Environmental Research Digest – December 2012
Ceres analysed the level of renewable energy and greenhouse gas emissions reduction commitment in Fortune and Global 100 companies. By interviewing executives and examining public disclosures, the report, “Power Forward: Why the World’s Largest Companies are Investing in Renewable Energy,” determined patterns and trends in clean energy practices.
- Clean energy practices are becoming standard procedures for some of the largest and most profitable companies in the world.
- 96 companies from the combined 173 companies in the Fortune 100 and Global 100 have set GHG reduction goals (56 percent).
- Of those, 23 companies have set specific goals for renewable energy use (13 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.
- Despite tremendous progress, some companies have yet to set goals, and those that have still face several challenges to accelerating their use of renewable energy.
- Companies identified the following key barriers: the fact that in some regions renewable energy is not yet at cost-parity with subsidized fossil-based energy; internal competition for capital; and inconsistent policies that send mixed signals to companies and investors in renewable energy projects, particularly instability in renewable energy incentives and policies that prevent companies from signing green power purchase agreements.
- The report offers several recommendations for U.S. policymakers, including promoting tax credits or other incentives that level the cost playing field for renewable energy, particularly, extending the Production Tax Credit for wind energy this year; establishing Renewable Portfolio Standards in states that do not have them; removing policy hurdles in states that prevent companies from contracting to buy the cheapest renewable power available and building on-site renewable power generation; and market-based solutions that put a price on the pollution from conventional energy generation.