Clean energy investment opportunities worth trillions of U.S. dollars are up for grabs by the private sector, new analysis by We Mean Business shows.
The ‘What Paris means for business’ briefing and ‘Z-card’ identify key policies coming out of the COP21 climate negotiations in December, and explains what businesses can expect as the economy undergoes a deep transformation, including:
- New and expanded market opportunities
- Opportunities to align investment decisions to long-term policy certainty
- Benefits from policy coherence across borders and into new markets
- Increased investor confidence in managing climate risks
The analysis comes ahead of the signing of the Paris Agreement by more than 150 countries later this week.
Major economies are committing to restructuring their energy systems. Collectively, national climate plans under the Paris Agreement represent at least a US$13.5 trillion market for the energy sector alone in energy efficiency and low-carbon technologies through 2030.
Edward Cameron, Head of Policy for We Mean Business called the Paris Agreement “an unprecedented international agreement and a defining moment for the global market.” He said: “Trillions of dollars of market opportunity await businesses with the foresight to lead across their entire value chains.”
Mark Kenber, CEO of The Climate Group said: “Businesses have a fundamental role to play in delivering a low carbon economy, and the Paris Agreement is giving them the confidence to go further and faster in their efforts.”
Business action
Since the historic climate change agreement was reached in December, five major companies from a variety of sectors have joined RE100 to transition their global operations to 100% renewable power, taking the total number of committed world leading companies to 58, with dozens more in the pipeline.
The first to join RE100 after COP21 was Tata Motors, India’s largest automobile manufacturer. During the financial year 2014-15 the company saved over 32,000 tons of CO2e, through investments in wind and solar power.
Next was the financial software, data and media company Bloomberg, investing in wind and solar power and intending to dramatically increase the proportion of its electricity sourced from renewables to 100% by 2025.
British media giant Sky also joined the campaign in recent weeks, setting a 2020 goal for using 100% renewable electricity. The company already buys 100% renewable electricity from the grid in the UK and Ireland.
US-based ICT company, HP, joined with an interim target to source 40% of its electricity from renewables by 2020, partly through onsite solar power and Power Purchase Agreements (PPAs).
And the French banking group Crédit Agricole joined RE100 most recently, on track to go ‘100% renewable’ this year. The company renegotiated its contracts with EDF – a move expected to save at least 6,500 tonnes of CO2 per year and around €9 million over the next three years.
Commenting on the business case for switching to renewable power, Michael Terrell, Head of Energy Policy at Google, said: “Companies are making big bets in clean energy to fight climate change and because it makes business sense. At Google, we have committed to purchase over 2 gigawatts of renewable energy and are the largest non-utility renewable energy purchaser in the world. We believe we can tackle climate change in a way that will spur innovation and growth and benefit us all.”
Steve Howard, Chief Sustainability Officer, Ikea Group, said: “Everyone, including policymakers, business and civil society, needs to work together in delivering actions and solutions that facilitate a rapid transition to a low carbon economy. At IKEA, we are committed to do our part. We will continue to invest in renewable energy and to transform our business. By 2020, we will produce as much renewable energy as the energy we consume in our own operations.”
Clean Power Plan
In a further show of support for the Paris Climate Agreement, over 100 business giants have called for swift action on the U.S. Environmental Protection Agency’s Clean Power Plan and investment in the low carbon economy at home and abroad.
The companies, including RE100 members Autodesk, Biogen, HP, IKEA, Johnson & Johnson, Kingspan, Mars, Nestlé, Nike, Philips, Salesforce, Starbucks and Unilever released a statement pledging to do their part to “realize [the Paris Climate Agreement’s] vision of a global economy that limits global temperature rise to well below two degrees Celsius.” They also called on U.S. leaders for an investment in the low-carbon economy at home and abroad to give financial decision-makers clarity and to boost investors’ confidence worldwide.
Barry Parkin, Chief Sustainability Officer, at Mars said: “We are hopeful that continued leadership and progress by the business community will encourage the U.S. to follow through on its COP21 commitment and to successfully implement the Clean Power Plan."