The RE100: what are major companies doing to support the renewable energy transition?
Posted by Gabby Mallett on 8 October 2019 at 10:12 am
The signing of the Paris Climate Agreement in 2015 finally marked the beginning of concerted international efforts to address the climate crisis. With progress slowly inching forward at the political level, some major companies have begun making significant commitments to renewable energy.
For many companies, choosing to source their energy from renewables can significantly reduce their carbon footprint. Today, 31% of global greenhouse gases are emitted during the production of heat and electricity and, in the UK, energy supply is responsible for 27% of domestic emissions. Focusing on energy production is therefore a key priority for companies who are looking to reduce their environmental impact. For this reason, many are choosing to join the RE100.
The RE100 is an initiative setup by NGOs The Climate Group and CDP. It aims to encourage major companies to commit to sourcing 100% renewable energy. Launched in 2014, it really took off after the Paris Agreement as companies, looking for a way to demonstrate their support for the principles outlined in Paris, flocked under the RE100 banner. Four years on, over 155 major companies have now joined including Apple, Microsoft, IKEA, HSBC, Mars, Anheuser-Busch InBev and General-Motors, to name only a few.
What is motivating companies to make these commitments? In a survey conducted by the RE100, 95% cited the need to manage greenhouse gas emissions, 95% cited corporate social responsibility and 80% cited the economics of renewables as key considerations.
According to Simon Boas Hoffmeyer, Sustainability Director for Carlsberg, “To achieve bold decarbonisation targets globally, we believe business must step up and help lead the change. This means companies need to reduce their own carbon emissions in line with the levels required to achieve the more ambitious goals set forth in the Paris Agreement.”
It is promising to see companies showing leadership and recognising the responsibility they hold in the fight against climate change. The combined GDP of all RE100 members is 4.5 trillion US dollars, equivalent to 5% of Global GDP. The enormous global reach and financial clout of these companies, when brought to bear on the energy market, will be transformative and help to rapidly proliferate renewables.
Take, for example, supply chains. Many RE100 members depend on long supply chains that include many different countries. In some of these countries, the renewable energy sector is not nearly as developed as it is in Europe and coal is often the most common source of energy production. The commitments made under the RE100 require that companies source 100% renewable energy globally. This means that they must find solutions to source renewables in countries where this is still very challenging. In doing so, they will help develop the renewable energy market there. In 2018, for example, Apple announced they will invest nearly US$300 million in their Supplier Clean Energy Programme in China, which aims to support more of their clients to switch to clean energy.
Promoting the renewable energy transition does not end at simply buying renewable energy, however. Companies like TetraPak, SAP and VMware have chosen to go a step further and buy EKOenergy ecolabelled energy. EKOenergy is a non-profit initiative that maintains strict environmental sustainability criteria which power plants must meet. Companies that consume this ecolabelled energy contribute to solar energy projects in developing countries, helping to fight energy poverty and develop renewable energy solutions in areas where it is needed most. This is just one example of the many additional measures that companies can make to support the renewable energy transition.
If we are to achieve the goals set out in the Paris Agreement, commitment and leadership needs to come from companies as much as it needs to come from governments. Keeping the increase in global average temperatures to below 1.5°C will require a rapid transformation in our global economy over the next 10 years. This cannot be done without everyone making strong commitments: individuals, companies and governments.
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