Companies are becoming increasingly aware of the business case for renewables and joining RE100, thanks to the work of ShareAction. Here, Project Coordinator Liz Sowden blogs on the progress being made.
Companies account for about half the global electricity demand. This makes scaling up their use of renewable sources central to the transition to a low-carbon future.
The RE100 campaign - run by The Climate Group and CDP - recruits and brings together global businesses who are committed to using 100% renewable electricity in their global operations. The huge opportunities of the low-carbon transition make businesses well-placed to be leaders in this area, while benefitting from the long-term energy security and fixed costs provided by renewables. Nestlé is one of the 69 companies already part of RE100, and their newly commissioned windfarm in the Scottish borders will cover half of the company’s electricity needs across the UK and Ireland.
When hugely influential businesses collaborate to respond to the risk of climate change in this way, the results can be really exciting. Collectively, companies have a big influence on governments and the energy industry. If the corporate sector sends a strong, united message that the demand for renewable electricity is real and growing, the wider transition to renewables will benefit too.
The kind of large-scale and long-term demand that major companies can provide builds confidence and stimulates investment in the renewables market for new project development. Already, 2015 saw the fastest rate yet of new renewable energy sources being established, with particular growth in emerging economies.
When large influential businesses lead the way, it will become easier for smaller businesses and domestic users to switch to clean electricity sources, which, along with increased energy efficiency, is essential if we are to meet the Sustainable Development Goals. By joining RE100, companies are helping to create a tipping point for accelerating the low carbon economy.
So where does ShareAction fit in to this vision? Since 2015, ShareAction has been working in partnership with RE100 to raise awareness of the campaign with more publicly listed companies and encourage them to join. Last year we raised the issue of renewable electricity at 23 UK company AGMs, prompting further meetings and dialogue between the RE100 team and some major household name brands.
As a responsible investment charity, we know the influence investors can have on company priorities and behaviour. In December 2015, we launched the ShareAction RE100 institutional investor initiative, with founding members including Aviva Investors, ERAFP, and Strathclyde Pension Fund. The initiative coordinates large funds, asset managers and charitable trusts based in the UK, Australia, USA, France and Norway, with recent developments including investor-signed letters, which we have sent to selected FTSE100 companies.
The next phase of the project is to take the company engagement beyond the UK’s shores. We will be coordinating joint investor letters to publicly listed companies in Europe and the USA, with the aim of using the strong coordinated voice of investors to accelerate the global corporate move to renewable electricity. To date we have 25 investors involved in the project, with more than £350bn in assets under management, and we are actively recruiting more.
Change has to happen at multiple levels for the world to fix the climate thermostat. People who are worried about the future may feel powerless to speed up the widespread behaviour change that is needed now to slow down our impact on the environment. However, the money invested through our pensions on our behalf provides leverage to influence corporate behaviour for the good of us all.
As part of our work in this area with RE100 we launched an online activism tool so you can email your own pension fund, asking what they are doing about renewable electricity, and suggesting that they join the ShareAction investor engagement on RE100. If you have a pension (not limited to the UK but in the USA, Canada, Australia and many European countries), you can send your fund an email encouraging them to take part in this project.
Even if you don’t have a pension, you could get involved by becoming a ShareAction AGM activist and asking a company a question about RE100. This tactic really works: we were delighted by the recent announcement that leading pharmaceutical company AstraZeneca has joined RE100. The company was already considering a 100% target when Rebecca, a member of ShareAction’s AGM Army, posed a question at their annual shareholder meeting in April 2015, asking them to consider joining RE100. This helped to galvanise senior level interest in the issue, which supported subsequent meetings between AstraZeneca and RE100, and led to the company ultimately joining the campaign.
In further good news, following on from questions we posed at their 2015 and 2016 AGMs, British Land recently announced its membership of the RE100 campaign.
These moves show that while shareholder activism does not always deliver quick results, our sustained efforts can help to deliver the sustainable results that we all require. Working in partnership with RE100, we hope to be blogging about more leading companies going 100% renewable for their electricity in the near future.