Linking the environment to our business strategy.

Every source of energy available to us today has its own environmental impact. The responsibility of energy suppliers as well as policy makers is to recognize those impacts, work to abate them and price the full cost into the product.

Transitioning the energy supply system to one that minimizes environmental impacts will require profound changes, and Exelon’s efforts to supply clean energy and promote market-driven solutions supports America’s efforts to make this transformation as efficiently and effectively as possible.

Exelon 2020, which serves as our business strategy guide for investment decisions and as a framework for our public policy advocacy on climate change, is evolving to identify reliable, lower cost electricity supply options that can also achieve other key environmental objectives.  From 2010 through 2015, we are investing nearly $5 billion in cost-effective, clean energy projects to support the objectives of Exelon 2020.  We continuously assess our strategic options as we better understand the complex environmental, social and economic linkages that challenge our society, and adapt and refine our business strategy to build shareholder value.   

Low-carbon performance

Exelon placed an early focus on carbon emissions because we see our opportunity to make a real impact on this pressing issue.  As summarized in the chart above, Exelon 2020 performance is expressed as a measure of total annual GHG emissions.  Click on image to enlarge.  We recognize that we hold an influential role as one of the largest electric wholesale and retail power generation companies in the US, as well as through our utility companies with over 5.4 million retail electricity customers.  

Therefore, in 2008, Exelon launched Exelon 2020, an ambitious strategy to reduce, offset or displace more than 15 million metric tons of greenhouse gas (GHG) emissions per year by 2020. At the end of 2011, we achieved over 82% of our goal having abated 12.8 million tonnes of GHG emissions; a reduction equivalent to removing over 2.3 million cars off the road every year.

We have achieved these reductions through:

• Greening our operations
• Helping our customers and the communities we serve reduce their GHG emissions
• Offering more low-carbon electricity in the marketplace

Measuring Progress and Improvement

As GHG emissions accounting evolves, Exelon makes every effort to respond by updating and expanding its GHG inventory accordingly. click on image to enlarge  With EPAs phase-out of the Climate Leaders program in 2011, Exelon has realigned its Inventory Management Plan to conform to the accounting guidance outlined by The Climate Registry (TCR). TCR’s protocols embody GHG accounting best practices as drawn from The World Resources Institute and the World Business Council for Sustainable Development (WRI/WBCSD) GHG Protocol and the International Organization for Standardization (ISO) 14064 standards, and builds upon the framework established by the Climate Leaders program.

With the Exelon 2020 program, we have integrated performance monitoring of our GHG inventory and Exelon 2020 efforts into Exelon’s quarterly management reporting process. Each of the operating companies currently participating in Exelon 2020 documents their progress and results as part of the overall quarterly operational and financial review with the company’s senior leadership.  Exelon completed verification of our 2011 inventory under the TCR protocol (our assets as they existed 2011) and we are working to integrate Constellation's assets and GHG inventory (which was also underwent three party assurance in 2011) into our programs for the 2012 calendar year.

Climate Leadership Recognition

• 
  Climate Leaders Program.
  In 2009, the U.S. EPA’s Climate Leaders program accepted Exelon’s emissions reduction of more than 38% from 2001 levels, far surpassing the company’s voluntary goal of 8% set in 2005.

• 
  
  Carbon Disclosure Project
  Exelon and Constellation participate in the Carbon Disclosure Project (CDP), scoring among the top 10 top utilities in the S&P 500 in 2011.  The CDP collects data from more than 2,500 major corporations on their carbon emissions and climate change strategies.  Exelon has participated in the CDP since 2005 and qualified for the Carbon Disclosure Leadership Index (CDLI) in four of the six years we have participated.  Our responses document the maturity of our climate change initiatives and achievement of related objectives.  Scores for the 2012 submittals will be released by CDP in the Fall of 2012. 
  
  In 2011, Exelon and Constellation also completed the CDP Water and Supply Chain Surveys, which are newer initiatives within the CDP to further expand the importance of environmental performance disclosure.  These surveys are not yet scored by the CDP at this time. 

Climate Policy Engagement

Because appropriate public policies are crucial to addressing climate change in a meaningful way, Exelon has been an early and vocal advocate for mandatory, economy-wide climate regulation.

• United States Climate Action Partnership (USCAP). As a member of USCAP, we have joined a group of businesses and leading environmental organizations to collectively call on the federal government to quickly enact strong national legislation to require significant reductions of greenhouse gas emissions.  
• World Resource Institute (WRI) GHG New Source Performance Standard (NSPS) Dialogue.  Exelon participated in the WRI GHG NSPS Dialogue, along with other clean energy companies, national environmental organizations, state government agencies and other advisory organizations and think tanks, to develop a set of comments and recommendations related to issues and regulatory approaches that EPA should consider as it develops requirements for power plants.  Exelon also advocates for sound policies at the local, state, regional and federal levels that help promote competition, protect our customers, and consistently provide incentives for effective and economically sensible climate change solutions.