Climate change and clean energy targets are an important part of a company’s environmental sustainability program. The good news is that more and more companies are recognizing this and setting goals.
Almost half of Fortune 500 companies (48 percent) have at least one climate change or clean-energy target on the books, an increase from years past. These findings and more comprise a joint report from the World Wildlife Fund, Calvert Investments, CDP and Ceres entitled Power Forward 3.0: How the largest US companies are capturing business value while addressing climate change.
The cohort of researchers insist emissions-reduction projects save money: Almost 80,000 projects employed by 190 companies netted almost $3.7 billion in savings last year alone. The annual emissions reductions from these projects equated to taking 45 coal-fired power plants offline for one year.
Both the largest and smallest Fortune 500 companies are leading the way. The Fortune 100, the largest companies in the index, continue to be the leaders: 63 percent of them have set one or more clean energy targets. Forty-four percent of the smallest 100 companies in the index have set goals in one or more categories, a 19 percent increase from 2014. Companies within the consumer staples sector have the largest amount of companies with targets, while the energy sector has the smallest amount.
Corporate goals are more ambitious than ever
One of the most significant new trends among the Fortune 500 is the increasing ambitiousness of the goals, with more companies moving to create science-based targets and set 100 renewable energy goals, the cohort representing NGOs and an investment body concluded.
As of January, 210 companies set targets through the Science Based Targets initiative, which galvanizes corporate goal-setting based on climate science. These leaders include American multinationals like Procter & Gamble, General Mills and Kellogg.
The Science Based Targets initiative is a collaboration between the WWF, CDP, World Resources Institute and the United Nations Global Compact, in partnership with the We Mean Business Coalition. For what it’s worth, 72 percent of the Fortune 500 (14 percent) reported to either CDP or the Science Based Targets initiative that they intend to adopt a decidedly science-based target within a few years.
For its part, consumer packaged goods giant P&G is committed to reducing the emissions from operations by 30 percent by 2020 from a 2010 base-year, according to a Science Based Targets case study. During this time frame, P&G will address the main source of emissions across its value chain, which include targets related to cold-water washing, post-consumer plastic use and zero-deforestation policies. Before setting the target, the company had already committed to sourcing 30 percent of its energy from renewables.
And P&G isn’t alone. Renewable energy is looking attractive to a growing number of companies. Almost two dozen Fortune 500s committed to power all of their corporate operations with 100 percent renewable energy, mainly wind and solar. Last year, only a handful of companies made such a commitment. Some of the companies pledged to 100 percent renewables are Walmart, Bank of America, Google and Facebook.
A goal to source only renewable energy is a “signal of high ambition,” the most recent joint report states. And company size is a “key indicator of the likelihood” of setting such a target: 14 of the targets come from companies in the Fortune 100, with four in the Fortune 101-200, three in the Fortune 201-300, and just two in the Fortune 301-400. There are no companies in the bottom quintile of the Fortune 500 with a 100 percent renewable energy target. All 23 companies with such a goal are in four sectors: information technology, financials, consumer staples, and health care.
While only a fraction of Fortune 500 companies have adopted such an ambitious goal, more than double the amount (53 companies) have set a target to buy or invest in renewables such as wind and solar. Companies are using various approaches to meet their targets, including unbundled renewable energy certificates (RECs) purchases, onsite installations (mainly solar), and larger-scale, off-site purchases. Since the Power Forward 2.0 report, 33 companies signed almost seven gigawatts (GW) in new, direct and off-site corporate renewable energy contracts, with most of them in the Fortune 500.
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