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An increasing number of companies are making public commitments to power their operations with renewable energy, but convincing senior management that the investment is worth it can still be a difficult task. Evidence of improvements to ESG ratings and reputation make the task easier.
At the time of writing, ninety-six companies from around the world have joined RE100, an initiative of influential businesses committed to procuring 100% of their electricity from renewable energy sources. Ninety-six companies may not sound like many, but RE100 members are part of a much larger trend of private sector organisations mobilising around clean energy and setting green energy targets. And while setting a renewable electricity target may sound straight-forward, convincing internal decision-makers that doing so can add value to the business is a crucial yet underrated venture.
It’s no surprise that CFOs like to hear of opportunities to reduce or stabilise costs, so building a standard business case is an essential step. Data shows that since 2009, renewable energy prices have plummeted (by 65% for wind and 85% for solar), and in some areas of the world renewable energy has reached price parity with traditional fossil-fuels. More so, economists and energy analysts are projecting significant future reductions in renewable electricity prices.
Members of the Board or heads of communications or marketing departments will likely look for potential paybacks in terms of enhanced brand reputation or improved alignment with expectations from customers, clients or shareholders. By sourcing renewable energy and disclosing their achievements, companies can make a strong leadership statement while demonstrating their contribution to the global, multi-sectoral effort to reduce the volume of GHGs in the atmosphere.
VMware, a global leader in cloud infrastructure and business mobility, RE100 member and a client of Natural Capital Partners, has committed to sourcing 100% renewable energy for its global operations by 2020. Having pioneered virtualisation, VMware was at the forefront of enabling customers to reduce server requirements and avoid millions of tonnes of carbon emissions.
As an EPA Green Power Partner, member of the Renewable Energy Buyer’s Principles and at the CDP Leadership Level, VMware is focused on continuing to drive innovation and commitment to the transition to a low carbon economy. It has already achieved more than 71% renewable power through on-site solar, a PPA and the purchase of renewable energy certificates. “With our commitment to 100% renewable energy and carbon neutrality, we’re on the next stage of our journey towards delivering a net positive impact. Over the next three years we will progressively move our global operations to meet the renewable energy target and finance low carbon development projects to cover our remaining emissions,” said Nicola Acutt, Vice President, Sustainability Strategy at VMware.
Indeed, among all sustainability initiatives within an organisation, energy can be one of the most impactful on corporate performance and long-term brand equity as well as on achieving sustainability goals.
In addition, more and more investors are seeking out Environmental, Social and Governance (ESG) data across a range of issues to glean valuable investment insights, including measures of a company’s carbon emissions reductions, renewable energy sourcing, labour and human rights policies, and corporate governance structures. In fact, a 2017 report by EY shows that investors are seeing long-term financial benefits in companies with high ESG ratings.
There is increasing evidence that sourcing renewable energy can serve to boost a company’s competitive advantage as the global economy transitions to a low carbon paradigm.