Against the backdrop of global climate change, growing development imbalances, and slowing economic growth cycles, more and more investment decision-makers and stakeholders realize that they need to obtain more in-depth information on environmental, social and governance (ESG) in addition to corporate financial information, so as to make accurate judgments on the multiple risks, opportunities and response capabilities faced by corporate growth and development.
The demand for ESG information has exploded, and ESG rating agencies have emerged. Due to the imperfection of disclosed information and the differences in evaluation methods, people have also criticized the rationality of ESG evaluation results.
Although there are still many issues to be solved, the efforts of relevant parties in the ESG ecosystem to continuously optimize the quality of information, improve evaluation methods, and improve ESG performance are worthy of recognition.
On April 18, 2024, the inaugural meeting of the ESG Professional Committee of the Power Industry of the China Water Conservancy and Electric Power Quality Management Association was held in Guangzhou, at which Zou Guilin, Secretary-General of the Special Committee, shared the innovative practice of ESG evaluation in the field of infrastructure of China Southern Power Grid - "Innovative Research and Practice of ESG Evaluation Index System of Power Grid Engineering Based on New Development Concept", and explored the method and application of ESG quantitative evaluation of a single project, in order to explore the method and application of ESG quantitative evaluation of a single project, in order to achieve common prosperity in the context of "double carbon", the construction of a beautiful China, and common prosperity. Promote the power industry to achieve high-quality and sustainable development.
In this regard, we interviewed Zou Guilin, the lead leader of the research project and the deputy chief engineer of the Energy Development Research Institute of China Southern Power Grid, to understand the beginning and end of the ESG evaluation of China Southern Power Grid's innovation and implementation of power grid projects.
"High quality" does not equal "high quality" in power grid engineering
Southern Weekly: What is the background of China Southern Power Grid's research on this topic?
Zou Guilin: With the transformation of economic development mode and the deepening of power system reform, the imperfection of the traditional evaluation mode of power grid engineering construction has gradually been exposed. First, the traditional project evaluation criteria focus more on the process and quality of the project entity, and the implementation of new development concepts such as green and sharing has not been fully revealed; Second, the internal multi-dimensional engineering evaluation mechanism is parallel (such as the evaluation standard for green grid construction, the assessment and evaluation standard of the owner's project department, the comprehensive inspection and scoring of infrastructure construction site, etc.), and some indicators overlap, which is relatively scattered in management, increasing the burden of grassroots project management, and lacking an overall portrait of high-quality level; Third, we have gradually realized that the "high quality" of infrastructure projects (such as winning engineering awards) does not necessarily mean "high quality" (reflecting sharing, win-win, and implementing new development concepts). For example, some projects are industry-leading in terms of engineering construction, but there are wage arrears in the construction of the project, and residents in the surrounding communities do not buy it, or the implementation of the dual carbon strategy is not obvious, which cannot be called "high quality". On the other hand, "not high quality" does not mean "not high quality". For example, according to the conventional emergency repair project cycle is very long, but the user is waiting for electricity, the solution is to meet the basic quality requirements of the temporary project first, to solve the people's urgent need for electricity, it is in line with the concept of shared development.
The ESG concept is connected with the core of high-quality development, and can be used as a starting point to promote the implementation of new development concepts in the field of engineering construction. Therefore, on the basis of undertaking and accommodating the current infrastructure inspection and evaluation, the company has added indicators that are highly related to the externalities of the project, and innovatively built a set of ESG index system to implement the new development concept and answer the question of "for whom" of power grid engineering.
Southern Weekly: How to organically combine infrastructure evaluation requirements with ESG evaluation system?
Zou Guilin: Guided by the new development concept of innovation, coordination, green, openness and sharing, first of all, the top-level design of 10 first-level indicators corresponds to the group standard "Corporate ESG Disclosure Guide", in which product responsibility, supply chain responsibility and employee responsibility are respectively transformed into issues that are in line with the quality and safety of power grid projects, stakeholder participation, industrial workers' rights and interests, and protection.
