Acknowledgements: We acknowledge AEP's staff for their help in providing raw material and editorial help for this paper: Joe Buonaiuto, Bruce Braine, Lonni Dieck, Dale Heydlauff, Mark McCullough, Rich Munczinski, Sandra Nessing, Melissa Tominack, Dennis Welch, and Chuck Zebula.
Integrated Reporting, Stakeholder Engagement, and Balanced Investing at American Electric Power
Article first published online: 19 JUL 2012
Copyright © 2012 Morgan Stanley
Journal of Applied Corporate Finance
Volume 24, Issue 2, pages 27–37, Spring 2012
How to Cite
Parrot, K. W. and Tierney, B. X. (2012), Integrated Reporting, Stakeholder Engagement, and Balanced Investing at American Electric Power. Journal of Applied Corporate Finance, 24: 27–37. doi: 10.1111/j.1745-6622.2012.00375.x
- Issue published online: 19 JUL 2012
- Article first published online: 19 JUL 2012
The policies and practices of American Electric Power (AEP) encompass a number of paradoxes in the domain of sustainability. AEP is a large electric power provider with a predominantly coal-fired power generation portfolio, which puts the company squarely in the center of national debates about global climate change and national air quality. At the same time, AEP is also a leader on several social and environmental fronts: integrated reporting, stakeholder engagement, technology innovation, and policy solutions for climate change.
In this article, the authors describe AEP's rationale for providing leadership in these areas and then explore how the company tries to balance stakeholder interests and financial, environmental, and social concerns in its capital investment decisions. Using these examples, the authors expand on and discuss the limitations of Michael Jensen's theory of “enlightened value maximization.”