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December 31, 2012
Corporate giants trending to renewables

A number of the nation’s and the world’s largest companies are not waiting to be told by government to pursue renewable energy and GHG reduction and have set their own goals, some of which are substantial.  That’s the optimistic view taken in a new study jointly released by Ceres, Calvert Investments, and World Wildlife Fund.  According to the study, the majority of Fortune 100 companies have sent a renewable energy commitment, a GHG emissions reduction commitment, or both.  The trend is stronger internationally, according to the groups, with more than two-thirds of Fortune’s Global 100 having made the same commitments.

“In 2011, renewable energy investments reached a record high of $260 billion worldwide,” states the report.  “At the same time, renewable energy costs continue to decline, with dramatic gains over the past 20 years in wind and solar in particular.  Global renewable energy power generation is expected to continue to grow rapidly over the next 5 years, according to the International Energy Agency.”

Actions by sector

In the Fortune 100 group, the materials and telecommunications sectors have the highest share of companies that have set both GHG and renewable energy commitments, according to the report.  The industrial and financial sectors have the highest share of companies with GHG targets only.  The energy sector, followed by health care, lags in setting either a GHG or renewable energy target.

 Among the 23 companies that occupy both the Fortune 100 and Global Fortune 100, the report notes the following commitments:

  • AT&T—In 2012, add 5 megawatts (MW) of alternative energy from fuel cell and solar production against 2011 capacity baseline of 3,888 kilowatts (kW).
  • Caterpillar—Achieve 20 percent renewable energy by 2020.
  • DuPont—Reduce nonrenewable energy use by 10 percent by 2020 (relative to 2010 baseline).
  • General Motors—Utilize 125 MW of renewable energy by 2020 (globally), including a commitment to double solar power from 30 to 60 MW by 2015.
  • Hewlett-Packard—Achieve 8 percent renewable energy by 2012.
  • HSBC Holdings—Achieve 40 percent renewable energy by 2020.
  • Johnson & Johnson—Achieve 50 MW of renewable energy by 2015.
  • Walmart—Achieve 100 percent renewable energy (long-term goal).

RECs and PPAs

The report endorses the increasing preference of companies to sign renewable energy power purchase agreements (PPAs) over buying renewable energy credits (RECs).  Essentially, RECs are a year-to-year means of supporting renewable energy generated elsewhere.  PPAs are contracts to buy power over a negotiated period.  PPAs are not allowed in all locations, and the report notes that some companies are engaging policy makers to revise regulations to authorize their use.  The investigation found that more companies are pursuing a diversified approach to renewable energy that often includes a combination of RECs, PPAs, and on-site direct investment.

Specific commitments

Recommendations are offered to both companies and policy makers.  Companies are advised to set time-bound targets to increase their commitments to renewable energy and address the risk of climate change; be fully transparent in reporting their commitments; and identify opportunities to support local, state, and national policies that scale up renewable energy.  The report emphasizes the importance of the relief offered by the wind production tax credit (PTC) and urges all companies to engage in policy advocacy “because it helps increase availability of renewable energy and lower prices while bringing corporate commitments and public policy positions in line with one another.”

Regarding policy makers, the federal government should extend the PTC and other tax relief to “level the playing field with conventional energy sources”; state governments should authorize the use of third-party PPAs and remove policies that limit development of on-site renewable power generation; and the renewable portfolio standards now in force in 30 states should be adopted by all states.

Click here for information on the report.

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