2018 | ENVIRONMENTAL, SOCIAL, GOVERNANCE AND SUSTAINABILITY REPORT
Compliant with Edison Electric Institute (EEI) and American Gas Association (AGA) Templates in place as of Nov. 29, 2018
2018 • ENVIRONMENTAL, SOCIAL, GOVERNANCE, AND SUSTAINABILITY REPORT • CMS ENERGY & CONSUMERS ENERGY • 1
2018
Environmental, Social, Governance (ESG) and Sustainability Report
SECTION 1: QUALITATIVE INFORMATION
Introduction
CMS Energy, including our primary subsidiary, Consumers
Energy, has integrated sustainable principles throughout
all levels of our company. Our commitment to the
triple bottom line — People, Planet and Profit — is our
foundation. As Michigan’s largest utility, consideration
of environmental, social and governance (ESG) issues is
embedded in our strategy, business planning and enterprise
risk management processes. These commitments align with
our purpose: World Class Performance
Delivering Hometown Service. The triple
bottom line balances the interests of all
of our stakeholders, including employees,
customers, suppliers, regulators, Michigan
residents and the investment community.
CMS Energy is participating in voluntary
industry initiatives, coordinated by the
Edison Electric Institute (EEI) and the
American Gas Association (AGA), to provide the public, our
customers and investors with uniform and consistent ESG
and sustainability-related metrics. This report supplements
our existing disclosure on these issues, including the 2018
Sustainability Report. CMS Energy also published a Climate
Assessment Report in November 2018, which can be found
here.
At CMS Energy, we know climate
change is hap-pening, and
know we can do our part to care
for the planet by focusing on a
clean and lean operating strategy.
2018 • ENVIRONMENTAL, SOCIAL, GOVERNANCE, AND SUSTAINABILITY REPORT • CMS ENERGY & CONSUMERS ENERGY • 2
Governance
CMS Energy and Consumers Energy have multiple levels of
sustainability oversight integrated into our daily operations.
We use a variety of governance and risk management
tools when addressing ESG and sustainability matters.
These include, among others, oversight by the CMS Energy
and Consumers Energy Boards of Directors (Board), an
enterprise risk management program, and robust strategic
and business planning processes.
The Board is made up of a number of directors with experience and knowledge of ESG
and sustainability issues. The Board has the highest level of oversight over our ESG and
sustainability practices. Review of these practices occurs at the Board level by the Audit
Committees (Audit Committee), Governance, Sustainability and Public Responsibility
Committees (Governance Committee) and the Compensation and Human Resources
Committees (Compensation Committee). The Audit Committee oversees our
enterprise risk management framework, which includes strategic and operational risks,
as well as the processes, guidelines and policies for identifying, assessing monitoring
and mitigating such risks.
Risk management is embedded into business processes
and key decision making at all levels of the company. The
Governance Committee is responsible for reviewing and
evaluating the composition of the Board, recommending
Board nominees, broadly overseeing the corporate
governance and advising and assisting the Board on public
responsibility and sustainability matters.
Acknowledging the growing importance of sustainability
and climate-related matters, the Board in 2018 formally
tasked the Governance Committee with oversight of sustainability practices by adding
this responsibility to its charter. The Compensation Committee is responsible for our
executive compensation structure, benefit and compensation plans and critical human
resource programs. The committee charters can be found at CMSEnergy.com.
2018 • ENVIRONMENTAL, SOCIAL, GOVERNANCE, AND SUSTAINABILITY REPORT • CMS ENERGY & CONSUMERS ENERGY • 3
We also have an Environmental Advisory Committee, made
up of senior leadership that influences our environmental
compliance and sustainability programs and governs
decisions that support our commitment to the planet. This
includes short and long-term strategic decisions and ESG
disclosure reporting.
In addition to a robust oversight structure, CMS Energy has
an Enterprise Risk Management (ERM) program to ensure
risks that may have a significant impact on the business are
known and understood, and thus inform risk mitigation strategies.
The scope, objectives and roles and responsibilities related to the ERM program are
included in the company’s Corporate Risk Policy, which is approved by the Audit
Committee of the Board. The ERM program covers risks across several areas, including
strategic, operational, regulatory, environmental, financial, information technology
operations and cyber security for CMS Energy and its subsidiaries.
