by Shane Henson — December 17, 2012—According to a new report from Ceres, an advocate for sustainability leadership, the majority of the world’s largest businesses are making a concerted effort toward reducing their company’s environmental impact through using renewable energy and lowering emissions, ahead of consistent government action.
The report, Power Forward: Why the World’s Largest Companies are Investing in Renewable Energy, which Ceres produced in partnership with the World Wildlife Fund and Calvert Investments, shows that a majority of Fortune 100 companies have set a renewable energy commitment, a greenhouse gas (GHG) emissions reduction commitment or both. The trend is even stronger internationally, as more than two-thirds of Fortune’s Global 100 have set the same commitments, according to the report.
Ceres says that through two dozen interviews with Fortune and Global 100 executives and analysis of public disclosures, the report finds that clean energy practices are becoming standard procedures for some of the largest and most profitable companies in the world, including AT&T, DuPont, General Motors, HP, Sprint and Walmart. Among other key findings, the report shows that:
- An impressive 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 to longer-term investment strategies like power purchase agreements and on-site projects, indicating a long-term commitment to renewable energy and reaping the benefits of reduced price volatility.
The report notes that 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.
Ceres says 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 developing market-based solutions that put a price on the pollution from conventional energy generation.
