Interview with Head of Sustainability, Environment, Health & Safety Nicola Kimm in Philips Lighting on their recent purchase of I-RECs in the Gulf region

Today Philips Lighting announced that it completed the first corporate International Renewable Certificates (I-RECs) transaction in the Gulf region. Why is switching to renewable energy important to Philips Lighting? Nicola: Through our sustainable operations we aim to contribute to our company purpose and our sustainability program “Brighter Lives, Better World”. This is an ambition to create brighter lives with quality light that improves people’s wellbeing, safety and productivity. We are accelerating the shift to energy efficient LED and connected lighting systems that help to create a better world where customers can reduce their electricity use by up to 80 percent. Our target is to be carbon neutral by 2020, and use only electricity from renewable energy sources in the same year.

Can you explain what I-RECs are and how they work? Tom: To document and report that the energy you consume outside of Europe and North America comes from renewable energy sources you can buy International RECs (I-RECs). I-REC is a global standard for documenting renewable energy consumption in regions where no similar documentation scheme exists. It is an effective and recognised tool to document your reduced greenhouse gas emissions and improve your sustainability rating. Each I-REC represents proof that 1 MWh of renewable energy has been produced. The I-REC registry, electronically issues I-RECs based on renewable energy generators’ output. Today I-REC is available in selected markets in Asia, Latin America and Africa.

The corporate demand for renewable energy is increasing. What trends do you see?

Tom: It is important to understand where the demand is coming from. Much of the demand is driven by an increased sense of urgency among leading international businesses in contributing to combating climate change.

This global backdrop has inspired leading companies across various industries to take charge of their destiny. This is why we see so many companies clearly defining their sustainability agendas, and purchasing renewable energy solutions that help them reach their goals. In this way, Philips Lighting is part of a renewable energy tsunami that has arrived. And their decision can directly or indirectly influence the governments. In short, when companies like Philips Lighting increasingly document renewable energy consumption with I-RECs, this behaviour can influence access to renewable energy in the future.

There are many tools that help companies meet their demand for renewable energy. Why did Philips Lighting choose I-RECs in the Gulf region? How is it helping you meet your sustainability and renewable energy targets?

Nicola: Since I-RECs in the Gulf region are issued by a local issuer that has full overview of local regulations, Philips Lighting can be sure that no double counting is taking place. Also, we need a flexible solution, and using I-RECs means that Philips Lighting can easily expand or adjust the agreement according to our operations in the Gulf region. Ultimately, I-RECs are an efficient way of meeting our sustainability and renewable energy targets.

What would be your advice to a company of a similar size that wants to increasingly use renewable energy?

Tom: Since companies similar in size to Philips Lighting often have operations in several locations and geographies, the biggest challenge is coordinating the purchase of renewable energy across all properties and operations.

To make this easier, I recommend that the companies look at their operations and map those up against the various renewable energy alternatives in the different markets. If they know exactly how much energy they consume in a specific region or country, they can then consolidate their purchases for each market, giving them more buying power and reducing the number of transactions necessary to achieve their goals. By talking to experts, who map out the alternatives, they can together find solutions best suited for the company’s global operations.

I always recommend starting with reducing your consumption, then documenting that you use renewable energy and, finally, helping contribute to the production of renewable energy with a solution like GO2. And start today!