On a global basis the generation and use of energy is responsible for 40% of the greenhouse gas (GHG) emissions. For the global community to succeed in curbing GHG emissions, a rapid transition away from fossil-based generation to more renewable sources is the single most important objective.
Of the total electricity used on a global basis, 50 % is consumed by the corporate sector. Over the last decade, we have seen the corporate sector gradually stepping up to the challenge, and in 2014 this finally materialized into a strong and cohesive “renewable movement”. Businesses around the world seem to have tired of waiting for governments, and decided to act. Focus is on using less energy, reducing costs, and on switching from carbon emitting energy sources to clean and renewable sources.
Press and media have increasingly displayed an interest in bringing renewables to the front page. Beyond the very impressive and visible actions taken by multinationals like IKEA, Apple, Google, Mars, Lego and others, we also experience a much broader undercurrent of activities – where the starring roles are filled by companies from all industries, of all sizes, with local and international presence. This last year, for the first time, brought numerous leading corporates together – committing to ambitious renewable goals.
One very exciting example is RE100, an impressive initiative brought about by the Climate Group and CDP. Their target is to have 100 of the world’s largest companies commit to 100% renewable power use by 2020. Another example is the US-based initiative spearheaded by WWF and World Resource Institute (WRI) – the Corporate Renewable Energy Buyers Principle – so far bringing 19 multinationals together to demand improved ways of purchasing renewable energy.
Beyond the aspect of reducing energy costs, we see five clear reasons behind businesses engaging in renewables.
- Reduce corporate carbon footprint
- Improve sustainability reporting and CSR rating
- Strengthen competitive positioning – using storytelling and media interest
- Evaluate business opportunity & return on investment
- Secure hegding of future energy prices
Businesses can choose from a range of alternatives routes to engage in renewables. When making strategic choices to purchase green power, contracting renewables through a long term PPA (Power Purchase Agreement) or making direct investment in wind- or solar-parks. New concepts are under development in the market. One such is ECOHZ GO2 combining the purchase of renewable energy certificates with a top financing solution for new renewable energy projects.
Companies need to consider these alternatives with their need for flexibility, willingness to commit long-term, industrial capabilities, risk preferences and of course financial capability.
Corporations that are changing their energy behaviour are setting the standard for others to follow. Engaging the corporate sector will accelerate the change we need to see. It is one of the most critical issues on the broad climate change agenda.