THE BLOG
01/20/2015 12:00 am ET Updated Jan 20, 2015
PRESENTED BY NRG

You'll Never Meet the Goals That You Don't Set

There is a cliché in business: "What you don't measure, you won't accomplish." In sports, hockey great Wayne Gretzky expressed this as, "You miss 100% of the shots you don't take." In sports, business and in life, goals that you never set are the ones you are certain never to meet.

In November, NRG announced long-term sustainability goals aimed at dramatically reducing the company's carbon dioxide (CO2) emissions. The announcement included two major milestones: first, to reduce carbon emissions 50 percent by 2030; and, second, to reduce carbon emissions 90 percent by 2050 - all while growing our business to meet the energy needs of the future. As one of the largest companies in the industry responsible for more greenhouse gas emissions than any other, such reductions are both meaningful and difficult to achieve.

So why do we do it? It's simple. We are setting out to prove that there is untapped value in turning energy from a basic commodity into a suite of services designed to enable a carbon-free lifestyle. There are a number of clean, low-carbon on- and off-grid solutions available today. And, as it happens, most forms of renewable energy -- particularly solar -- scale down economically and, as a result, they will allow us to offer energy consumers much more convenience, flexibility and mobility in terms of personal power than is currently available.

This means radical change in an industry that has not appreciably changed the way it does business since the days of Thomas Edison and George Westinghouse. For NRG, embracing new clean energy technologies is the greatest opportunity we have to grow; to become the energy company of choice for the next generation; and to fulfill the expectation of our employees that they are working for a purpose-driven company and that purpose - being a leader in the fight against climate change - is as important as it can be. And further, we are reinforcing the message in corporate America that caring for one's welfare and wellbeing are not negotiable practices in this day and age.

Our purpose is the ultimate communal purpose: every human and every business contributes to the problem of climate change, through direct and indirect carbon emissions. As such, we all have to be part of the solution. Companies, like ours, are equipped with the enormous resources of multinational corporations and ready-access to the right technologies. We are driven by the strength of conviction as to the urgent imperative of global warming, and are well positioned to lead. But a business-led social movement won't ever happen without the enthusiastic participation of the American public.

American consumers, an essential part of the solution equation, are -- regrettably -- largely indifferent at this point to which company they get their electricity from. Therefore, they are unlikely to follow the lead of a company they feel no emotional connection with. American consumers feel a much closer relationship with other companies, like entertainment, consumer products, consumer electronics, auto, beverage, big box retailers, etc. Many of those companies are also willing to lead on this issue.

At this stage, this corporate "coalition of the willing" is just coalescing. The enlightened CEOs who lead these companies are focused inward. They want to clean up their own act, making their own companies as absolutely sustainable as possible. They are leading by example, which makes sense except that it is slow going at a time when there is no time to spare.

Because even where the company's CEO is an ardent sponsor, the full embrace of clean energy and other sustainability solutions has to first be agreed to and implemented lower in the organization. And when you get to the working level of any company, you realize that almost all actions in the business world require financial justification via a "net present value" (NPV) calculation. To put it bluntly, if a shift to new clean energy solutions cannot be economically justified, it is not likely to happen no matter what the CEO wants.

Fortunately, the price of distributed solar and wind has fallen so far so fast that investment in distributed renewable energy solutions usually can be justified in financial terms, but it takes too damn long and too much effort to prove it every time, in every instance.

There is one issue in the corporate world, however, that universally sits beyond the reach of financial justification - safety. In my 14 years as a corporate executive, I have been through countless meetings discussing what we could do to keep our employees and customers safer and never have I heard anyone try to measure personal safety in net present value terms.

It was not always so. Early in the 20th century, American industrial concerns considered on site injuries and even fatalities as an unfortunate but inevitable cost of doing business. But at some point, public revulsion (and subsequent social action) rose to the level that a cavalier attitude on the part of corporations towards employee safety became simply unacceptable.

That is what we need now. We need "sustainability" to be elevated everywhere in corporate America, to sit alongside safety, in that fine place where economic viability gives way to moral necessity.

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