Strategy and Integration
Internal and external data sources are leveraged as input into
our long-term strategic planning. This data is analyzed, used
to update trend metrics and synthesized into an update on
trends critical to our current and future business.
This data influences multiple areas of our strategy including
distributed energy resources, wholesale markets, customer
energy usage trends and climate policy. This information is
used to assess our strategic choices and the assumptions underlying our strategy.
The senior team and Board engage with the insights and conclusions of this work
multiple times each year to evaluate the strategic choices and test for potential new
opportunities or threats.
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Stakeholder Engagement
We spend significant time and effort listening to our
customers and key stakeholders before making decisions.
Our long-term resource plans and our environmental
and sustainability strategies consider People, the Planet,
and Profit. For example, in 2017 and 2018 we engaged
stakeholders in the development of our Clean Energy
Breakthrough Goal as well as the development of our
Integrated Resource Plan (IRP). That IRP engagement
included a series of widely promoted public forums to give stakeholders an opportunity
to provide input on our long-term resource plans. These forums were designed as basic
informational and educational sessions with the chance to make comments and ask
wide-ranging questions about topics such as renewable energy,
energy efficiency and emerging technology.
We also have an on-going outreach program to develop and
maintain communication with our investors. We value these
discussions, and the Board considers feedback when evaluating corporate governance
issues. Our management regularly participates in investor and industry conferences
throughout the year to discuss performance and ESG topics. Shareholders, employees
and third parties may contact the Board with any inquiry or issue by the methods
described on our website. The Board will respond as appropriate.
Climate Change
In the past five years, Consumers Energy has created a
cleaner, more sustainable energy future for Michigan by
taking a leadership position in reducing air emissions, water
usage and landfill waste.
“Our actions speak louder than words and we have a track
record of doing more than is required. Our actions to date
have reduced our carbon emissions by 38 percent, reduced
our water usage by 35 percent and avoided over one million cubic yards of landfill
disposal,” said Patti Poppe, president and CEO of CMS Energy and Consumers Energy.
2018 • ENVIRONMENTAL, SOCIAL, GOVERNANCE, AND SUSTAINABILITY REPORT • CMS ENERGY & CONSUMERS ENERGY • 5
But we are not satisfied. In February 2018, Consumers Energy announced a goal to
reduce carbon emissions by 80 percent compared to 2005 levels and produce energy
with zero coal by 2040. At the same time, we plan to have renewable energy sources
and energy storage deliver more than 40 percent of our energy. Consumers Energy
is embracing a cleaner and leaner vision, focused on eliminating wasted energy and
adding more renewable energy sources, such as wind and solar.
Renewable Energy
As outlined in our IRP, we plan to add 550 megawatts of
wind to help us reach Michigan’s 15 percent renewable
energy standard by the end of 2021. We plan to add capacity
on an incremental basis, allowing flexibility in planning
and resource type to adapt to changing conditions. We’re
proposing 5,000 megawatts of solar energy with a ramp-up
throughout the 2020s to prepare for the retirement of certain
fossil-fueled units, as well as the end of some power purchase
agreements. The additional solar capacity may be a mix of
owned and purchased. The plan forecasts renewable energy
levels of:
• 25 percent by 2025.
• 37 percent by 2030.
• 43 percent by 2040.
This plan would help Consumers Energy reduce carbon
emissions by more than 90 percent from 2005.
Since 2005, Consumers Energy’s renewable capacity has
grown from 3 percent to 11 percent. We look forward to this
percentage growing as we transition from coal to renewables
in support of our clean energy goals.
We own and operate two wind farms: Lake Winds® Energy
Park in Mason County and Cross Winds® Energy Park in
Tuscola County.
We are proud to provide the strong leader-ship to protect our planet and our home state for generations to come.
2018 • ENVIRONMENTAL, SOCIAL, GOVERNANCE, AND SUSTAINABILITY REPORT • CMS ENERGY & CONSUMERS ENERGY • 6
In addition to wind, we’ve listened to customers to develop
new renewable energy sources including:
• Operating solar power plants at Grand Valley State and
Western Michigan universities that collectively generate
up to 4 megawatts of clean energy.
