Armed with a giant spreadsheet, Laurel Peacock attempts to create a common language out of the hundreds of environmental, social and governance (ESG) data points that ratings agencies are crunching to assess NRG Energy.
Though she is plagued by questionnaire fatigue and occasionally thwarted by research firms with sloppy and outdated methodologies, there is a sense of optimism and excitement when exploring the practice of sustainability reporting with Peacock.
“It’s not going away. It’s going more mainstream,” says Peacock, senior sustainability manager for sustainability reporting for the New Jersey-based company for the past five years. “I think it’s an amazing time for us sustainability professionals.”
A member of the Corporate Responsibility Association and co-chair of the group’s Ratings and Rankings Thought Leadership Council, Peacock speaks frequently at industry conferences, including Globe Series in Vancouver, where she appeared alongside a Moody’s energy analyst, an S&P Global research executive and a partner of a buy-side firm managing $40 billion Canadian in assets.
Responsible for NRG’s voluntary reporting, Peacock dedicates nearly 20 percent of her time to information and data management, with questionnaires often containing 50 to 300 ESG indicators. She works alongside executives from Finance, Investor Relations and Legal, and has input on which sustainability information is included in the NYSE-listed company’s 10-Ks.
“You have to pay very close attention,” said Peacock, adding that some ESG data aggregators err by presenting out of date or improperly classified information even after the company submits corrections.
Questionnaires have nuances, with different measurement units and time horizons, cautioned Peacock, adding, “We want to make sure we’re comparing apples to apples.”
Not all ratings schemes are created equal. Among those prioritized by NRG is CDP, which she calls a “table stakes player” due to its focus on climate and water, and because the data is highly visible in Bloomberg terminals.
While acting as the primary interface between external research firms and the energy company, Peacock said much of her focus is among her peers and the leadership, talking about how they manage risk and identifying how to report on that externally.
“You have to learn the language of finance and the language of business,” she advised. “From a practical standpoint, you have to ask the right questions that can bring down a lot of barriers.”
Through dialog with the C-suite, Peacock said it became apparent there was concern over the definition of materiality in sustainability, versus long-standing financial definitions of materiality watched closely by investors. NRG opted to highlight its most important indicators in sustainability reporting as “key issues” rather than using “material” as an adjective.
As the only corporation represented on a Globe Series panel dominated by raters and investors, Peacock was confident, saying, “We really do believe that transparency builds trust.”