Katherine Neebe is vice president, national engagement and strategy and chief sustainability officer at Duke Energy, and president of the Duke Energy Foundation . Duke Energy is one of the largest energy holding companies in America and provides electricity to 7.8 million customers in six states, serves more than 1.6 million customers with natural gas in five states and through its commercial business owns and operates diverse power generation assets, including a portfolio of renewable energy projects. Katherine leads Duke Energy’s strategy to deliver on the dual goals of meeting customer needs for reliable and affordable energy and achieving the company’s goal of net-zero carbon emissions by 2050.
Katherine’s deep expertise in stakeholder engagement , environmental sustainability, and social impact is grounded in her prior roles at Walmart and the World Wildlife Fund (WWF) . Her work has spanned leading Walmart’s environmental, social, and governance strategy (ESG) and managing one of the world’s largest corporate non-governmental organization (NGO) partnerships with The Coca-Cola Company , focusing on water, agriculture, and climate in more than 45 countries.
Katherine was a First Movers fellow through the Aspen Institute in 2019.
Chrissa Pagitsas: Duke Energy plays a critical role in the US utilities infrastructure. Can you tell me what services and operations Duke Energy encompasses?
Katherine Neebe: Duke Energy is one of the largest energy providers in the United States of America. We operate a vertically integrated utility, which means we have generation, transmission, and distribution. There are around 30,000 employees who work for the company. We serve around seven million customers, primarily in the Southeast and Midwest regions. We have been in business for over 100 years.
Our corporate purpose is to power the lives of our customers and the vitality of our communities. Our business goal is a commitment to achieve net-zero carbon emissions by 2050. This commitment has two interim milestones—to be net-zero in methane emissions by 2030 and to at least halve our emissions from electricity generation by 2030 relative to a 2005 baseline. Fundamentally, I would argue that one of our biggest challenges as a society is climate change, which drew me to Duke Energy. The company has other products and services, but how we solve climate change is imperative.
Pagitsas: Your role is vice president of national engagement strategy and chief sustainability officer. You are also president of the Duke Energy Foundation. What do those roles encompass?
Neebe: I was brought on to focus on three primary areas at the company—sustainability, stakeholder engagement, and our philanthropic work. Specifically, I lead Duke Energy’s stakeholder engagement efforts to develop solutions to meet customer needs for continued reliable and affordable energy while simultaneously working to achieve the company’s goal of net-zero carbon emissions by 2050. In my capacity as president of the Duke Energy Foundation, we provide more than $30 million in support to meet the needs of communities where Duke Energy customers live and work. 2021 has been particularly challenging, and I’m proud of the way the Foundation rapidly pivoted to address both COVID-19 relief and racial equity and social justice efforts.
Pagitsas: Why is sustainability important for Duke Energy?
Neebe: We are at an interesting time for the energy sector because it’s going through a massive transformation. When I think about Duke Energy’s ability to achieve its ambition by 2050, the pace of change will be tremendous. We have a clear line of sight to the technology required through 2035 as we seek to decarbonize the grid.
Many of the technologies that will take us further, all the way to net-zero, are in their nascency but rapidly advancing and hopefully coming to scale soon. When the sector transforms and decarbonizes, we will be able to make a substantive contribution to help mitigate the impacts of climate change in a way that a lot of other companies simply can’t because they’re not in the sector that we’re in.
Pagitsas: Where is Duke Energy on its sustainability journey?
Neebe: We’re contemplating the largest retirement of coal-fired units in our industry, and we have already retired fifty-four coal-fired units. This is a journey that we’ve been on for over a decade, and we’ve already seen a lot of success. We’ve reduced our emissions by more than forty percent relative to 2005. So, we know what good looks like. But we have work in front of us as well. It’s exciting and will be challenging. It will require great dialog, partnership, and conversation with all of our stakeholders, including our regulators, our investors, our customers, and civil society, to get to net-zero in a way that maintains reliability and affordability.
Pagitsas: What additional impacts does Duke Energy’s strategy have?
Neebe: Sustainability is not just the environmental side of the table. It also looks at economic and social impacts. When I think about social, I think about three areas of focus.
First, I always start with what’s in our sphere of influence. So, how do we think about jobs and the transformation? We know that technologies are going to evolve, and the job requirements are going to evolve. We’re thinking about how we are preparing our workforce by up-skilling and re-skilling and doing things of that nature. That’s one way we are looking at the intersectionality of social and economic impacts.