• Offering a pilot program for households to install solar
panels on rooftops.
• Launching a pilot program to allow businesses to
purchase 100 percent clean energy, helping businesses achieve their corporate
sustainability goals.
• Buying electricity from the 100-megawatt Apple Blossom wind farm in the Thumb.
Enabling Our Strategy
In addition to focusing on ESG-related issues in our core business, we also leverage our
philanthropic initiatives in corporate giving and employee volunteerism to focus on
our key People, Planet and Profit objectives.
Consumers Energy Foundation
Since 1990, the Consumers Energy Foundation has provided
grants and mobilized volunteers to strengthen local
education, social services, the environment and community,
economic and cultural development. Foundation giving is
separate and distinct from other company contributions, and
cannot be used to directly benefit the corporation.
The Foundation uses shareholder funds, along with
contributions from current employees and retirees to support nonprofit organizations
across Michigan and help create sustainable communities. In 2017, Consumers Energy,
our charitable foundation and employees contributed more than $17 million to
nonprofit organizations in the communities we serve.
2018 • ENVIRONMENTAL, SOCIAL, GOVERNANCE, AND SUSTAINABILITY REPORT • CMS ENERGY & CONSUMERS ENERGY • 7
Volunteerism
Our company has a long history of supporting active
employee volunteerism in a variety of areas. The company
targets key volunteer opportunities that make a difference –
ensuring our branded “Blue Shirts” make a strong showing
at key community events.
The company implemented an online technology platform
(CE Volunteers) in late 2017 to increase recruitment and
engagement in volunteer opportunities as well as provide metrics and data about
employee volunteerism that did not previously exist. In November and December of
2017, employees were asked to report 2017 volunteer hours in the new platform.
More than 11,000 hours were reported; however, we expect many more volunteer
hours were accrued throughout the year. As of August of 2018, approximately 10,500
volunteer hours in the communities we serve have been reported.
Other Resources
We provide extensive public reporting and are forthcoming
in disclosures about ESG and sustainability, including
our environmental stewardship and long-term strategy.
We address these matters in Securities and Exchange
Commission, Environmental Protection Agency and other
regulatory agency filings, and by voluntarily reporting our
climate risk strategy and related data to CDP (formerly
known as the Carbon Disclosure Project).
Additionally, we continually update and enhance disclosures relating to sustainability
efforts on our website and in our Sustainability Report, which provide a better
understanding of the breadth and depth of our climate-related planning and practices
and can be found at ConsumersEnergy.com. Information on key performance
indicators for Consumers Energy, the principal subsidiary of CMS Energy, can also be
found in the chart below.
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SECTION 2: QUANTITATIVE INFORMATION
Disclaimer: All information below is being provided on a voluntarily basis, and as such, companies may elect to include or exclude any of the topics outlined below and customize the template to their specific needs. The decision to include data for historical and future years is at the discretion of each company and the specific years (e.g., historical baseline) should be chosen as appropriate for each company.
Parent Company: CMS Energy Corporation
Operating Company(s): Consumers Energy Company
Business Type(s): Electric and gas utility
State(s) of Operation: Consumers Energy - Michigan
State(s) with RPS Programs:
Regulatory Environment: Both Regulated and unregulated; Federal Energy Regulatory Commission, Michigan Public Service Commission, and Federal, state and local environmental laws and regulations
Report Date: 8/27/2018
CMS Energy Website: CMSEnergy.com
Consumers Energy Website: ConsumersEnergy.com
Sustainability Report: https://consumersenergy.cld.bz/Consumers-Energy-2017-Sustainability-Report
The quantitative information on pages 8 – 12 is Consumers Energy data only. CMS Energy is the parent company of Consumers Energy.
