How Can Project Leaders Elevate ESG?
Angela Ortiz explains how her role helps a U.S. utility company sustain its ESG commitment by focusing on risk, measuring impact and showing the long-term value.
When Angela Ortiz joined U.S. utility company Public Service Enterprise Group (PSEG) in 2008, organizations around the world were just beginning to prioritize environmental, social and governance (ESG) issues. But as the need to address climate change and myriad social crises became more urgent, ESG awareness evolved—and so did Ortiz’s responsibilities for PSEG.
Advancing from environmental policy manager to director of ESG and sustainability, Ortiz has become a catalyst for helping the New Jersey firm turn ambition into reality. By helping to elevate the impact of ESG, Ortiz plays a role in ensuring that initiatives connect to the core of the company’s objectives, which include achieving net-zero carbon dioxide emissions by 2030 for Scopes 1 and 2 of the Greenhouse Gas Protocol.
Whether the goal is energy efficiency, biodiversity or diversity, equity and inclusion, Ortiz amplifies change through rigorous, strategy-driven and socially attuned analysis that helps the company draw and navigate an ESG roadmap for its entire portfolio.
What is your primary responsibility?
I compile, coordinate and package the nonfinancial information that we voluntarily report to all of our stakeholders. Disclosure allows us to continuously benchmark and compare progress, goals and efforts, and informs analysts and third-party data providers of relevant information on both environmental and social matters. It also helps us capture peer evolution, identify trends, anticipate challenges, or align with good practices and requirements. We make sure that information consistently gets to the right people so that, for instance, subject matter experts and process owners receive support while designing and implementing strategies aimed at continuous improvement. My role is an orchestrating duty and a supporting function that connects the dots between our stewardship and purpose and our main goal of providing safe and reliable services to our customers.
How do your efforts help elevate ESG?
From a high-level, strategic point of view, I work to help the organization identify its competitive advantages and vulnerabilities with respect to environmental and social matters. My team and I help the company understand the unique capabilities that can have greater impact for the business and society as a whole. In the same way, we can also highlight the vulnerabilities and expectations that critical stakeholders will require a company to address, in light of our specific location, regulatory environment and such. My job is to constantly analyze those factors. As a utility company, PSEG has challenges that no other industry faces, such as regulatory constraints that only a handful of industries understand. But at the same time, we also know that we play a unique role—from affordability discussions to making sure the future of the green economy does not disproportionally affect some populations and is accessible to all.
What’s the status of PSEG’s ESG commitment journey?
PSEG has evolved into a clean energy infrastructure-focused company, and as such, our business strategy has evolved to reflect not only how the effects of climate change might impact PSEG and its investors, but also how our projects and business operations can positively impact the communities where we operate and the world where we live. That means embedding sustainability priorities and aligning ESG topics with our normal business and projects. In the last decade especially, we have strengthened our governance and embraced new opportunities, allowing us to adapt to the increasing social and environmental needs of our business. I consider myself a change agent, but I also have the fortune of heading a coordinating effort, where strategic alignment provides all the tools I could possibly need to make it happen.
How does risk management help identify ESG opportunities—or mitigate negative environmental or social impacts?
Incorporating ESG as part of the risk management reviews is good business practice, period. It’s not just a “nice to have”—it is expected by shareholders and other stakeholders alike. Using the ESG lenses not only allows companies to see opportunities within normal operations and projects, but also helps anticipate potential risks. When we talk about reputational risks, for example, ESG’s considerations are vital for companies in order to remain relevant far into the future—particularly those whose growth depends on public acceptance. The imperative for companies to earn their social license is rising. Identifying social and environmental externalities is a core strategic challenge and, in that way, not only futureproofs the organization but also delivers meaningful impact over the long term to stakeholders.
What steps do you take to ensure ESG impact is accurately measured so the true strategic value resonates with all stakeholders?
A key part of making ESG real is to measure what matters. To the extent that’s possible, we apply effective performance management in ESG the same way we do in other contexts—and we approach shorter-term metrics with a view toward achieving longer-term, strategic goals. Climate change is again the perfect example. We use clear milestones, pay careful attention to meaningful KPIs, and have even elevated initiatives that tie directly to executive compensation to make sure they get the proper visibility and accountability. We recognize that we cannot be distinctive by pursuing every initiative that qualifies as ESG. Sustainability is an essential strategic concern, which means it affects how and where a company competes. That is why we have a materiality assessment process that I support, where we identify our ESG priorities and report using that tool. It helps us make sure it is aligned with our new business reality, geopolitical affairs and strategic approach.
How do you make sure ESG impact is understood?
We think carefully about communications, and I spend a lot of time working with our corporate communications team on this—not just in terms of what resonates with investors, but with a wide variety of stakeholders that we care about. And it’s not just about announcing to others all the good things we do—we want to share information in order to learn, become smarter and improve as an organization. We tailor messages for each type of stakeholder and the information that they prioritize. PSEG has a mature and best-in-class disclosure approach that’s focused on showing how the company’s ESG initiatives complement and strengthen the strategic plan. The story around ESG attributes helps us understand the whole picture beyond financial statements and reports and brings color to the reality of a particular company.
Why is ESG so critical for organizations and their project teams to embrace?
Focusing on ESG issues creates long-term value for corporations in multiple ways. It has been proven to be a risk management tool, and it’s increasingly recognized as a signal of good management because it shows how in tune boards are with business and stakeholder reality, how C-suite members understand external issues and plan to react to them accordingly. We also know that global sustainable assets today are worth more than US$2.5 trillion, proving that there are economic and financial opportunities. Ultimately, ignoring ESG and its potential is a missed opportunity for corporations.