Southern Company Publishes ‘Net Zero’ Report in Response to Investor Concerns
FOR IMMEDIATE RELEASE
MEDIA CONTACT: Stefanie Spear, sspear@asyousow.org, 216-387-1609
BERKELEY, CA—SEPT. 22, 2020—Southern Company released its Implementation and Action Towards Net Zero report on Monday, describing its plan to achieve net-zero emissions by 2050. Earlier this year, As You Sow withdrew a shareholder proposal filed with Southern on the risks of natural gas asset stranding after the company agreed to disclose further details on its gas-reliant strategy.
In May, Southern announced its net-zero by 2050 target for direct (Scope 1) emissions across its electric and gas businesses, improving upon its previously vague target of “low to no emissions.” However, investors remained concerned about Southern’s ability and strategy to achieve “Net Zero,” especially considering its plans to rely on natural gas as a significant part of its generation going into the midcentury. As You Sow and Energy Innovation’s 2020 report, Natural Gas: A Bridge to Climate Breakdown, details investor concern related to natural gas risk, and the opportunities to rise above it.
While Southern’s newly published report provides enhanced disclosure on the company’s strategy toward its current target, its conclusions are at odds with climate science as well as a growing body of research on grid decarbonization pathways. It projects that by 2050 approximately 40 percent of its generation will still come from natural gas and emphasizes the fossil fuel’s relative greenhouse gas savings compared to coal. In contrast, research shows that upstream methane emissions are unacceptably high, making natural gas far from a “low-carbon resource.”
While Southern claims gas is necessary for reliability, recent reports demonstrate that more rapid, cost-effective decarbonization is possible by 2035 and can be assisted by the creation of a competitive energy market in the Southeast. The actions and strategies of peers like Xcel, PSEG, and APS put Southern’s claimed dependence on natural gas in question.
Lila Holzman, Energy Program Manager of As You Sow, made the following statement:
“Southern’s new report provides some helpful information to investors on how the company views optionality for gas assets into the future. However, while Southern refers to concepts like ‘Renewable Natural Gas,’ hydrogen, and carbon capture, the company leaves out specifics that would help investors understand the impacts, costs, and likelihood that such technologies are anything beyond wishful thinking. Southern’s signal that it intends to continue relying on a climate-forcing fossil fuel runs counter to the same climate goals the company claims to support and exposes the company to alarming stranded asset risk.”
Daniel Stewart, Energy Program Research Associate of As You Sow, made the following statement:
“In claiming that natural gas can play a large role in a low-carbon future, Southern’s report is neglecting significant emissions associated with gas’ problematic supply chain. Southern does not account for methane emissions upstream, when gas is extracted and transported, or downstream, when gas is burned by customers for heating or cooking. Building electrification, which is emerging as a solution to promote rapid decarbonization, is barely mentioned in Southern’s new disclosures. We hope to see our company better prepare for a truly Paris-aligned energy transition. “
To learn more about As You Sow’s work on climate change, click here.
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