Political engagement and contributions
Sempra and its operating companies consider engaging with policymakers to be an important and necessary part of doing business. We monitor hundreds of proposed laws, rules, regulations and policies, and engage at the federal, state, and local levels of government to ensure that the perspectives of our company, our shareholders, our customers, and our employees are represented before lawmakers and regulators. When warranted, we also take positions for or against proposals and sometimes suggest amendments as part of the public policy process. When operating outside the U.S., our company complies with all applicable laws and is committed to acting in an ethical manner when conducting business.
Direct and indirect lobbying
We believe that our business — which includes natural gas infrastructure as well as various renewable resources and emerging technologies — will play a critical role in the transition to a lower-carbon energy system. The Sempra family of companies engage in direct and indirect lobbying activities at the federal, state, and local levels of government consistent with our commitment to creating long-term, sustainable value, including the important role our infrastructure plays in lowering greenhouse gas emissions.
We believe that our direct lobbying activities align with the relevant policies of the legislative and regulatory jurisdictions in which we operate (such as California’s goal to achieve economy-wide carbon neutrality by 2045 and the U.S. EPA’s methane rules) and important global multi-lateral collaborations, including the Paris Agreement’s goals of limiting average global warming to well below 2°C above preindustrial levels and pursuing efforts to limit the temperature increase to 1.5°C.i
For example, we believe that our direct engagement regarding California legislation promoting the in-state production and distribution of biomethane as a practical step toward furthering the state’s greenhouse gas and short-lived climate pollutant reduction goals aligns with the Paris Agreement because it could enable emissions reductions in transportation and agriculture, which are sources of nitrogen oxides and methane emissions, respectively. See our response to the CDP Climate Change Questionnaire for more detail on how our direct and indirect lobbying on topics related to the energy transition demonstrate the foregoing.
Sempra and its operating companies are members of several trade associations focused on the important business and technical issues of our industry and the interests of our stakeholders. As a general matter, these associations enable us to learn the views of others, obtain feedback and, ultimately, voice our perspectives on proposed legislation and regulations in an educated and thoughtful manner. Some of these associations engage in lobbying activities. We believe that our indirect lobbying activities through these associations are also consistent with a transition to a lower carbon energy system and generally align with the Paris Agreement’s goal to limit global temperature rise.
For example, one of the trade associations we are a member of advances improved natural gas production practices by working to develop a metric for methane intensity so that such emissions can be measured, compared, and reduced, which we believe aligns with the Paris Agreement’s goal to limit global temperature rise.
Trade association policies generally reflect a compromise of the membership so at times the policy positions and lobbying activities of these associations may not fully align with Sempra’s positions on a particular issue, including the Paris Agreement’s goal to limit global temperature rise, in which case we work to mitigate any risks associated with such misalignment.
Specifically, we seek to do this in three primary ways:
- Education of the association staff and key members;
- Ongoing engagement with the association to try to move consensus positions; and
- If needed, dissenting from association positions, including not providing formal company participation or endorsement.
Compliance with lobbying and disclosure laws
We believe that public policy engagement is an important and appropriate role for companies, as long as it is conducted in a legal and transparent manner. In the U.S., there are federal, state and local lobbying registration and disclosure laws with which Sempra and its operating companies comply, and the company has a robust training and reporting program in place to ensure compliance.
i The Paris Agreement, adopted in 2015, is an agreement under which 196 countries agreed to collaborate on long-term strategies focused on financial, technical and capacity-building programs with a stated goal to hold the increase in the global average temperature to well below 2°C, with a stretch target of 1.5°C, above pre-industrial levels.
Governance and decision-making
Sempra's Board of Directors, specifically the Board’s Safety, Sustainability and Technology Committee, consistent with the Board’s risk management and oversight role and responsibilities, reviews and makes recommendations to management regarding policies, practices and strategies with respect to environmental, climate change, sustainability and other related ESG matters.
Additionally, the Board’s Corporate Governance Committee reviews Sempra's public policy priorities on an annual basis, including charitable giving, political contributions and lobbying activity, which covers a broad array of efforts in support of the company’s overall strategic objectives, climate-related and otherwise.
Procedurally, corporate political spending plans and decisions are reviewed and approved by senior management.
- Individuals responsible for government affairs in each of Sempra's business units prepare political contributions budgets for the local jurisdictions and states where the company has operations.
