A new report by the International Renewable Energy Agency (IRENA) shows businesses are increasingly switching to renewable energy at scale – but that greater and faster action is needed to help deliver on the Paris Agreement by 2050.
Corporate Sourcing of Renewables: Market and Industry Trends shows that more and more companies around the world are using, procuring, or investing in renewable energy. The report’s analysis of 2,410 businesses headquartered across 40 countries – using data provided by The Climate Group’s RE100 initiative with CDP – reveals that corporate sourcing of renewable electricity is widespread and dynamic, and across a variety of sectors.
But while this is a growing global trend, businesses still have a long way to go to take advantage of the huge investment opportunities on offer. IRENA’s report finds that although more than half of the companies analyzed source renewable electricity, only 17% have a specific target for their renewable energy in place.
Among these, 134 leading companies have committed to 100% renewable electricity through RE100, driving a movement that will inspire and enable the broader business community to follow their example. Together, they are increasing demand for renewable energy worldwide – accelerating market change.
Helen Clarkson, CEO, The Climate Group, explains: “The Climate Group is driving companies to raise their ambition and accelerate towards using and sourcing 100% renewable electricity. This is absolutely vital to achieve the Paris Agreement’s goal of a world of less than 2 degrees of warming. It is encouraging to see that corporate sourcing of renewable energy continues to be a growing global trend, and we will keep propelling this growth.”
The report comes as The Climate Group announces two new members of its RE100 initiative with CDP. The Crown Estate is a British real estate business specialising in commercial property as well as prime regional retail and offshore wind; aiming to source 100% renewable electricity for all its operations by 2022. Meanwhile, Johnan Shinkin Bank becomes the first financial institution to join RE100 from Japan; targeting for 100% by 2050.
As well as showcasing business commitments, RE100 demonstrates the business case, shares best practice, and supports companies to learn from each other throughout their transition to renewable energy – reporting annually on the progress being made.
Investment opportunities
To achieve a global energy transformation that can deliver on the Paris Agreement objectives, the IRENA report asserts the overall share of renewables in total electricity use would need to reach at least 85% by 2050. According to the current trajectory, corporate global demand for renewable energy corresponds to only 20% of the required renewable electricity demand in the commercial and industrial sectors in 2050.
Helen Clarkson adds: “There is a real urgency to step up ambition and accelerate the uptake of renewable energy. We can see from influential, global organizations like Microsoft, Google and Apple committing to 100% renewable electricity that this is possible – but businesses globally need to step up to this challenge. The Climate Group is here to help them achieve that, as well as progress on energy saving and electric transport.”
To further spur corporate action, The Climate Group is working with RE100 members, as part of the RE-Source platform, and with partner NGOs, to overcome policy barriers and promote better policy frameworks for corporate renewable energy sourcing. A recent RE100 report also guides businesses to increase the uptake of renewable energy in their supply chains.
IRENA’s recommended solutions include supporting an effective system for issuing and tracking energy attribute certificates, stimulating direct investment in corporate production of renewable energy for self-consumption, and working with utilities or electricity suppliers to provide corporate renewable procurement options.
Companies in the commercial and industrial sector account for two thirds of the world’s end-of-use of electricity, and they have a crucial role to play in driving a faster roll-out of renewable energy. The IRENA report may demonstrate a drastic need to increase the efforts of businesses globally, but it does present hope that it is possible too, through the strength of initiatives such as RE100.