ESG initiatives, broadband projects among enticing opportunities for utilities

Following a multiyear stretch of unpredictability and financial uncertainty, utility companies are staring at the possibility of a more normal year in 2023.

With utilities having a variety of strategic opportunities at their disposal, Baker Tilly recently hosted two utility-focused webinars – one on the impacts, benefits and challenges of ESG initiatives and another on the opportunities with broadband projects that utilities should consider.

ESG considerations for utilities and municipalities

While Environmental, Social and Governance (ESG) initiatives are becoming increasingly common in both the public and private sector, at this point there still is not a universally accepted definition of what ESG means, let alone an agreed upon strategy for how utilities should identify, plan for and address their ESG needs.

Utility companies have a long list of ESG considerations as they pertain to:

• Environmental factors: Climate change, natural resources, pollution mitigation, waste-reduction and improvements that benefit the environment
• Social issues: Human capital and strength in diversity, human rights and community relations, affordable housing and utility rates, and other projects and initiatives to address social issues
• Governance concerns: Leadership team, financial management, cybersecurity and risk management

At a high level, utility companies need to be able to tell their ESG story to their employees and customers, to the public, to the media, and to rating agencies. Their story needs to include the steps that their company or municipality is taking, as well how they are going to monitor and measure the results, what the impact will be, and ultimately what it will mean for their utility (or their city or town). This includes highlighting impacts such as:

• The “material risks” that impact your organization on a daily basis
• The ESG-related initiatives that are proactively used to address those risks
• The ways your organization responds to and prepares for rating agency and investor inquiries.
• Your organization’s ESG-related bond designation potential