- Those budgets are then reviewed by the business units’ boards of directors and are submitted to Sempra Energy external affairs for review and approval.
- Once budgets are finalized, each contribution is reviewed and authorized by a vice president or higher-level officer.
- Legal compliance reviews are conducted before contributions are made to ensure they comply with applicable laws. Contributions over $100,000 require approval of the most senior external affairs officer.
Sempra has a department dedicated to all aspects of compliance with applicable political laws and reporting obligations. This department, with the assistance of legal counsel, informs and educates employees, analyzes legal compliance, monitors and communicates changes in laws, and collects disclosure information in a centralized database which is then used to prepare disclosure reports. The training and outreach program consists of the following:
- An online training course required for all external-facing employees, officers, attorneys and directors;
- In-person and/or webinar training regimen for all new hires and transfers;
- In-person and/or webinar training for groups identified as having the potential for interface with public officials; and
- A company intranet site dedicated to political reporting and compliance, which has information on lobbying, gifts, contributions and political fundraising.
Management oversight for corporate political activity and the Sempra Energy Employees’ Political Action Committee resides with the highest-ranking external affairs executive of the company.
Corporate political contributions
Sempra makes corporate political contributions in the U.S. as permitted by law only from corporate shareholder funds. Political contributions are made to candidates, political parties, political action committees, and ballot measures in furtherance of public policies that support the company’s business interests.
Sempra does not use company funds to make contributions to federal Super PACs or to officeholder accounts, nor does Sempra make independent expenditures to expressly advocate for the election or defeat of federal, state, or local candidates.
If this ever were to change, all changes and updates would be disclosed semi-annually per our commitment to transparency and disclosure. Our position on U.S. energy policy, climate change or other matters material to the company are detailed in the company’s annual corporate sustainability report, where more detailed information is also provided on political involvement. The report is published annually and is available on our website, as are archived reports from previous years.
Sempra materially complies with all federal, state and local laws as well as reporting requirements governing corporate political contributions. Federal law, for example, forbids corporations from giving monetary or in-kind contributions to candidates for federal office. State and local laws dictate the conditions under which corporate political contributions may be made.
Consistent with our commitment to ethical business conduct, political spending reflects Sempra's interests and is not based on the personal interests of any of our individual officers, directors or employees. Furthermore, no contributions are given in anticipation of, in recognition of, or in return for, any official act.
Employee Political Action Committee Contributions
Sempra's employees take an active role in the political environment through the voluntary Sempra state and federal Employees Political Action Committees (collectively, SEEPAC). SEEPAC is independent of any political party. It is designed to provide the employees of Sempra Energy and its affiliates the ability to make financial contributions that can be used to support candidates and participate in the political process.
Our employee political action committee spending plans and decisions are reviewed and approved by the Political Action Committee’s Board of Directors and also receive political reporting and compliance clearance before checks are issued.
SEEPAC complies with all reporting requirements governing political action committee contributions. Employees are prohibited from making political contributions from personal funds, or through SEEPAC, and then seeking reimbursement from the company.
Trade Association & Business Memberships
Sempra holds memberships in industry, trade and business associations representing the energy industry and the business community. Engaging with other business and industry stakeholders helps us gain perspective and views on public policy issues that impact our company, our shareholders, our customers and our employees.
While we may not always agree with the positions taken by an association or its members, corporate memberships enable us to learn the views of others, obtain feedback, and ultimately, voice our concerns, perspectives and positions on proposed legislation and regulations in a more educated and thoughtful manner.
Please review our latest corporate sustainability report for more information, including our analysis of the alignment of certain trade associations in which we are involved with the climate goal set forth in the Paris Agreement, which is to limit the global temperature increase to no more than 2 degrees Celsius with an ambition set at 1.5 degrees Celsius.
Transparency and Disclosure
Sempra discloses all corporate political contributions (state and local), political committee contributions (PACs, political parties and other committee types, including 501(c)(4) and 501(c)(6) organizations), and SEEPAC contributions.
Sempra also discloses payments to other tax-exempt organizations such as business or trade association memberships where the cost of the membership exceeds $20,000 and the recipient organization reports to us that a portion of the fees paid were used for lobbying expenditures or that a portion of the contributions is considered non-deductible under Section 162(e)(1)(B) of the IRS. We disclose total fees paid to these organizations as well as the amounts attributable to lobbying expense as reported to Sempra by the associations themselves. Beginning in 2014, we began disclosing this information semi-annually.