Baseline Last Year Current YearEMISSIONS 2005 2016 2017
PORTFOLIO
Owned Nameplate Generation Capacity at end of year (MW)1
Coal 3,055 2,105 2,105
Natural Gas 1,157 2,487 2,487
Nuclear 812 N/A N/A
Petroleum 729 720 720
Total Renewable Energy Resources 1,029 1,338 1,338
Biomass/Biogas N/A N/A N/A
Geothermal N/A N/A N/A
Hydroelectric 1,121 1,122 1,122
Solar N/A 4 4
Wind N/A 212 212
Other N/A N/A N/A
Purchased Power Nameplate Generation Capacity at end of year (MW)
Coal 173 160 160
Natural Gas 1,392 1,396 1,396
Nuclear N/A 813 813
Petroleum N/A N/A N/A
Total Renewable Energy Resources 212 603 706
Biomass/Biogas 202 234 235
Geothermal N/A N/A N/A
Hydroelectric 9 20 22
Solar N/A 7 7
Wind 2 342 442
Other N/A N/A N/A
1 Represents Consumers Energy’s share of the capacity of the J.H. Campbell 3 unit, net of the 6.69-percent ownership interest of the Michigan Public Power Agency and Wolverine Power Supply Cooperative, Inc., and Consumers Energy’s 51-percent share of the capacity of Ludington. DTE Electric holds the remaining 49-percent ownership interest.
2018 • ENVIRONMENTAL, SOCIAL, GOVERNANCE, AND SUSTAINABILITY REPORT • CMS ENERGY & CONSUMERS ENERGY • 9
Baseline Last Year Current YearEMISSIONS (cont) 2005 2016 2017
Net Generation for the data year (MWh)
Coal 18,810,000 9,739,000 10,098,000
Natural Gas 119,500 6,161,500 5,154,000
Nuclear 5,336,000 N/A N/A
Petroleum 111,500 40,500 48,000
Total Renewable Energy Resources -93,000 767,000 788,000
Biomass/Biogas N/A N/A N/A
Geothermal N/A N/A N/A
Hydroelectric -93,000 136,000 189,000
Solar N/A 4,000 6,000
Wind N/A 627,000 593,000
Other N/A N/A N/A
Purchased Power for the data year (MWh)
Coal 482,522 512,000 491,000
Natural Gas 7,061,151 5,995,000 5,521,000
Nuclear N/A 6,927,000 6,780,000
Petroleum N/A N/A N/A
Total Renewable Energy Resources 1,236,343 2,148,000 2,245,000
Biomass/Biogas 1,199,810 1,194,000 1,234,000
Geothermal N/A N/A N/A
Hydroelectric 33,964 45,000 52,000
Solar N/A 7,000 6,900
Wind 2,569 902,000 952,000
Other 219,151 3,688,000 4,384,000
Investing in the Future: Capital Expenditures, Energy Efficiency (EE), and Smart Meters
Total Annual Capital Expenditures (nominal dollars) $593,000,000 1,656,000,000 1,632,000,000
Incremental Annual Electricity Savings from EE Measures (MWh) N/A 352,022 562,121
Incremental Annual Investment in Electric EE Programs (nominal dollars) N/A 77,215,000 13,500,000
Percent of Total Electric Customers with Smart Meters (at end of year) N/A 75 99
Retail Electric Customer Count (at end of year)
Commercial 214,025 221,483 220,734
Industrial 8,595 1,485 1,433
Residential 1,565,601 1,595,470 1,601,688
GHG Emissions: Carbon Dioxide (CO2) and Carbon Dioxide Equivalent (CO2e)
Owned Generation
Carbon Dioxide (CO2)
Total Owned Generation CO2 Emissions (MT) 20,157,066 12,968,880 12,831,770
Total Owned Generation CO2 Emissions Intensity (MT/Net MWh) 0.750 0.791 0.797
Carbon Dioxide Equivalent (CO2e)
Total Owned Generation CO2e Emissions (MT) N/A 13,001,487 12,890,968
Total Owned Generation CO2e Emissions Intensity (MT/Net MWh) N/A 0.793 0.801
Purchased Power
Carbon Dioxide (CO2)
Total Purchased Generation CO2 Emissions (MT) 3,799,350 7,849,679 7,196,288
