The Foundation of a Renewable Energy Future
UGI Corporation (“UGI” or the “Company”) pledges to reduce corporate-wide Scope I greenhouse gas (“GHG”) emissions by 55% over the next five years1 supported by a capital allocation strategy that focuses heavily on lowering its overall carbon footprint. Both of these factors will propel UGI forward on its long-term mission to align with the Paris Climate Accord of net zero carbon emissions by 2050.
This is UGI’s third Environmental, Social and Governance (“ESG”) report. The report covers ESG information from our four business segments. It provides information at the business level and, where appropriate, on a fully consolidated basis.
The theme for this report is “The Foundation of a Renewable Energy Future.” UGI is well positioned to become a leader in the future of renewable energy and continues to focus on reducing our emissions, reducing our customers’ emissions, and investing in alternative energy solutions.
UGI remains committed to delivering affordable, efficient, and socially responsible energy products and services to our customers in a safe and reliable manner. To meet these commitments, UGI is focused on acting in a sustainable and socially responsible way to minimize our impact on the environment and be a good steward to the planet.
In this report, UGI provides performance data related to our ESG commitments. Our goal is to use ESG data to supplement our financial reporting materials in order to meet our constituents’ broader need for information. To help with this process, UGI is working toward disclosure of material ESG factors from the Carbon Disclosure Project (“CDP”).
UGI’s businesses share common values and culture, but we recognize the need for individualized business unit focus on our products, services, markets and stakeholders. We have also grown through acquisition – domestically and particularly internationally. We are building data collection protocols and reporting platforms across our business portfolio to supplement our disclosures over time.
Information in this report covers UGI’s 2020 Fiscal Year (October 1, 2019 to September 30, 2020) unless otherwise indicated. We will provide periodic updates on our ESG performance through our website.
Letter from the CEO
The past fifteen months have been a challenge for businesses to navigate, but those challenges pale in comparison to those faced by some of our stakeholders and the communities we serve. The COVID-19 pandemic laid bare critical issues, such as food insecurity and homelessness, while a long overdue awareness of racial injustice prompted necessary introspection and action across the nation and world. We experienced a number of tragic and avoidable events that touched each one of us. I am proud to report that our leadership team, Board of Directors, and employees responded quickly and decisively to these challenges to make our organization and communities stronger. UGI provided financial and volunteer support to food banks, emergency services organizations, and critical educational teams. We also achieved record levels of support for our long-term partner, the United Way, raising over $1.2 million during our annual campaign. UGI committed to fostering an environment that promotes diversity and inclusion through our belonging, inclusion, diversity and equity (“BIDE”) initiative and our robust supplier diversity strategy. Progress in these critical areas ensures that our entire team knows that they truly “belong” at UGI and that their diversity of thought, perspective, and experience is vitally important to UGI becoming an even more innovative and successful company.
Our theme for this year’s report is “The Foundation of a Renewable Energy Future,” and we are proud to inform you that we have made great strides to position UGI as a leader in this space. Specifically, we created an ambitious target to lower our direct carbon emissions by 55% over the next five years and provide insight into our evolving capital expenditure program that features increasing investments in renewable solutions. Our strategic asset network and proven competencies allow us to rapidly address growing customer demand while remaining conscious of the important “trilemma” facing the world today – providing energy solutions that are sustainable, reliable, and affordable.
We are focusing our efforts on a number of key areas, including renewable natural gas (“RNG”), bio-LPG, renewable dimethyl ether, and hydrogen, among others. Our natural gas businesses are actively exploring RNG opportunities involving both distribution and RNG feedstock infrastructure. We believe that UGI is particularly well positioned to develop investment opportunities in this rapidly emerging market. Our competencies in project development, project execution, gas transportation and storage, and energy marketing are directly applicable to RNG feedstock management. From an environmental standpoint, RNG is an outstanding solution, since it is a zero carbon or negative carbon solution, depending on the feedstock. Our LPG businesses are making similar strides in developing bio-LPG sources to augment our existing bio-LPG source in Sweden. Similar to RNG, the range of growth opportunities in bio-LPG includes potential investments in feedstock infrastructure.
The addition of RNG and bio-LPG to our supply portfolio is particularly attractive for our customers and communities as we aim to provide economical solutions to reduce our collective carbon footprint. We can utilize our existing natural gas and LPG distribution infrastructure to deliver RNG and bio-LPG to the 3 million customers directly served by UGI.
These renewable solutions can be brought to our customers with no additional local infrastructure, no incremental investments by our customers, and no community disruption related to infrastructure buildout.
We are excited about the significant growth potential of these renewable solutions as we address the fundamental needs of our communities for sustainable, reliable, and affordable energy solutions.
We see RNG and bio-LPG as the areas of most significant potential in the short term, but we are also exploring opportunities around renewable hydrogen, carbon capture, battery storage and other promising technologies. We have found many of the companies developing new solutions are eager to work with us. They recognize that our physical connection to over 3 million customers, and our large team of field service personnel serving those customers, can provide crucial support when commercializing new solutions.
Lastly, but always of utmost importance for UGI, is safety. We are proud of how quickly our teams adapted to the challenges of safely delivering an essential service to customers during the COVID-19 pandemic. Our team’s response has been outstanding, as we successfully adapted the way we do business to ensure the safety of our employees and customers. UGI established new protocols for our frontline workers, who were equipped with personal protective equipment (“PPE”), while we practiced strict adherence to all guidelines from the Centers for Disease Control (“CDC”), the Department of Homeland Security (“DHS”), and the World Health Organization (“WHO”) in all field and office settings. We continue to make progress towards our goal to be a leader in safe operations and have made significant investments to support this ongoing initiative.
We continue to evaluate and enhance our ESG reporting framework to ensure that we provide relevant — and useful — data to our stakeholders, and we welcome dialogue around these topics.
On behalf of everyone at UGI Corporation, thank you for your interest in our company.
President and CEO