The world’s most influential companies are actively engaging with policy makers and utilities to accelerate the transition to renewable energy, a new RE100 report finds today (December 2) – but governments must now remove the remaining barriers.
Going 100% renewable: how companies are demanding a faster market response is the 2019 RE100 Progress and Insights Annual Report from international non-profit The Climate Group in partnership with CDP. It tracks the progress of more than 200 member companies toward 100% renewable electricity.
The report reveals that although members are increasingly opting for cost-effective sourcing methods that directly bring additional renewable energy capacity online, unfavorable policy and market structures are inflating prices and making it harder to switch in places such as China and Russia.
The good news is that half of members (49%) are planning to partner with and influence stakeholders (such as governments and energy companies) by the end of next year, to help create markets for renewables. Such efforts are already bringing about policy changes in the Republic of Korea and the Taiwanese market, where to date access has been difficult.
This week policy makers are gathering at the UN Climate Change conference (COP25) in Madrid, Spain, to discuss how to bring ambition in line with the objectives of the Paris Agreement. Analysis released last week by the UN Environment Programme showed on current unconditional pledges, the world is heading for a dangerous temperature rise of 3.2˚C.
Helen Clarkson, CEO, The Climate Group, said: “At a time when UN research has said countries are underdelivering on climate action, leading businesses are stepping into the void left by national governments and accelerating the clean energy transition.
“With ten years left to halve greenhouse gas emissions, it is vital that governments respond faster to rising demand for renewable energy. Without decisive action, countries and the energy sector risk losing out on billions of US dollars in investment from RE100 companies.”
Paul Simpson, CEO, CDP, said: “Corporate demand for renewable power is rapidly growing as the world moves to address the climate emergency. Encouragingly, we see renewable energy increasingly becoming a matter of business competitiveness in numerous markets around the world.
“Many companies are now making the shift because it makes business sense – in part due to changing expectations from their key stakeholders – be that investors, customers or employees. Now is the time to meet the demand and speed up the clean energy transition”.
Ambition and progress
Three in four companies are targeting 100% renewable electricity by 2030 by the latest. More than 30 companies have already reached 100% renewable electricity, and four members have surpassed ambitious interim targets.
Signify was already sourcing 89% renewable electricity in 2018, and is now addressing more challenging geographies. In 2019, the company signed a 10-year virtual power purchase agreement (PPA) in Poland, overcoming challenges around cost, regulatory uncertainty and double-counting.
Robbert Slooten, Global Sustainability Program Manager, Signify, said: “Developers should be aware that energy off-takers are willing to commit – until then it’s a chicken and egg situation.”
Storage and information management services company Iron Mountain made significant progress on renewable electricity (+39%) in 2018, thanks to new PPAs with large scale renewable energy projects.
Kevin Hagen, Vice President of Environment, Social, Governance Strategy, Iron Mountain, said, “A secret ingredient to making progress fast has been external collaboration. Working with peers, NGOs, utility companies and even our competitors has helped us go further and faster than we could have by ourselves.”
Philips increased its global renewable electricity share from 79% in 2017 to 90% in 2018, and benefits include improved internal efficiency.
Robert Metzke, Global Head Sustainability and Chief of Staff Innovation & Strategy, Philips, said, “Switching to 100% renewable electricity drives lateral thinking, combining many people from different disciplines around a common goal.”
Over a quarter of the renewable electricity sourced by members in 2018 was through direct methods that add renewable electricity capacity to local grids. PPAs accounted for 19%, and self-generation 4%. Two thirds (65%) of members are planning to adopt impactful procurement methods by the end of next year.
44% of members are already influencing their suppliers on renewable electricity (up from 36% the previous year).
Drivers for action
The vast majority of members are acting on the growing demands of their customers, shareholders and employees. 87% cite customer expectations as ‘important’ or ‘very important’, and 76% say the same of shareholder requests. Over 50% identified benefits in terms of employee satisfaction and staff retention.
The business case is still significant; 80% cite cost savings as an ‘important’ or ‘very important’ driver, and despite challenges in certain markets, one in two members have experienced cost savings.
Budweiser, part of Anheuser-Busch InBev (AB InBev), is committed to brewing its beers using 100% renewable electricity. To show consumers when this milestone is reached in each country, a new renewable electricity symbol is added to Budweiser packaging.
Ezgi Barcenas, Global VP, Sustainability, AB InBev, said, “Consumers, employees and investors are all looking for companies to step up with measurable commitments and drive impact in a meaningful way. […] We wanted to give consumers a choice.”
Adobe broke ground on its newest building in San Jose, California, in June 2019. During the planning phase, the company observed widespread interest in sustainability among employees, and decided to make the campus fossil fuel free – powered with renewable electricity only.
Vince Digneo, Sustainability Strategist, Adobe, comments, “The talent Adobe wishes to recruit and retain expects us to set meaningful climate goals and work to meet them. Our RE100 commitment is among the top goals for this.”
Also new today, becoming members of RE100, are:
- Global lifestyle brand Ralph Lauren Corporation (targeting 100% renewable electricity by 2025);
- Taiwanese health food manufacturer Grape King (100% by 2035);
- Japanese construction company Hazama Ando Corporation (100% by 2050);
- US toy company Radio Flyer (100% by 2020).
Halide Alagöz, Chief Supply Chain and Sustainability Officer, Ralph Lauren Corporation, said, “At Ralph Lauren we are integrating sustainability across every aspect of our business, and addressing our impact on the environment is a critical part of our journey. We have a responsibility, along with other businesses, to take action on the climate crisis. Joining RE100 with our commitment to power all globally owned and operated offices, distribution centers and stores with 100% renewable electricity by 2025 is an important step forward.”
Dr. Andrew Tseng, Chairman and CEO, Grape King, said, “We look forward to joining the growing community of over 200 RE100 companies to support each other in achieving global renewable energy goals. We hope to encourage other companies to join the RE100 initiative to help drive more demand in our market for renewable energy options.”
Robert Pasin, Chief Wagon Officer, Radio Flyer, said, “At Radio Flyer, we love the outdoors and want to preserve the environment for future generations of trike pedallers and wagoneers. That is why we are excited to join RE100 and set a target to achieve 100% renewable electricity across our global operations by 2020.”