I also think about our customers, a second core area of focus. For example, let’s consider the COVID-19 pandemic. We know our customers and our communities were impacted profoundly by the pandemic in terms of job loss—in particular, those who are underserved. Underrepresented communities have been disproportionately impacted. As a utility providing power, we have to think about all of our customers and communities and how we are serving them and evolving our business to meet their needs.
Then the third core area is this notion of community vitality. I think about the role that Duke Energy plays in our communities, not just from jobs but from sourcing and how we’re bringing other companies and other industries to the regions where we operate. Together, we are helping to bring new jobs, economic growth, and economic development. I think that’s critical.
Recently, we had a team meeting where we invited the head of supply chain to share a little bit about what the team is doing and some of our work to focus on hiring in North Carolina—so, sourcing directly from our headquarters in the state of North Carolina—as well as spending north of a billion dollars with tier-one and tier-two diverse suppliers, including women-owned and minority-owned businesses. In other words, our business strategy of net-zero manifests in issues beyond climate. And I try to think through all of the dimensions as it relates to environmental, social, and governance principles and how we are applying them to our work.
Pagitsas: Duke Energy’s environmental strategy seems to be intricately woven with serving its community. Why is that?
Neebe: Yes, it is. The unique thing about Duke Energy relative to every other company I have worked at or with is that you cannot tease out our sustainability strategy or our climate strategy from our business strategy. At some companies, you sometimes try to figure out how to make sustainability relevant. In some cases, you’re trying to shoehorn it in because it’s new, and you’re trying to figure out how to make it work and embed it across the company. In other cases, you’re trying to shoehorn it in because it doesn’t really fit, and you’re trying to make a case. I think what’s different at Duke Energy is everyone at the company is playing a role in our climate strategy. It’s our business strategy. We’re making a $59 billion investment in our climate strategy over the next five years, and that’s our investment in the future growth of the business.
Pagitsas: Do you have key partners sitting at the senior leadership table who are invested in the success of the sustainability strategy?
Neebe: Yes, and it’s not just the key leaders. I would argue every person at Duke Energy has a role to play in delivering that promise and our net-zero strategy, which is so cool.
Pagitsas: What are some examples of Duke Energy’s business lines engaging that align with Duke Energy’s sustainability strategy and goals?
Neebe: There’s a fairly straightforward example of those involved in siting, building, maintaining, and scaling renewables within our regulated and commercial business. In fact, our commercial renewables business includes utility-scale and solar generation assets, distributed solar generation assets, distributed fuel cell assets, and battery storage projects across twenty-two states from twenty-one wind facilities, 150 solar projects, and two battery storage facilities, and we plan to further grow our commercial renewables portfolio by 2050. This is one critical piece of the puzzle. But I would also argue that meeting our net-zero goal includes the teams on the transmission and distribution side of the business who are playing a critical role in strengthening our grid to enable that renewable energy to go where it is needed.
In another case, we have teams that leverage technology to do things such as help customers use energy more wisely or improve restoration times in the event of severe weather. In that latter case, smart meters play a key role in improved restoration times. Last year, restoration teams were able to successfully ping 41,000 meters to verify that power had been restored after completion of repairs, saving around 5,500 truck rolls and freeing up resources during major event responses in 2020.
Pagitsas: On the environmental side, what is an example of Duke Energy’s investment to meet that ambitious 2050 goal?
Neebe: Yes, let’s talk about how we’re going from point A to point B. Just for clarity, we’ve already reduced our own carbon emissions by more than forty percent since 2005. Many people may not know or fully appreciate that we’re already a leader in low-carbon intensity. I point to the Carolinas, where fifty percent of the energy produced is from a zero-emitting source, which is nuclear. As it relates to energy intensity, we’re already a strong company and a leader in our industry.
Of course, we’re overseeing the largest coal retirement in our industry with a plan to retire all coal-only units by 2030 in the Carolinas. We’ve accelerated the closure of coal plants in Indiana, shortening the average retirement dates by about forty percent on top of the fifty-one units we’ve already retired across our fleet. So, this is a transformation that is not new to Duke Energy. It’s been a transformation journey we’ve been on for quite some time.
Pagitsas: What’s the strategy behind the transformation journey?
Neebe: There are four things that I’ll dig into and unpack. The first thing we know is that we need to invest in more renewables. We’ve got to focus on expanding energy storage. We also know there is a role for carbon-free nuclear. I spoke about it before in the powerful role nuclear energy is already playing today. Then, we need to think about dispatchable resources which is energy that power grid operators can send on-demand according to market needs like natural gas. Those last two technologies I spoke about when it comes to affordability and reliability cannot be understated.
