Net Zero

We have worked for two decades to diversify and transform our generation portfolio to support our decarbonization goals. At the same time, we have implemented an aggressive plan to reduce methane emissions from our gas infrastructure. In 2020, we announced a new emissions reduction goal: net zero carbon dioxide and methane emissions, from both our electric and gas businesses, by 2050. In February 2022, we broadened that Net Zero commitment to encompass emissions outside of the company's direct operations.

Dominion Energy's Net Zero commitments now cover what are known as Scope 2 and material Scope 3 emissions – those generated upstream of company operations by suppliers and downstream by customers. Scope 2 emissions are those emitted from electricity the company consumes but does not generate. The Scope 3 portion of the commitment includes emissions from three material categories: electricity purchased to power the grid, fuel for our power stations and gas distribution systems, and consumption by our natural gas customers. These areas cover nearly all Scope 3 emissions measured and reported in the company's 2021 Climate Reportopens in a new window. As discussed in more detail below, the company plans to reduce these emissions by continuing to transform our generation fleet, as well as through programs focused on fuel supplier engagement, customer empowerment, constructive public policy, and technology innovation. As we do so, we remain committed to maintaining customer reliability and affordability, and mindful that many of these approaches require legislative and/or regulatory support.

In 2021, we announced a new Green Fleet initiative intended to reduce Scope 1 emissions from company vehicles. Under the program, by 2030 75% of passenger vehicles will be converted to electric power and half of work vehicles will be converted to plug-ins, battery electric vehicles, or vehicles fueled by cleaner-burning alternatives such as hydrogen, RNG, and compressed natural gas (CNG). After 2030, 100% of all new vehicles we buy will be powered either by electricity or by alternative fuels⁴.

In pursuit of that goal, in 2021 we acquired or ordered 33 electric or plug-in hybrid electric passenger vehicles, 27 plug-in bucket trucks, 44 CNG conversion pickup trucks, 41 electric forklifts, and 13 electric UTVs.

Further, we engaged with a consulting firm to validate our fleet sustainability commitment and provide a framework for converting vehicles and installing charging infrastructure, and we developed an internal fleet-charging roadmap to roll out new charging infrastructure that complements infrastructure already in place.

Scope 1, 2, and 3

Our Net Zero commitments now cover carbon and methane emissions within our direct control (known as Scope 1 emissions) as well as what are known as Scope 2 and Scope 3 emissions. Scope 2 emissions are those emitted from electricity the company consumes but does not generate. Scope 3 emissions are generated upstream of company operations by suppliers and downstream by customers. The graphic below represents examples of each of these scopes of emissions.

Scopes 1, 2, and 3 GHG Emissions

Additional Scope 3 sources of emissions that occur but are not currently considered material include: Capital goods (e.g., upstream emissions from manufacturing and transportation of other capital assets purchased in a given year), purchased goods and services (supply chain), employee commuting, business travel, waste generated in operations and disposed of off-site, and transmission and distribution losses from electric operations.

The energy sector is leading the U.S. in reducing greenhouse-gas emissions, cutting them almost 40% between 2005 and 2020. We are ahead of the industry average, having cut carbon emissions from our electric generation business by approximately 46%.

We are retiring coal-fired generation, investing in renewables, tracking our progress closely to hold ourselves accountable, and providing this information externally. We are pursuing a diverse mix of cleaner, more efficient, and lower-emitting methods of generating and delivering energy, while advancing aggressive voluntary measures to continue reducing emissions and maintaining reliable service and affordability. (For more, see “Electric Diversity and Reliability”)

We have cut methane emissions substantially by investing in new infrastructure, changing our maintenance programs, and deploying new technology. From 2010 through 2021, we cut methane emissions from our natural gas business by 38%. As part of our Net Zero framework, we expect to cut methane emissions from our natural gas infrastructure 65% by 2030 and 80% by 2040, from 2010 levels. Dominion Energy is a leader in efforts to reduce methane emissions. The company has been a founding member or leading participant in the EPA’s Natural Gas STAR (NgSTAR) Program, the EPA’s Methane Challenge Program, the Natural Gas Sustainability Initiative (NGSI), and the ONE Future Coalition. We are working to reduce not only our Scope 1 emissions from our natural gas business, but our Scope 3 emissions as well.

To reduce emissions from our gas operations, we rely primarily on four approaches:

• Reducing or eliminating gas venting during planned maintenance and inspections. For instance, we use Zero Emission Vacuum and Compressor (ZEVAC^®) technology to capture natural gas before maintenance activities or inspections so it can be recycled.
• Replacing targeted infrastructure and equipment with new, lower-emitting or emission-free equipment.
• Expanding leak detection and repair programs. Among other voluntary efforts, we use voluntary Leak Detection and Repair (LDAR) programs to detect and repair minor sources of emissions.
• Innovation. For example, we are using Pipetel in-line inspection robots to inspect gas pipelines not accessible through our usual smart pigging process.

