Southern Company (the) · NYSE:SO
Southern Company (the) — ESG Presentation (November 2022)
28 slides from Southern Company (the)'s sustainability presentation, November 2022
Slide 1: Shareholder Sustainability Update
Shareholder Sustainability Update November 2022 Learn more: investor.southerncompany.com and southerncompany.com/sustainability
Slide 2: We provide clean, safe, reliable, affordable energy and customized solutions
We provide clean, safe, reliable, affordable energy and customized solutions Capabilities in 50 States 7 Electric & Natural Gas Utilities 9 Million Customers Approximately 27,300 Employees Approximately 43,000 MW of Generating Capacity In this presentation, the terms we, us and our all refer to Sout
Slide 3: Value Proposition
Value Proposition Southern Company’s strategy is to maximize long-term value to shareholders through a customer-, community- and relationship-focused business model that produces sustainable levels of return on energy infrastructure Key financial objectives ✓ Superior risk-adjusted total 74 years Di
Slide 4: Premier State Regulated Electric and Gas Utilities
Premier State Regulated Electric and Gas Utilities Atlanta Gas Light About 90% of Chattanooga Gas earnings and cash Nicor Gas Virginia Natural Gas flow come from our state-regulated ▪ Our electric and gas utilities serve customers in 6 states utility operations ▪ Electric utilities regulated by stat
Slide 5: Thoughtful scenario planning process guides fleet transition to achieve net zero target
Thoughtful scenario planning process guides fleet transition to achieve net zero target ▪ Scenario planning process has been in place since 2008 and ▪ Each operating company is committed to reliability serves as basis for integrated resource planning at state- and affordability while adopting new te
Slide 6: ESG Highlights
ESG Highlights Environmental ▪ Progress toward 2030 and 2050 GHG emission reduction goals, including planned retirement of significant coal generation and addition of zero-carbon resources, and expanding disclosures on emissions (Slides 7-13) ▪ R&D team continues to lead public/private consortiums r
Slide 7: Long-term GHG goal of net zero by 2050
Environmental Long-term GHG goal of net zero by 2050 A path to net zero ▪ We expect our path to net zero to be achieved through: – Continued coal fleet transition – Utilization of natural gas to enable fleet transition – Further growth in portfolio of zero- carbon resources – Enhanced energy efficie
Slide 8: 50% reduction goal well in advance of 2030
Environmental We expect to consistently achieve our 50% reduction goal well in advance of 2030, and possibly as early as 2025 Annual energy mix • Energy mix percentages include non-affiliate power purchase agreements. *In 2020, the combination of the COVID-19 pandemic and relatively mild weather • R
Slide 9: Coal retirements since 2007 demonstrate significant fleet transition
Environmental Coal retirements since 2007 demonstrate significant fleet transition Number of Coal Units Coal Capacity Megawatts (MW) (Nameplate) 66 91% 20,457 87% reduction reduction in the in coal number of capacity* coal units* 9,799 8,873 18 16 4,430 8 2,670 6 2007 2020 2022 2028E* 2035E* 2007 20
Slide 10: Strong historical growth in renewables portfolio
Environmental Strong historical growth in renewables portfolio, with significant future additions expected >17,000 MWs Over 300% increase in renewable resources <5,000 MWs 2015 2016 2017 2018 2019 2020 2021 2024E* 2030E* Solar Wind Hydro Other Includes owned and contracted resources including 100% c
Slide 11: Vogtle Units 3 & 4 will provide carbon-free energy for 60-80 years
Environmental Vogtle Units 3 & 4 will provide carbon-free energy to customers for 60 - 80 years Plant Vogtle Units 3 and 4 will be the first new nuclear units built in the United States in three decades ▪ Units 3 and 4 will generate enough zero-carbon electricity to power 500,000 homes and businesse
Slide 12: Focus on investor interest in the full value chain of GHG emissions
Environmental Focus on investor interest in the full value chain of GHG emissions Southern Company reports all relevant Scope 1, 2 & 3 emissions in the annual CDP survey response posted on our website ✓ Scope 1 emissions account for about 70% of our overall emissions; SO Emissions Scopes Scope 2 acc
Slide 13: Policy engagement and advocacy aligned with net zero by 2050 goal
Environmental Policy engagement and advocacy is aligned with our net zero by 2050 goal ▪ On our website we describe the public policy advocacy positions that we express in our engagements with policy Published 2021 Trade Association and makers Climate Engagement Report in November ‒ Alignment with t
Slide 14: Innovation
Innovation Southern Company seeks transformational technologies needed to facilitate the transition to carbon-free energy Southern Company has undertaken a systematic, comprehensive review of its R&D plan, including the identification of long-term objectives and aspirations and development of a refi