Then, the underlying design fully accommodates the current infrastructure inspection and evaluation through merger, splitting, and inheritance, supplementing the lack of externality indicators for measuring high-quality development, and forming 108 quantifiable third-level indicators. Finally, the first-level indicators and the third-level indicators collided in both directions to refine the key issues of sustainable development of engineering construction and form 34 second-level indicators.
In terms of weight, we will consider the different characteristics of the distribution network, main network, power transmission and other projects, such as the close distance between the distribution network and the user, and the problem of the surrounding relationship of the project is more prominent, and the weight of the three-level indicators will be increased accordingly. Taking the carbon footprint of the much-talked-about example as an example, since there is no unified industry standard for carbon emission accounting for power grid projects, we do not set mandatory disclosure requirements, but take project carbon disclosure as a plus.
The mapping relationship between new development concepts, ESG and engineering construction management
Southern Weekly: How is the data obtained for the project's ESG evaluation?
Zou Guilin: Most of the data on infrastructure project management has been collected on the smart engineering system, and the missing data is mainly due to new indicators such as stakeholder participation, industrial workers' rights and protection, etc. To this end, the company introduced a third party to carry out external effect evaluation, combined with questionnaire surveys, systematic data analysis, public opinion monitoring and other methods to collect the needs of stakeholders more extensively, gain an in-depth understanding of the level of project sharing with the community, and effectively connect relevant information with project management.
ESG evaluation of power grid engineering realizes "one yuan and multiple management"
Southern Weekly: How is the evaluation system currently being used in the system?
Zou Guilin: In 2022, we took the 220 kV Yanle power transmission and transformation project of Lijiang Power Supply Bureau of Yunnan Power Grid as a sample, and took the lead in carrying out ESG pilot evaluation practices for engineering projects in the country, forming a "1+3" comprehensive evaluation report (overall evaluation + three special evaluations of quality and safety, green and low-carbon construction, and industrial team construction).
In 2023, the ESG evaluation of power grid projects will be demonstrated and promoted in the system, and more than 10 different types of projects will be selected from the main and distribution networks of power grid companies in five southern provinces and regions, and the differences between different projects in the second and third level indicators will be explored, the weights will be optimized, and the comprehensiveness and scientificity of the evaluation will be improved.
The power grid companies of the five provinces and autonomous regions actively apply for engineering projects to participate in ESG evaluation, because the evaluation can give a comprehensive portrait of the comprehensive performance of the project, and there is an objective report and demonstration, which is a recognition of the ability of the project participating units, and it is also helpful for the project application industry rewards.
Yunnan Power Grid 220 kV Yanle Power Transmission and Transformation Project ESG Rating Results
Southern Weekly: Will ESG evaluation of power grid projects increase the cost of the project?
Zou Guilin: We have made a simple calculation, the ESG evaluation system of power grid engineering is to merge the current multi-dimensional engineering evaluation mechanism in the field of infrastructure to form a "one yuan management and multiple evaluations" evaluation system, the original multiple sets of standards, multiple evaluations, can now be completed at one time, and the overall cost savings are far greater than the cost increased due to the collection of external data.
Southern Weekly: What work will be done to promote the ESG evaluation of power grid projects in the future?
Zou Guilin: Next, we will continue to improve the requirements of management responsibilities and evaluation processes at all levels, form institutional documents, and take the assessment indicators and evaluation mechanisms as the guide to realize the upgrading and optimization of the trinity of "concept-system-ability" of infrastructure management, and further improve the environmental, social and governance performance of engineering construction.
In the future, we hope to take the project as the center and extend the ESG evaluation system covering the four levels of the owner's project department, the construction unit and the provincial power grid company, so as to realize the overall portrait of infrastructure functional management and project management, and also make the ESG management level and performance of the construction unit visible.
At the same time, through the ESG special committee of the power industry, ESG evaluation will be further extended to all parties involved in the project, guiding them to pay attention to ESG performance, promote high-quality development, build an equal market entity status and a friendly and clean relationship between Party A and Party B, and jointly form a high-quality project construction ecosystem.
Southern Weekly researcher Kang Hua
Editor-in-charge: Sun Xiaowen