WWF Report Shows World’s Largest Companies Turning to Renewable Energy
60 percent of the world’s biggest companies have greenhouse gas reductions or renewable energy commitments, according to WWF’s recent report Power Forward: Why the World’s Largest Companies Are Investing in Renewable Energy. These include AT&T, General Motors, Procter & Gamble, Dow Chemical, Google, HSBC, and other recognized brands. The report, prepared by David Gardiner & Associates (DGA), is a collaboration of the World Wildlife Fund (WWF) with Calvert Investments and Ceres.
The Power Forward report comes in time with the World Future Energy Summit taking place in Abu Dhabi this month, where discussions will center on renewable energy.
Clean energy practices are becoming standard procedures for several of the largest and most profitable companies in the world. This is the key finding of the report and reflects a willingness to embrace renewable energy as well as lowering emissions, without waiting for political will from governments. WWF Global Climate and Energy Initiative Head Samantha Smith said in a WWF article that “Nearly two-thirds of the largest global companies have committed to reduce emissions and increase their use of renewable energy. It’s more obvious than ever that businesses recognize that clean energy makes good business sense.” According to the report, this is due to increasing recognition of renewable energy’s benefits: reduction of long-term operating costs, diversification of energy supply, and protection against market volatility in traditional fuel markets. Key findings from the report include:
- 102 companies from the combined 171 companies in the Fortune 100 and Global 100 have set GHG reduction goals (60 percent).
- Of those, 24 companies have set specific goals for renewable energy use (14 percent), with others using renewable energy to meet their GHG goals.
- Many companies are shifting from purchasing short-term, temporary Renewable Energy Credits (RECs) to longer-term investment strategies like Power Purchase Agreements (PPAs) and on-site projects, indicating a long-term commitment to renewable energy and reaping the benefits of reduced price volatility.
In Fortune 100, the Materials and Telecommunications rose among corporate targets sector as having the highest share with set GHG as well as renewable energy commitments. The Industrials and Financials sectors was shown to have the highest share with only GHG targets, while the Energy and Health Care sectors plods behind with either commitments.
Consumer Discretionary, Materials, and Consumer Staples sectors led the majority of Global 100 utilities companies which have set GHG targets. Again, Energy and Healthcare sectors along with Industrials lagged behind in commitments.
The report credits the increasing global transition to a lower carbon economy to growing public concern about climate change. Aside from meeting climate commitments, companies which work to shift toward clean energy stand to profit by diversifying energy sources and investing in renewable energy. However, the report cited principle barriers that might slow down companies from corporate renewable energy purchasing. These are:
1. A desire by most companies to purchase renewable energy at cost parity or better, which differs across geographies;
2. Internal competition for capital funding that must otherwise drive top-line growth; and
3. Short-term, inconsistent policies that hinder companies from setting and meeting renewable energy commitments, particularly, unstable renewable energy support and an inability for companies to sign PPAs.
- WWF Power Forward Report
Developing innovative solutions to overcome these barriers are essential to meeting sustainability commitments and profit from investment in renewable energy. The rising global shift to renewable energy gives companies the opportunity to demonstrate leadership on corporate sustainability and climate change commitments.
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