We recognize that material issues can directly or indirectly impact AEP’s ability to create long-term value for its customers, employees, investors and society at large. Sustainability considers a broader scope of action and issues in determining what is material compared with the origins of materiality in the auditing and accounting processes of financial reporting. That is one reason our approach to integrated reporting seeks to emphasize connections between financial and nonfinancial performance and to demonstrate a high degree of transparency.
AEP views material issues to be those that have affected, or are reasonably likely to affect, the company’s reputation, liquidity, credit standing, capital resources or operational results. These issues also take into account the concerns and interest of our many stakeholders.
AEP conducted a materiality assessment in 2012 during which we identified 18 material issues for AEP. In 2013, the electric utility industry conducted an industry-wide materiality assessment that identified 15 material issues. It was conducted by the Electric Power Research Institute’s Energy Sustainability Interest Group, of which AEP is a member. The industry-wide materiality assessment will be refreshed in 2016.
We check the relevance of our material issues through discussions with our Enterprise Sustainability Council, meetings and discussions with our stakeholders and by reviewing the company’s risk reports to seek alignment. Some issues have risen to the top while others have become lower priorities but overall, the two assessments continue to line up with the material issues most relevant to AEP and its stakeholders.