As a new RE100 report shows an ever-growing number of leading multinationals are progressing towards 100% renewable electricity goals, Paul Simpson, CEO, CDP – which partners with The Climate Group on RE100 – blogs on the mainstreaming of renewables.
2017 was a stellar year for climate action. Despite a climate-sceptic administration in the US, I’m continually inspired to see that other national governments, cities, states and businesses from around the world have taken huge steps to reduce their carbon emissions.
And nowhere more so than in their commitment to renewable power.
This week sees the launch of the latest RE100 progress report, showing how more companies than ever are going 100% renewable, increasingly driven by economic benefits.
CDP is a founding partner of RE100, together with The Climate Group, and the global platform for environmental disclosure, insight and action for investors, companies, cities, states and regions. RE100 is one of the key corporate leadership initiatives promoted by We Mean Business.
Today, awareness, disclosure and management of environmental risk is mainstreaming around the world. In 2017, more than 6,300 companies with some 55% of global market capitalization disclosed environmental data through CDP, at the request of over 800 investors with combined assets of US$100 trillion.
We believe insight is crucial to environmental action. And RE100 is a great example of this in practice. Our team helps companies reduce their reliance on fossil fuels and transition to renewable electricity, through knowledge-sharing, reporting and data insights. We guide the business world to build clean energy into their strategic planning and implement this on the ground.
CDP’s 2017 climate analysis found that since 2016, there’s been a 23% jump in companies with renewable electricity consumption targets, and a 36% surge in those with targets to generate their own renewable power.
In my view, progress has been more than impressive: the latest data shows that RE100 members, who together use as much power as Poland, are sourcing 32% of their electricity from renewables with a clear commitment to get to 100% as soon as possible.
We’re seeing some companies storming ahead: Including recent announcements from Google, Wells Fargo and the LEGO Group, 28 members now run entirely on renewable power. In 2016, we saw Autodesk, Elopak, Interface, Marks & Spencer and Sky join companies like Microsoft and Starbucks in meeting their 100% goal.
With new commitments from Danone, Reckitt Benckiser Group, and Hatsun Agro Products Ltd, RE100 now brings together 122 of the world’s pioneering companies, including many of CDP’s A Listers, that have pledged to source 100% of their global electricity use from renewables. And membership is growing fast: by an average two major corporations per month.
Going green makes business sense
The new RE100 report shows that almost all RE100 members are motivated by the need to slash their greenhouse gas emissions; 88% of companies responding to our survey say they are also motivated by the economics of renewable energy.
Procuring renewable electricity is one of the most effective ways to cut emissions. And 41% of respondents – including retailer H&M – report that switching to renewable electricity has already led to savings on their energy bills.
One of the most impressive examples is from Telefonica. It has forecast that switching to renewable power will save 6% of its operational costs by 2020 – and up to 26% by 2030. Meanwhile, companies from Google and Microsoft to Infosys all say that renewable electricity provides better cost stability.
This is perhaps of little surprise when we consider the World Economic Forum’s finding that unsubsidized renewables were the cheapest source of electricity in 30 countries last year, or that IRENA has estimated renewables will be consistently cheaper than fossil fuels by 2020.
And as costs continue to plummet, we’re seeing companies find huge economic opportunities from going green. Not only for the businesses themselves, but renewable energy companies and national governments too; for example, Solar City estimates that Walmart’s commitment to solar created 9,000 construction jobs in the US.
Collective action to transform the economy
It’s clear to see that progress made by RE100 members shows just how quickly the sustainable revolution can happen; driving both emissions reductions and contributing to economic development.
Operating in 122 countries, RE100 companies have a global reach with rapid uptake of renewables being seen in emerging economies, such as India and China, where corporate giants like Infosys and Tata Motors are leading the charge.
On top of this, some 38% of RE100 companies are now ‘going beyond’ their own operations to work with suppliers to drive the uptake of renewable electricity through their supply chain. Where they lead, others will follow.
They are rewriting the rulebook for renewable energy purchasing and supercharging the renewable energy market: whether directly installing capacity, signing power purchase agreements or buying renewable energy certificates.
Ramping up the transition in 2018
CDP holds the most comprehensive set of self-reported corporate, city, state and region climate data globally. We’re seeing a global shift in how the world is being powered. RE100 sets the baseline for corporate action on energy, and will continue to guide the global economy’s most high-impact companies in years to come.
These companies prove that sustainability is compatible with healthy bottom lines today, while being essential for future business security. Our hope is that these companies will inspire governments and the broader business community to follow their lead.
Now, it’s time to tip the balance and make 100% renewable the new normal. Here at CDP, we believe this starts with disclosure and will ultimately end with a net zero carbon power grid.