So, on the renewables front, today, we’ve got around eight gigawatts that we’ve contracted, we own, or we operate. We are on track to pass 16,000 megawatts by 2050 and 24,000 megawatts by 2030 for our regulated utilities. By 2050, renewables will represent forty percent or more of our energy mix, which is significant growth.
On the storage front, a lot of attention is being placed there. During the next five years, we anticipate spending around $600 million on new battery storage. What I find fascinating about storage is that everyone I run into thinks that batteries are a new-fangled technology that is being developed and scaled. We are seeing real progress in battery technology and how it’s helping maintain reliability, particularly as you bring on technologies like wind and solar that are more variable.
However, there’s battery storage that’s been on the grid for years. For example, Bad Creek and Lake Jocassee, hydroelectric stations owned by Duke Energy, are pumped hydro storage and represent more than 2,200 megawatts of power. This technology is more than 100 years old. While there are a variety of different battery technologies, we expect to grow battery storage by over 13,000 megawatts by 2050. As a technology, battery storage is a great example of innovative new technology and technology that’s been around for a long time.
Pagitsas: You’ve mentioned innovation. Some would say that utility companies are not innovative and don’t use new technology. Yet you’re saying something different. You’re saying that there is “old” technology that’s good, and then there’s new technology to be explored. Why are you using “old” technology?
Neebe: In my experience, the sustainability community tends to chase after the bright and shiny or the next new innovation that’s going to save us from tomorrow but isn’t yet available. I am sympathetic to the argument that innovation is going to play a critical role because we do need it. But I think we need to look at the technologies that we have on hand today and figure out how we fully utilize them. Are they fully leveraged? Are we applying them in the most meaningful way? And I get the appeal of the sexy new technology, but we have to realize what we can use here and today. So pumped hydro storage? It’s a technology that’s working today. Energy efficiency and daylighting for buildings, for example, are also available today. These are all an important part of the mix and have a role to play in our energy future.
I also look at nuclear energy. Nuclear provides around fifty percent of the power we generate in the Carolinas. There is new nuclear technology on the horizon, which is one of the potential technologies that we refer to as ZELFRs, or zero-emitting load-following resources. These are important because as you bring intermittent energy and distributed energy on the grid, you have less control of those sources as a utility. In other words, you are dependent upon outside and external factors such as the sun shining and the wind blowing. To maintain reliability, you need a dispatchable fuel source, and you can bring it on—or down—quickly. Examples of ZELFRs include advanced nuclear, hydrogen, long-duration storage, and carbon capture, utilization, and storage technologies.
If we balance what we have on the grid today that is working with some of these new technologies that will be scaled and market-ready at some point in the future, I think that mix is really exciting. That’s how we’re going to deliver our net-zero ambition by 2050. It’s by using technology today and the technology of tomorrow together.
Pagitsas: How did you start your career in sustainability? What have been the key milestones along the way for you?
Neebe: It’s funny how my career always makes sense in hindsight. In the moment, it sometimes seemed less strategic! I got my start in 2000 when I worked for a small consulting company in Oregon that received some of their funding from utilities’ public funds to encourage people to install energy-efficient appliances into their homes. It’s a full circle to my work at Duke Energy!
At the consulting company, I worked on getting people to buy ENERGY STAR products and appliances and install them in their homes. I worked with a lot of utilities that were very interested in demand-side management. I also worked with those in civil society who were interested in reducing emissions and with other organizations that were focused on helping people with their utility bills. Finally, I worked with manufacturers and retailers who were interested in new market opportunities and selling a product that had a higher margin.
I just fell in love with the sustainability field, which, in my view, is about how we incorporate environmental and social objectives into the business world. It’s also the opposite of that. How do you incorporate business into environmental and social challenges? Fast-forward a bit. It took me a while to find my way in the field of sustainability. I went to the University of Virginia Darden School of Business and got my MBA because I thought I would stay in this field that was a little bit on the fringe. I needed to understand how to make sustainability effective within a business.
From there, I spent about a year focused on hog farms in eastern North Carolina and working on sustainable agriculture, an issue with ties to environmental justice. Then I moved up to Washington, DC, where I worked as a contractor for the EPA [US Environmental Protection Agency ], looking at things like clean indoor air. At the time, it was kind of a patchwork of jobs that I wasn’t sure would come together to make a career that made a lot of sense, but I was intrigued by it. We’re talking about all this happening in 2003, 2004, and 2005. Sustainability was still new, very much nascent to the private sector and before they embraced it.