Total Purchased Generation CO2 Emissions Intensity (MT/Net MWh) 0.420 0.403 0.370
Carbon Dioxide Equivalent (CO2e)
Total Purchased Generation CO2e Emissions (MT) N/A 7,875,639 7,229,254
Total Purchased Generation CO2e Emissions Intensity (MT/Net MWh) N/A 0.404 0.371
2018 • ENVIRONMENTAL, SOCIAL, GOVERNANCE, AND SUSTAINABILITY REPORT • CMS ENERGY & CONSUMERS ENERGY • 10
Baseline Last Year Current YearEMISSIONS (cont) 2005 2016 2017
Owned Generation + Purchased Power
Carbon Dioxide (CO2)
Total Owned + Purchased Generation CO2 Emissions (MT) 23,956,416 22,531,986 20,028,058
Total Owned + Purchased Generation CO2 Emissions Intensity (MT/Net MWh) 0.669 0.628 0.563
Carbon Dioxide Equivalent (CO2e)
Total Owned + Purchased Generation CO2e Emissions (MT) N/A 22,531,986 20,120,222
Total Owned + Purchased Generation CO2e Emissions Intensity (MT/Net MWh) N/A 0.628 0.566
Non-Generation CO2e Emissions
Fugitive CO2e emissions of sulfur hexafluoride (MT) N/A 1,767 1,756
Fugitive CO2e emissions from natural gas distribution (MT) N/A 116,103 101,645
Nitrogen Oxide (NOx), Sulfur Dioxide (SO2), Mercury (Hg)
Generation basis for calculation Fossil
Nitrogen Oxide (NOx)
Total NOx Emissions (MT) 29,105 4,945 4,029
Total NOx Emissions Intensity (MT/Net MWh) 1.19E-03 3.00E-04 2.50E-04
Sulfur Dioxide (SO2)
Total SO2 Emissions (MT) 85,020 17,026 5,226
Total SO2 Emissions Intensity (MT/Net MWh) 3.50E-03 1.04E-03 3.25E-04
Mercury (Hg)
Total Hg Emissions (kg) N/A 96 23
Total Hg Emissions Intensity (kg/Net MWh) N/A 5.503E-06 1.00E-06
Baseline Last Year Current YearRESOURCES 2005 2016 2017
Human Resources
Total Number of Employees 8,114 7,366 7,496
Total Number on Board of Directors/Trustees 12 12 10
Total Women on Board of Directors/Trustees 1 4 4
Total Minorities on Board of Directors/Trustees 1 2 2
Employee Safety Metrics
Recordable Incident Rate 7.01 0.88 0.75
Lost-time Case Rate 2.00 1.35 0.11
Days Away, Restricted, and Transfer (DART) Rate 3.22 0.50 0.40
Work-related Fatalities 1.00 0.00 0.00
Fresh Water Resources
Water Withdrawals - Consumptive (Billions of Liters/Net MWh) N/A 3.22E-07 2.94E-07
Water Withdrawals - Non-Consumptive (Billions of Liters/Net MWh) N/A 8.97E-05 7.61E-05
Waste Products
Amount of Hazardous Waste Manifested for Disposal N/A 32.7 52.1
Percent of Coal Combustion Products Beneficially Used N/A 12% 20%
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AGA VOLUNTARY SUSTAINABILITY METRICS:Quantitative Information
Disclaimer: All information below is being provided on a voluntary basis, and as such, companies may elect to include or exclude any of the topics outlined below and customize the template to their specific needs. The decision to include data for historical and future years is at the discretion of each company and the specific years (e.g., historical baseline) should be chosen as appropriate for each company.
© American Gas Association. All rights reserved.
Parent Company: CMS Energy
Operating Company(s): Consumers Energy
Business Type(s): Combined Gas and Electric
State(s) of Operation: Michigan
Regulatory Environment: Regulated
Report Date: Nov. 29, 2018
Note: Data from from operating companies is rolled up to the corporate level.
