An Interview with Bruno Sarda: Head of Sustainability at NRG
Business Today (Hannah Pouler): As Head of Sustainability at NRG, what does your job entail?
Bruno Sarda: As head of sustainability, I have to look at sustainability across the whole enterprise. Sustainability is one of those functions that, when done well, spans all aspects of the business. The way I architected it at NRG is across 5 pillars: sustainable business, sustainable customers, sustainable operations, sustainable suppliers, and sustainable workplace. So as that hints at, we look into our supply chain, making sure that all the money we spend as a company takes sustainability into account. Operations, that’s our physical footprint on the world; carbon emissions, water consumption, and so on. The Customers pillar focuses on how do we actually help users of our product be more efficient and increasingly decarbonize their own operations. Business is this layer dealing with governance, disclosure, reporting financial management. Last but not least, Workplace is about how we make NRG a place that embodies sustainability. The NRG headquarters in New Jersey is a league platinum building, our big office in Houston is league gold, but it’s also about the food we put in the cafeteria, having fitness centers, and so on. My job is about managing all those things, caring about all those things, and inspiring others to carry that torch. Sustainability is a small team, so you can’t be the one doing it; you have to be the one leading it.
BT: How has NRG led the industry in sustainability, and what standard do you hope to set for your peer companies?
BS: I think we lead in several key areas. First, we were the first in our industry to set sign space targets to reduce our greenhouse gas emissions according to published science. We set targets to reduce carbon emissions by 50% by 2030 and 90% by 2050, which is roughly the ambition of the Paris Agreements, although we set our goals before those agreements took place. We also set our industry’s most aggressive water stewardship goals, to decrease our water consumption by 40% by 2030. And we’re not just leading on commitments, we’re leading on performance; we actually met our water conservation goal already, 13 years early. We’re 70% of the way towards our 2030 carbon goal, and expect to meet that goal as well. So we’re leading both on the ambition and both execution. Another example where we’re leading is also on transparency and disclosure. It’s important for your investors, employees, regulators, and customers to have visibility into what you’re doing. We’re the first in our industry to publish according to the SASB standard, which stands for Sustainability Accounting Standards Boards, chaired by Mary Schapiro, former head of the SEC. We’re also the first company in our sector in the US to be a CEO-level signatory to the Women’s Empowerment Principles, published by the UN. We’re trying to lead not just in the environment, but to take social sustainability into account. We’re inviting others to follow our lead - it’s cool when you’re the first to do these things, but not cool if you remain the only one in the race.
BT: In 2017, President Trump announced that the U.S. will withdraw from the Paris Climate Agreement. Do you think that that will influence sustainability in the future by taking away government incentives?
BS: President Trump indicated he will withdraw the U.S.: legally he can’t do that until 2020. Also, even before he announced the decision, there was a massive mobilization from business, cities, universities, and all parts of the U.S. society saying “we’re still in.” And in fact, there’s a movement called We Are Still In, and NRG is a signatory. There’s now about 2,700 businesses, cities, colleges, states, and counties who are a part of this movement, who are saying the science is real, and the opportunity is real. There’s been a call to arms and a realization that climate change is not a problem that the federal government will solve for us. Just last week, I was in California for the Global Climate Action Summit, and you saw hundreds of new commitments on all kinds of things: renewable energy, electrifying vehicle fleets, net-zero emission buildings, etcetera. So there are a lot of proof points that this isn’t just an aspiration: a lot of organizations are putting concrete, tangible actions in place to make “we’re still in” real.
BT: You’ve talked about a nexus of reducing consumers’ energy consumption, while saving them money. Do you believe that monetary incentives are necessary for the everyday American consumer to consider reducing their carbon footprint?
