SMUD’s
integrating sustainability into our shared culture. Fleet: California equipment purchase policy, which requires vendors to provide
isSupply
movingChain
towards zero emissions from light-duty vehicles.
Climate Readiness We are
Engagement the cleanest emission technology available. Using this approach,
exploring new vehicle fleet technologies and working to transform the Fleet Operations is on track to meet its target of only purchasing
fleet to meet the needs of the future. replacement light duty vehicles that are all electric, hybrid,
alternative fuel, or ultra-low emissions.
• Fleet: We focus on delivering our services as efficiently as possible
and have been leading the way in using data driven approaches to
green our fleet. Baseline:
Sustainability features of the
• Design and Construction: We design and build green facilities to East Campus Operations Center
GHG (Old) GHG (New)
Supply Chain
ensure(Old)
we manage our environmental impacts throughout the life
of the building. • 1.1-megawatt photovltaic system
• LED lighting throughout the facility
• Green Offices: We can ensure sustainable operation of SMUD
facilities from the printer paper to the overhead lighting. • Geothermal pump and radiant
cooling and heating systems
• Advanced window design
24 | SMUD 3.0SMUD’S ENVIRONMENTAL SUSTAINABILITY ROADMAP
2020 Green facilities targets Strategies and tactics:
• Fleet: Continue to pursue the best available technology and Green Facilities
Impacts to Shared
Resources (2)
California State
Alignment
Continue to shift to a sustainable fleet.
fuels on the market to reduce fleet emissions
Resource Efficiency
(Old)
Impacts to Shared
Resources
Habitats and Biodiversity
• Right size the fleet
• Fleet: Pilot opportunities to make the medium and heavy duty
Green Facilities
Impacts to Shared
Resources (2)
California State
Alignment Supply Chain Climate Readiness Engagement
• Increase the number of electric vehicles as part of planned
fleet more sustainable replacements
Resource Efficiency Impacts to Shared Habitats and Biodiversity GHG (Old) GHG (New)
(Old) Resources Supply Chain (Old)
• Design and construction: Adopt SMUD-wide green building • Pilot alternative and new technologies
Supply Chain Climate Readiness Engagement
standard policy so that all buildings are consistently designed • Incentivize trip reductions, public transport use, and carpooling
and constructed to align with SMUD’s sustainability vision
GHG (Old) GHG (New)
Supply Chain (Old)
Institutionalize our approach to sustainable facilities through the
• Green office: Certify all of SMUD’s major facilities under the adoption of consistent and externally recognized policies.
California Green Business, Business Environmental Resource • Develop a green building standard for major renovations and new
Center (BERC), or equivalent green office program construction
Impacts to Shared California State
Green Facilities Resources (2) Alignment
= California State Alignment • Complete the California Green Business, BERC, or equivalent
Resource Efficiency
(Old)
Impacts to Shared
Resources
Habitats and Biodiversity
checklist for major office locations
Supply Chain Baseline:
Climate Readiness Engagement
Electric vehicles
Supply Chain (Old)
GHG (Old)
in our fleet
GHG (New)
Baseline:
We will >80 East Campus
Operations Center
expand our
electric fleet
vehicles
The East Campus is projected
to more
to avoid 3,200,000 pounds
than 80 19 vehicles of carbon dioxide emissions
vehicles by annually.
2020
2010 2020
SMUD 3.0 | 25LOOKING TO 2020:
Habitats and Biodiversity
Biodiversity and
bank at Rancho Seco, was one of SMUD’s most forward thinking
environmental activities. The mitigation bank protects all 1,132 acres
habitat conservation of land from future development and restores habitat that supports
wildlife and native plant species. The market value of the Mitigation
Bank is approximately $26 million in endangered species and habitat
Vision: mitigation credits. This creates a “bank” of credits SMUD can use to
offset the environmental impacts of future projects associated with our
Engagement
As part of our business, we are conveying power over ecologically own operations or those of third parties.
varied locations, and our infrastructure can have unintended
2020 Biodiversity and habitat targets
consequences on habitats and biodiversity. For SMUD, our operations
cover a lot of ground since there are more than 900 square miles in our
service territory and we have more than 4,300 miles of overhead power • Using the Green Zone Map, the Environmental Workflow
lines. Integration Program, and CEQA to identify, monitor, and
We are committed to working to ensure operations and facilities have mitigate 100% of any potential environmental impacts
aGHG
reduced associated with field maintenance and new work reducing the
(New)impact to ecosystems and biodiversity through strategies
Impacts to Shared California State
Green Facilities Resources (2) Alignment
including impact minimization, habitat avoidance planning, habit risk of encroachment on sensitive habitats or ecosystems
Resource Efficiency Impacts to Shared Habitats and Biodiversity
(Old) Resources
restoration and creation, mitigation banking, avian and bat protection, • Adopt the Habitat Conservation Plan and precautionary
Green Facilities
Impacts to Shared California State
Resources (2) Alignment
and endangered/protected species monitoring. principles around habitats and biodiversity
Supply Chain Climate Readiness Engagement
Resource Efficiency Impacts to Shared Habitats and Biodiversity
(Old) Resources
Leadership to date:
GHG (Old) GHG (New)
Supply Chain (Old)
Impacts to Shared California State
Green Facilities Resources (2) Alignment
Supply Chain Climate Readiness Engagement
= California State Alignment
SMUD actively monitors impacts to biodiversity and habitats using a Resource Efficiency
(Old)
Impacts to Shared
Resources
Habitats and Biodiversity
Supply Chain (Old)
GHG (Old) GHG (New)
“green zone” map to automatically flag projects in sensitive plant and
Supply Chain Climate Readiness
animal species areas for further review. This process helps us assess and
Engagement
mitigate environmental concerns across the SMUD service territory. Supply Chain (Old)
GHG (Old) GHG (New)
In some cases, the impacts are unavoidable and SMUD has established
proactive mitigation strategies that include the development of
an Avian and Bat Protection Plan, an Eagle Conservation Plan, a
Habitat Conservation Plan, and the establishment of the Nature
Preserve Mitigation Bank at Rancho Seco. The 1,132 acre mitigation
26 | SMUD 3.0You can also read