About that time in 2004, I was back home working on sustainable agriculture in eastern North Carolina, and one of the people I bumped into was Hilary Davidson. She talked about climate change and worked at Duke Energy. I remember at the time being so impressed because there were so few of us working on sustainability, but to see someone from a utility that provided the power to my parents’ home talking about climate change was really awesome.
In 2007, I received an outstanding opportunity to work for the World Wildlife Fund, running a very large partnership with The Coca-Cola Company looking at freshwater, which is the main ingredient in all of Coca-Cola’s products. If they don’t have a sustainable water supply for their manufacturing, and if the local communities around those plants don’t have a sustainable supply of water, they have some real business risks. That focus has helped them take on initiatives like water efficiency, climate, and sustainable agriculture and create a best-in-class sustainability program on an issue that is core to their business success in the long term. It was extraordinary to work on that.
From there, I moved over to Walmart for seven and a half years. My career evolved in the years that I was there. From stakeholder engagement to working on particularly complex sustainability challenges like human trafficking in the seafood sector and human rights to figuring out how the company plays a role in what I call “international policy,” specifically the business voice at the UN COP [Conference of the Parties] for climate—so Paris and Bonn, and then some C-suite support on sustainability projects.
Most recently, at Walmart, I led ESG for the enterprise. I tackled the environmental, social, and governance issues that the company needed to understand were coming, how to close any performance gaps relative to those issues, and how we told our story to investors and other stakeholders, particularly thinking through the emerging mainstream investor conversation around ESG. I did that for about two and a half years. Now I’m at Duke Energy, where I have sustainability, stakeholder engagement strategy, and the Foundation. As you can hopefully see, my career comes together, but in hindsight.
Pagitsas: Clearly, you have been in this sustainability field for a long time and have seen it evolve. How would you describe it for somebody trying to wrap their arms around sustainability versus ESG? What about corporate social responsibility and impact investing? Those are some of the keywords we hear in the news these days.
Neebe: I don’t spend much time getting into the debate about which one means what. This is a field where the language evolves, the trends evolve. What I always come back to is the standpoint of a business. Fundamentally we’re talking about how we’re mitigating risk for environmental and social issues and how we’re creating value on dimensions of environmental and social factors. I set aside governance only because I think that’s fundamental to any business—governance, good ethics, compliance, and a great culture infused with values and purpose. I think good governance is fundamental to any strong business. I would set that as a distinct issue relative to ESG or sustainability.
When I advise people who are new to the field, I always suggest starting with two questions for the business. What issues matter to the company? To which issues does the company matter? These are two questions about materiality, specifically as considered by sustainability practitioners. How do you manage that risk? How do you create value? You can call it corporate social responsibility. You can call it sustainability. You can call it ESG. You can call it whatever you want. But fundamentally, what you are trying to do as a company is figuring out where you need to move and what you need to address.
Pagitsas: Let’s discuss leadership. You’ve sat in many board meetings, and you’re a part of the executive management. What are the key skills that you apply in your jobs that you think have made you successful as a sustainability leader within business?
Neebe: The things that are most fundamental are listening, prioritization, and then creating positive impact, with a subtle point about getting over the no. Taking a step back, sustainability broadly defined is problem-solving and change management. In my experience, when you want to work on something, and you’re trying to convince someone, the best thing you can do is listen to them. Understand their values, and understand their challenges. More often than not, someone will tell you not only why they can’t do something but what they need to overcome. There’s too much telling in this field and not enough listening. So that would be one.
Prioritization, second, is so critical. I go back to the questions, “What issues matter to the company?” and “To which issues does the company matter?” as being instructive in how you prioritize. There are a lot of people coming to companies with a lot of ideas, a lot of solutions, and a lot of priorities. For companies to be really effective, they must focus on that prioritization. It’s essential for them to knock out what they fundamentally can and should before they take on more. Again, this is a field where so much is coming at you.
The third skill is creating a positive impact. The way I’ve chosen to define impact is to work with very large corporations and help them pivot and evolve their business strategy in a way that captures value for taking action on sustainability. I would argue what draws people to this field is this question of impact. There are a lot of different ways that you can define impact. As a leader, throughout your career, it’s important to define or evolve what your own personal definition of impact is.
Lastly, there is getting over the no. This is a marathon, not a sprint. So, understanding when a no is a not now, and when it is a not ever or a no, I’m scared. I would go back to that first point to listen, but the subtle art here is to try to figure out how you get someone to a yes.