BS: I think it helps. For sure. There are a couple of ways to think about that. I believe strongly that a sustainable future, in general, is a better future. It’s one that we will like more. And just like everything else, as consumers, if there’s something we like more, we’re willing to pay more for it. We pay ridiculous amounts of money for things like a cup of coffee these days. Having said that, the fact is that there’s a great confluence right now that a sustainable lifestyle can in fact save you money. Renewable energy now, certainly at a large scale, is the cheapest form of new energy. For smaller households, we offer 100% renewable plans off the grid, so you don’t have to invest in renewable energy technology to buy it. It does come at a bit of a premium right now, but I equate it to food. If you want to eat better, and shop at Whole Foods instead of a regular grocery, there is a premium as well. There’s an idea that getting something more wholesome comes at a cost. I think that needs to change: not just to drive adoption, but for climate justice. Sustainability can’t be just for people who can afford it, because in fact the people who can least afford it are the ones who will suffer the most from the effects of climate change. So it’s an imperative for us to make sure that sustainability is available for all budgets.
BT: Do you think that equalization will come about from improved technology, or more competition in the industry?
BS: I think it will be a combination of those things. Scale helps. Just like the first people who bought flat screen TVs paid a lot of money for them, as companies began to build more TVs and more competition entered the marketplace, prices were forced to decrease. We certainly saw that at a large scale for solar panels. As manufacturing increased, economies of scale kicked in, and policy incentives were created. We need to have earlier adopters who are willing to pay more, in order to make this technology more affordable to the general public. Even today, you can only choose where you buy your power from in 17 states - there are still lots of opportunities for shaping policy incentives so we encourage competition. We need to stop subsidizing high emitting energy sources, to continue to make it easier for consumers to adopt cleaner technologies.
BT: How do you envision the power industry 10 years from now, and what steps has NRG been taking to prepare for, or even expedite, this shift?
BS: In 2015, about 21% of all energy use in this country was from electricity, and the rest mostly from oil and gas. It’s estimated that by 2050, it will be almost 50% electric. So part of what we expect to see is a rapid electrification, especially in the realm of transportation. A lot of heating and cooling systems in buildings will also likely be electrified. The rapid growth of renewable energy will also continue, as well as a dramatic increase in battery storage capacity. This will change the game for renewables like solar and wind, which are not always “on.” Just as we all have a water heater in our house right now, soon we could all have a battery storage unit in our house, where we draw wind and solar during the day, so that overnight our entire power needs are met from that battery. This would also help with resilience; in times of natural disaster, having a power source in your house to take over when the grid goes down will do a lot.
BT: You’re a professor and sustainability scholar at Arizona State. In your opinion, what is the role of educators in the future of sustainability?
BS: For me, since 2011, I’ve had both a corporate role and an academic role. Certainly, the traditional role of Universities in producing research and sharing knowledge remain important. But to some extent, the role of who is transmitting knowledge and producing research is no longer just the role of educators, thanks to the smartphones in our pockets. I think what’s been interesting for me, then, is really focusing on the how. It’s not just here’s what you need to know, because data and science are just the starting point. If all it took was data and facts, we would have solved climate change a long time ago. It’s more about how do we prepare the future generations for how they need to work. I think we really have to help the workforce of the future to understand how to be agile and nimble enough, because this acceleration of change in society and the workforce means that straight knowledge is obsolete by the time they get out of college. We have to focus on skills, competencies, mindsets, and value drives, so that students are not only comfortable with change, but expect change and lead change.
BT: What advice do you have for college students who want to be a part of the change you speak of?
BS: Don’t fear change. It’s not about coping with change, it’s about embracing it, and wanting it. Change is good. We can’t keep doing it the same way we have, whether it’s pollution, gender disparity in the workplace… change is what we want. So get comfortable with the idea that change is good, but it’s also hard, and often met with resistance. When you think about what you want to do with your life, ask yourself what really drives you. Are there issues, topics or values that are most salient to you? How do you want to operate in society - do you want to work in business, public service, research? It’s about finding your center. From there, sustainability might not be your full time job. But it’s something that will make you really good at whatever you’re going to do. Think of it not as a career track, but as a career adder, accelerator, differentiator. Bring that set of values, that courage to make change happen, to whatever you do.