NATURAL GAS Current Year
DISTRIBUTION RESOURCES 2017
Methane Emissions And Mitigation from Distribution Mains
Number of Gas Distribution Customers 1,763,743
Distribution Mains in Service
Plastic (miles) 14,239.48
Cathodically Protected Steel - Bare & Coated (miles) 12,467.55
Unprotected Steel - Bare & Coated (miles) 502.59
Cast Iron / Wrought Iron - without upgrades (miles) 424.90
Plan/Commitment to Replace / Upgrade Remaining Miles In order to improve the safety and reliability of our natural gas system, of Distribution Mains (# years to complete) CE is investing nearly $2 billion to replace 2,600 miles of natural gas pipelines. Our Enhanced Infrastructure Replacement Program (EIRP) is a 25-year project, which began in 2012.
Unprotected Steel (Bare & Coated) (yrs to complete) 19 years remaining in program
Cast Iron / Wrought Iron (yrs to complete) 19 years remaining in program
Distribution CO2e Fugitive Emissions
CO2e Fugitive Methane Emissions from Gas Distribution Operations (metric tons) 232,636.50
Natural Gas Throughput from Gas Distribution Operations in thousands of scf 353,761,510.00
CO2e Fugitive Methane Emissions Rate (metric tons per thousands scf of Throughput) 0.000658401
Natural Gas Transmission and Storage
Transmission Pipelines, Blow Down Volumes, and Fugitive Emissions
Total Miles of Transmission Pipeline Operated by gas utility (miles) 2419.38
Volume of Transmission Pipeline Blow Down Emissions - outside storage and compression facilities: Below reporting threshold for Subpart W
scf natural gas Below reporting threshold for Subpart W
metric tons 2 Below reporting threshold for Subpart W
Underground Natural Gas Storage Emissions Below reporting threshold for Subpart W
Storage Facility Wellhead Component Fugitive Emissions (metric tons of CO2e) Below reporting threshold for Subpart W
Onshore Natural Gas Transmission Compression Emissions
Compressor Station Fugitive Emissions (metric tons CO2e) 770.15
(3 of 7 compressor stations are above Subpart W reporting threshold)
Co2e Emissions For Transmission, Compression, And Storage
CO2e Emissions for Transmission Pipelines (metric tons) Below reporting threshold for Subpart W
CO2e Emissions for Storage Facilities (metric tons) Below reporting threshold for Subpart W
CO2e Emissions for Transmission Compression Facilities (metric tons) 1819.24 (3 of 7 compressor stations are above Subpart W reporting threshold)
2018 • ENVIRONMENTAL, SOCIAL, GOVERNANCE, AND SUSTAINABILITY REPORT • CMS ENERGY & CONSUMERS ENERGY • 12
NATURAL GAS Current Year
DISTRIBUTION RESOURCES 2017
Conventional Air Emissions from Transmission, Compression, and Storage
Emissions reported for all permitted sources (minor or major) Includes all 7 compressor stations
NOx ( metric tons per year) 1415.21
VOC (metric tons per year) 84.37
Natural Gas Gathering and Boosting
Methane Emissions
Gathering and Boosting Pipelines, Blow Down Volumes, and Emissions NA
Total Miles of Gathering Pipeline Operated by gas utility (miles) NA
Volume of Gathering Pipeline Blow Down Emissions (scf) NA
Gathering Pipeline Blow-Down Emissions outside storage and compression facilities (metric tons CO2e) NA
Co2e Combustion Emissions for Gathering & Boosting Compression
CO2e Emissions for Gathering & Boosting Compression Stations (metric tons) NA
Conventional Combustion Emissions from Gathering & Boosting Compression
Emissions reported for all permitted sources (minor or major) NA
NOx ( metric tons per year) NA
VOC (metric tons per year) NA
This report contains “forward-looking statements” which may cause our results to differ materially. All forward-looking statements should be considered in the context of the risk and other factors detailed from time to time in CMS Energy’s and Consumers Energy’s Securities and Exchange Commission (“SEC”) filings. Forward-looking statements should be read in conjunction with “FORWARD-LOOKING STATEMENTS AND INFORMATION” and “RISK FACTORS” sections of our most recent Form 10-K and as updated in other reports we file with the SEC, which can be found on our Regulatory Filings page. CMS Energy and Consumers Energy have no obligation to update or revise forward-looking statements regardless of whether new information, future events, or any other factors affect the information contained in the statements.