Pagitsas: It seems what you’re describing, the getting over the no would be an under-the-radar skill. You’re not going to see it on the job description, but it seems to be critical to the recipe for success as a sustainability leader.
Neebe: I talk an awful lot about changing hearts and minds and how you can get people to think differently. It’s not about me, the practitioner, having a good idea. It’s about how you’re transforming every organization you touch—ask smart questions and understand the nature of risk and value.
When I was at WWF, we did a site visit at a Coca-Cola manufacturing facility or production center. This was back in the mid-2000s. I was the NGO representative, and this was a time when it was novel, scary even, to let an NGO, even from WWF, into a facility with the plant managers. And we would listen. We would ask, “What you are making? What are your business goals and challenges in this region, in this country?” We’d ask for a tour of their facility. I wanted to see how they manufactured a Coke beverage from beginning to end.
We would try to conclude the visit by asking, “Where does your water come from?” More often than not, they’d point us to the water pipe coming into the facility. And we said, “Great. For the next portion of our time together, let’s go to the watershed where the water comes from.” This would allow them to look at the dimensions of risk differently from the standpoint of the risk that the watershed is facing. That part of the facilities visit helped change the way someone thought about risk and opportunity. It was fundamentally transformative. I think the secret sauce of effective sustainability is that transformation.
Pagitsas: Any other under-the-radar skills for sustainability professionals preparing to enter the field or propel their company forward?
Neebe: I think the exciting thing about sustainability is that you almost have to be a futurist. I like that the field is about looking around corners at what’s coming. What are the trends? What are the issues? What are the risks? What are the opportunities? And are they relevant to the enterprise? If so, how? Where’s that opportunity, and where is there that risk? Are you teeing up the business to be responsive when that thing in the distance is suddenly in the here and now? There’s a blend of forward-looking thinking needed with a critical eye on how, where, when, and why it will manifest itself in the company. That is what’s important—and then being able to articulate why that future issue matters.
The other thing that is often underappreciated about sustainability programs or ESG programs is we are often the advisors to the business. Now there’s some work that we own, and certainly, there’s work that we embed into an organization. However, it’s the internal business decision-makers, not the sustainability team itself, who are fundamentally transformative.
This is a conversation that I often have with people who want to get into the field of sustainability. There’s a perception that unless the word sustainability is in their title, they’re not empowered, and they won’t be able to make sustainable business decisions. Whether I was working at Walmart, advising Coca-Cola, or now stepping into my role at Duke Energy, the business decision-maker decides what to source, where to put technology, or what to invest in. That is the person that is truly making the transformative change.
Pagitsas: One of the topics that you touch on is the transformation of stakeholders toward sustainability. What does stakeholder management mean to you?
Neebe: I think business has a unique opportunity right now given where society is to fundamentally ask itself, “What is the role our services or products are providing society?” The question I’m intrigued by is, “How is business serving society?” That, to me, is the hardest stakeholder engagement question.
One of the other reasons I was attracted to Duke Energy, Walmart, and working with Coca-Cola was fundamentally to ask the question, “What societal role is this company playing?” Duke Energy is providing power. We have an obligation to provide power to everyone in our service territory. That in and of itself is a societal good. Being able to turn on the lights, power your refrigerator, or run a business is enabled by our company. This is fundamentally a societal good. The ability to do all of that reliably and affordably is also critical. Now we’re layering in increasingly cleaner energy as we address climate change.
When I think about the way that we’re solving societal problems or our stakeholders’ problems, I’m inspired every single day. It inspires me when I think about what this company can do to advance issues like diversity, equity, and inclusion, how we address climate change, mitigation, adaptation, and resiliency, and how we help build strong economies as a business through philanthropy and with our stakeholders.
When I say “stakeholders,” it could be civil society, the customer, our employees, the community, or investor—basically, all the dimensions we serve. Fundamentally, it’s about getting people together to ask questions such as, “What outcomes do we aspire to?” and “How do we optimize the system so that we can get to those outcomes?” And another important question is, “What is the cadence of change that is necessary, and what must that transformation look like?”
At Duke Energy, the specific questions I am asking are aligned with, “How do we work together to figure out what are the outcomes we aspire to?” and then, “What is the role for Duke Energy in those outcomes?” That, to me, is when you’re doing best-in-class stakeholder engagement. That’s what it looks like. That’s the conversation you’re having. It’s not stakeholder engagement or management. It’s about outcomes.