No longer the plucky underdog, the growing renewables industry risks losing its license to operate unless it generates co-benefits. Mark Hillsdon reports on how RE100 members Google, Iron Mountain, Clif Bar, Chanel and Novo Nordisk are amplifying their impact
While an increasing number of businesses are committing to power their operations with 100% renewable energy, there is also a growing realisation that these pledges alone won’t speed the energy transition unless they lead to the creation of additional renewables capacity to displace fossil fuels.
Indeed industrial-scale renewable energy, from wind farms marching across landscapes, to solar arrays that can render huge swathes of land lifeless, can open companies up to reputational risk, and make them the focus of community opposition.
Amid the economic devastation wrought by the Covid-19 crisis, businesses are coming under increased pressure to increase the environmental and social co-benefits of their renewables procurement. Some are already directly boosting local grids ‒ previously dependent on fossil fuels ‒ with new green energy, while others are having indirect impacts by championing social inclusion or reducing the negative environmental impacts of large-scale renewable development.
If you’re inspiring others to act then you’re going to have an impact greater than your own operations
When Google announced it had eliminated its entire carbon legacy last month, the news made the headlines. But there was another story, too, about how the business is looking beyond its own emissions, with investment in renewable infrastructure that is set to have a significant social impact around the world.
Writing on the company website, CEO Sundar Pichai explained how Google is working with supply chain partners to create 5GW of new clean energy by 2030, which he expects to spur more than $5bn in clean energy investments, and create over 8,000 clean energy jobs.
The company is harnessing tech too, and expanding the free use of its Environmental Insights Explorer tool to help over 3,000 cities worldwide to track and reduce their building and transportation carbon emissions, and maximise their use of renewable energy.
According to Sam Kimmins, head of RE100 at the Climate Group, by reaching out beyond their own operations, companies can have an “amplification affect”. “If you’re inspiring others to act then you’re going to have an impact … greater than your own operations,” he said in an interview with The Ethical Corporation.
RE100 is a global initiative that brings together more than 260 of the world’s most influential companies, all of which have set a goal to source 100% of their global electricity from renewable sources by a specified year.
In September, as part of Climate Week NYC, the winners of the inaugural RE100 Leadership Awards were announced, recognising companies that had gone “above and beyond” in the transition to 100% renewable energy.
Among the winners was Novo Nordisk, which was named Most Collaborative Leader. In August, the pharmaceutical company achieved its target of running its own operations from renewable sources, and shifted its sights to its supply chain, where the majority of its emissions originate. Using the lessons learnt from embedding renewable power into its own business, Novo Nordisk is now working with 60,000 direct suppliers to help them move to 100% renewable power by 2030, and eliminate at least 300,000 tons of greenhouse gases from its supply chain.
We strive to ensure our actions are not the cause of negative side effects
It’s a move that is also integral to Novo Nordisk’s “Circular for Zero” strategy, which sets an ultimate ambition for the company to have zero environmental impact. As company CEO Lars Fruergaard Jørgensen says: “Achieving it requires that we look beyond our own organisation and collaborate across multiple sectors with suppliers to accelerate the transition to renewable power.”
Another award winner was information management company Iron Mountain, which shared the title Most Impactful Pioneer with Taiwanese semi-conductor manufacturer TSMC. The award recognises the best examples of a company bringing clean energy alternatives to areas previously dependent on fossil fuels.
In 2019, Iron Mountain built a 7.2MW roof-top solar system at its centre in New Jersey which, along with wind power, now meets all the site’s energy needs. The renewables are helping other businesses, too, and Iron Mountain has developed a Green Power Pass which enables co-located clients to recognise the power consumed at their data centres as their own Scope 2 emissions, and claim that volume as 100% renewable in their greenhouse gas reporting.
“When we're not talking about obvious added capacity, we have ‘additionality’ tests [which] we use when evaluating new projects,” Iron Mountain’s vice president of ESG, Kevin Hagen. told The Ethical Corporation. “Since we almost always contract for both the electricity and the ‘green’ attributes, we can help drive positive outcomes, especially pre-construction.
He added: “The grid is a pretty complicated market and is subjected to a lot of variables, and [we] strive to ensure that our actions add to the community good and are not the cause of cost-shifting or other negative side effects.”
RE100's Kimmins believes its members are conscious about avoiding the mistakes of the past so that renewable energy remains a “massive growth industry, not tomorrow’s bad bogeyman”. “Power generation at scale has the potential to be quite messy, and what we are seeing is that companies are really taking this on board and saying that we want to make this as sustainable as possible, not just for carbon emissions but also for the bottom-line community benefits.”
This isn’t just about generating power, there is a whole range of cross benefits
One RE100 member, Idaho-based bakery Clif Bar, is helping to “dispel the myth that solar panels create a barren landscape of nothing but shiny glass.”
The Idaho-based bakery has introduced a rich pollinator habitat under and around its five-acre solar array, where different areas of light and shade can benefit different plants and animals. There is also an educational trail around the site.
“This isn’t just about generating power, there is a whole range of cross benefits,” says Kimmins, something which is also true of the luxury company Chanel, which was voted Best Community Changemaker at the RE100 awards.
In March it launched its climate strategy Chanel Mission 1.5°, with a target of shifting to 100% renewable electricity across its own operations by 2025. A key principle of the strategy involves social inclusion and ensuring that clean and affordable energy is available to people who may otherwise be excluded.
Chanel has partnered with Sunrun, a leading residential solar energy provider, as part of a $35m investment to bring free solar energy to 30,000 residents in low-income Californian families, as well as access to new green jobs.
Andrea d’Avack, Chanel’s global chief sustainability officer said: “One of the harsh realities of climate change is that it hits disadvantaged communities the hardest. We could focus our efforts on our own operations only, but that isn’t enough to accelerate a meaningful shift to clean energy. And since we believe that the transition to a low-carbon economy should be inclusive, we want to invest in projects that can deliver both environmental and social benefits.
“Social benefits could mean many different things, depending on the context of the project: access to clean energy for people or organisations who would not otherwise have access, job-creation and training, or energy cost savings for the local community.” Chanel is now looking to replicate similar projects in other parts of the world.
Energy is no longer just another commodity but an integral part of these companies' identify
Allowing a community to share in renewable energy and benefit from low costs can have a dramatic effect on a company’s reputation, says Kimmins. “It gives them a social licence to operate.”
He believes there has been a shift in the way in which companies are interacting with energy and that it is no longer just another out-sourced commodity but “an integral part of their identify, their outreach and their place in community".
“Companies are taking control,” he says, directly sourcing green energy or even owning their own green power stations. “Renewable energy is no longer the plucky underdog – it's in the transition phase, and is becoming a dominant force.” And with that power, comes responsibility.
This article is part of the October issue of The Ethical Corporation, on the future of work. To download the digital pdf for free click on the cover below.