We look for other ways to reduce methane emissions as well. For instance, our Wexpro group developed a prototype to replace pneumatic controllers running on natural gas with electrically driven devices. This prototype was successful and implementation is underway. Even with current supply chain constraints, Wexpro anticipates full conversion on 60 wells by the end of 2022, with complete implementation on roughly 800 wells being completed by the end of 2024. The new approach should both improve safety and reduce methane emissions.

To learn more, read our Methane Report in the "Downloads" section.

Hydrogen represents an exciting new energy frontier, potentially capable of producing vast amounts of energy with limited or no carbon emissions. In Utah, we successfully tested the blending of hydrogen with natural gas on a small scale on our distribution system with significant results. Our pilot project confirmed extensive industry research that at modest blending levels, hydrogen can deliver safe, reliable, and sustainable energy without impacting appliance or system performance. We are in the process of expanding our pilot to a Utah community to field-test blending on a broader scale. We are conducting similar pilots in our North Carolina and Ohio training centers, and the company is engaging with regional coalitions in support of establishing a national hydrogen hub.

Building on plans to achieve Net Zero carbon and methane emissions from our power generation and natural gas operations by 2050, Dominion Energy is also working to achieve Net Zero for emissions outside of the company's direct operations. These include emissions generated downstream by customers and upstream by suppliers.

We are pursuing a variety of approaches:

• Soliciting emissions disclosures from suppliers, promoting the adoption of Net Zero policies, and building coalitions with industry peers.
• Offering efficiency programs, such as weatherization and industrial audits, and offering a carbon calculator so that customers can better understand how to reduce their emissions.
• Offering carbon offset and renewable natural gas programming throughout our natural gas footprint.

Further, as we transform our generation fleet, bringing more solar and wind power onto the grid, we expect those emissions we directly control will decrease. As they do, we expect a decrease in Scope 3 emissions related to fuel and purchased power.

Our focus on sustainability extends beyond our gas and electric operations. We also pursue sustainability in our office buildings and supply chain. Every day, our employees take steps to help us achieve our commitments and reduce our impact on the environment. We developed a supply chain sustainability strategy focused on increasing partnership and engagement with suppliers, industry peers, and employees to improve environmental and social sustainability performance, implement best practices, minimize environmental harm, ensure respect for human rights, and mitigate potential risks across our value chain. We maintain programs to select and evaluate suppliers based on their commitment to environmental compliance.

Dominion Energy is a member of the Electric Utility Industry Sustainable Supply Chain Alliance (EUISSCA) and is committed to engaging our peers and suppliers on sustainability to ensure continuous improvement. Our Vice President of Shared Services, who leads our supply chain organization, chairs EUISSCA’s executive committee. In 2021, Dominion Energy was recognized as the EUISSCA Member of the Year by utility peers for setting a robust 2025 sustainability commitment and roadmap, actively engaging suppliers on the sustainability journey, and leading supply chain sustainability efforts for the industry.

Annually, we conduct a sustainability assessment on how key material and services suppliers manage environmental impacts across their organization. In 2021, we achieved a 67% response rate, a 25% increase from the base year 2019. By 2025, we will target a 95% response rate to our supplier sustainability assessment and require key suppliers to disclose GHG emissions and targets.

In 2021, we launched Momentum, a supply chain sustainability conference focused on educating and engaging key suppliers. The event included industry insights and highlighted Dominion Energy’s supply chain sustainability commitments and key initiatives, including our GHG reporting requirement.

Supplier diversity is also an important component of supply chain sustainability. For more information, see the section on “Supplier Diversity”.

This edition of our annual Sustainability and Corporate Responsibility report primarily covers our company’s actions for the calendar year 2021. At the same time, we are focused on key developments that will drive future actions and carry out our strategy to become the most sustainable energy company in the country.

Last year, we published a forward-looking Climate Reportopens in a new window to provide more transparency about potential paths toward a Net Zero future. The report, which followed the framework of the Task Force on Climate-related Financial Disclosures, provided analysis of the business risks and opportunities presented by climate change and the transformation of the energy industry. Our aim is to minimize our emissions footprint and ensure resiliency to climate change, continued long-term growth for our investors, and continued support for our communities and other stakeholders. Importantly, we must do so while maintaining the service reliability and affordable rates our customers depend on.

In late 2022, we plan to publish an updated climate report that considers material developments in climate science, market developments, and business considerations, as well as our expanded Net Zero commitments related to Scope 2 and 3 emissions.