Slide 15: Net Zero Alignment with Executive Compensation
Net Zero Alignment with Executive Compensation 2022 Compensation program is consistent with prior years and includes key ESG metrics Notable Features of Compensation Program New for 2022 ▪ Long-term equity incentive award includes a GHG reduction ▪ Added new operational metric to the annual incentiv
Slide 16: Strong commitment to human capital management and addressing systemic racism
Social Strong commitment to human capital management and addressing systemic racism ▪ Enhancing pay equity and workforce diversity ▪ Commitment to racial equity transparency – In 2020, we strengthened our holistic approach to DE&I and building a healthy and diverse culture – In 2021, began disclosin
Slide 17: Racial equity framework and 2021 Transformation Report
Social Established racial equity framework in 2020 and published our 2021 Transformation Report outlining recent progress Our Framework and Commitments Key 2021 Highlights Our commitment is to increase and improve outreach, recruitment, TALENT Underrepresented groups, including people of color and w
Slide 18: Workforce demographics reflect our commitments
Social Workforce demographics reflect our commitments (2021 highlights) Aggregated workforce EEO-1 data is available here. 18
Slide 19: We are committed to a Just Transition for our stakeholders
Social We are committed to a Just Transition for our stakeholders ▪ As Southern Company transitions to a clean Our Just Transition Principles foster: energy future, we understand there will be potential opportunities and challenges for our Strong governance workforce, communities and customers Effec
Slide 20: Focus on regular, thoughtful board refreshment
Governance Focus on regular, thoughtful board refreshment Mar 2018 Oct 2021 Recent Independent Director Additions Ernest J. Moniz Janaki Akella Anthony F. Earley Colette Honorable Kristine L. Svinicki Professor, Special Advisor to MIT Digital Transformation Leader, President & CEO, PG&E Corp Partner
Slide 21: Independent, diverse and experienced Board
Governance Independent, diverse and experienced Board Southern’s Directors possess a range and depth of expertise and experience to effectively oversee the Company’s operations, risks and long-term strategy. Public Company Business Nuclear CEO Experience Integration 5/13 8/13 5/13 Audit Committee Go
Slide 22: Robust role of the Lead Independent Director
Governance Robust role of the Lead Independent Director and strong independent Directors ▪ David J. Grain was elected Lead Independent Director in May 2021 by the independent members of Southern Company’s Board of Directors – Chief Executive Officer and Founder of Grain Management, a private equity
Slide 23: Thoughtful Board oversight of key ESG risks and opportunities
Governance Thoughtful Board oversight of key ESG risks and opportunities Full Board regularly discusses key ESG topics as part of its regular agenda, including fleet transition and human capital management Committees take a deeper dive into ESG risks and opportunities and report out to full Board Co
Slide 24: Ratings and rankings demonstrate commitment and progress
Transparency Ratings and rankings demonstrate commitment and progress Scale Rating Letter grade CCC – AAA (best) A MSCI (2022) Score 0-10 (best) 6.5 Sustainalytics ESG Risk Rating (2022) 0 (best) – 100 32.6 ISS Governance Score (2022) 1(best) – 10 1 CDP Climate (2021)* Letter grade A- Letter grade A
Slide 25: Corporate Sustainability Goals Aligned with UN SDGs
Transparency Corporate Sustainability Goals Aligned with UN SDGs Southern Company has mapped our six corporate sustainability priorities to the United Nations’ Sustainable Development Goals framework, indicating our alignment with a sustainable future. 25
Slide 26: Third parties rate Southern Company highly for ESG leadership
Transparency Third parties continue to rate Southern Company highly for ESG leadership 2022 America’s Best Large 2022 Top 50 2021 Wall Street Employers, Forbes magazine – Companies for Journal’s Management No. 2 overall in U.S. Diversity, DiversityInc 250 List, Drucker Institute 2021 Best Employers
Slide 27: Disclosures responsive to investor interest
Transparency Disclosures responsive to investor interest Enhanced Sustainability Website published in March 2022 Key Data and Reports and Data available here ESG Data Table TCFD and SASB Content Indices GRI Index EEO-1 EEI ESG Template CDP Climate Reports Corporate Responsibility Transformation Repo
Slide 28: Cautionary Note Regarding Forward-Looking Statements
Cautionary Note Regarding Forward-Looking Statements Certain information contained in this presentation is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning Souther