Dominion Energy’s corporate lineage includes companies that operated canals in colonial times and streetcars in the early 20th Century. Today, our deep roots give us strength as we grow in new directions by embracing changes that improve our customers’ experience, exceed our stakeholders’ expectations, and position our company for sustainable, agile, and long-term success.

Our innovation strategy is designed to support the clean energy transition by exploring new markets for existing businesses and new lines of business in adjacent or other markets; enhancing performance; increasing earnings; and accelerating the culture of innovation through employees who work as Innovation Guides and Innovation Accelerators to move ideas forward and embrace an innovation mindset.

We pursue that strategy and continue to reinforce our culture of creative problem-solving through multiple avenues:

• A dedicated Innovation team that advances the innovation culture and evaluates transitional technologies.
• Spark Tank, a competition that recognizes the best new ideas from employees.
• The Lyra Innovation Lab, Dominion Energy’s new business incubator where employees learn the skills to launch innovative new efforts within the company.
• The Chairman’s Excellence Awards, a competition that recognizes the best employee innovations that have been adopted for use in the business.
• Innovation Guides and Accelerators, who support crowdsourcing challenges, encourage collaboration, research and pilot new technology, and help fellow employees develop their skill sets and flesh out their ideas.
• Crowdsourcing challenges, which seek to solve existing problems or generate creative solutions to problems that might arise.
• Sprint teams, which join employees from across the company to evaluate innovative technologies and business models.
• The Innovation Expo, an annual event that brings the company together to listen to keynote speakers, attend breakouts on disruptive technology and the future of sustainable energy, participate in workshops, and network with innovative companies attending to showcase their services and products.
• External partnerships, which inject fresh perspectives and facilitate the free exchange of ideas.
• Envision Tomorrow, a companywide effort to work smarter, using employee ideas that lead to efficiency, create current or future savings, improve processes and optimize workflows.
• Incremental innovations at the operating-segment level that improve performance outside the confines of a formal innovation program.

Fittingly, Dominion Energy’s approach to innovation is constantly evolving.

In early 2021, the company unveiled a new Innovation Recognition and Rewards policy designed to incentivize creativity. Under the policy, employees who come up with new ideas can receive spot cash awards. If the company develops the idea for commercialization, the creators will become eligible for a share of the resulting revenue.

During the course of 2021, we developed a new program to curate and incubate innovations likely to have enterprise-level impact. The Lyra Innovation Lab provides employee innovators with mentorship; professional training on problem validation, prototyping, marketing and scaling; and more.

Our business segments continue to pursue their own innovations. For example, we are placing low-cost, solar-powered mobile weather stations at our solar sites to detect rainfall and improve our response to stormwater runoff. The plug-and-play capability of the stations allows us to add more sensors to monitor other potential environmental issues. We can now monitor local pop-up storms from a central office and respond promptly, improving environmental performance.

In South Carolina, our gas distribution group worked with Dominion Energy's IT analytics team to develop an artificial-intelligence solution to predict high-risk excavations using tickets from our 811 program, which allows customers to mark buried utility infrastructure before they dig. The resulting insights enabled our Gas Damage Specialists to intervene before third-party excavators could dig into our natural gas lines. The process has reduced the frequency of third-party damage by approximately 22% — leading to fewer gas leaks and lower methane emissions.

The clean-energy transition touches many stakeholders: the people who have built and run the energy industry, vendors and suppliers, the communities the industry calls home, and the environment. Making the transition a just one minimizes potential harm and ensures benefits are shared equitably. Dominion Energy is committed to doing so.

We are already putting the principles of a just transition into practice. We retired our fossil-fuel-powered Bremo Power Station in Fluvanna County, Virginia, in 2019. Nine of the station’s employees were impacted by the closure. We offered all of them other positions within the company with the same or better compensation, options for severance packages, or both. Those who left the company did so on their own accord and with support. Many vendors and suppliers continued to support the decommissioning efforts. The company offered and continued to pay full taxes to Fluvanna for an additional two years to assist the local community. Retiring the facility reduces emissions, benefiting the environment and the surrounding region. To ensure environmental safety, environmental efforts will continue well after the site is reclaimed.

This example is not unique. We are offering employees development opportunities through our education assistance program and partnerships with community colleges; internal re-skilling and up-skilling; and employee education about clean energy jobs and retirement opportunities. As we consider closing facilities, we are holding advance discussions with state and local leaders about the effects of such closures, as well as clean-energy opportunities. We are practicing greater outreach and transparency around how external vendors, suppliers, and job seekers can work as part of the clean-energy economy. When developing clean-energy projects, we also are scrutinizing opportunities for environmental protection measures such as preserving prime farmland.

Dominion Energy is committed to making the effects of the clean-energy transition positive as we continue to provide safe, reliable, and affordable energy.