Sustainability experts and business leaders discuss the challenges and opportunities of committing to renewable energy targets.

Pressure is growing on businesses to become more sustainable, thanks to initiatives such as the Paris Agreement on

climate change, national and local targets to cut carbon emissions, and more environmentally-conscious consumers.

A number of the world’s biggest companies, such as Ikea, Mars and Tesco, have committed to work towards using 100pc renewable electricity in their operations as part of the RE100 initiative, meaning that all of their power comes from sources such as wind, solar or hydroelectric power, which have no carbon dioxide emissions.

Google, one of the earliest adopters of a 100pc renewable

commitment in 2012, recently announced that it had achieved its goal, having become the world's largest corporate buyer of renewable power, with commitments reaching 2.6GW of wind and solar energy.

The benefits of setting targets

Ian Kelly, manager of product development at the US-based

Business Renewables Center, says that big firms signing up to long-term clean energy power purchase agreements (PPAs) – where companies agree to buy electricity direct from renewable energy projects – help to grow the renewable energy market, because project developers can use these commitments to raise money to build projects.

They're also signing up for PPAs because it’s very difficult for the largest companies to generate all the electricity that they need on site.

Most of a firm's impacts occur in the supply chain Graham Sprigg, IMS Consulting

The Science Based Targets initiative encourages companies to set emissions reduction targets in line with the

actions that climate scientists say are needed to keep average temperature rises below 2C. BT, for example, has set a target to cut carbon emissions by 87pc by 2030 as part of its Science Based Target.

It sees clear business benefits from doing so. “The benefits extend to our customers, suppliers and people,” says the company's chief sustainability officer, Niall Dunne. “Our commitment to this target will create partnerships and coalitions that continue the momentum enabled by the Paris Agreement.”

How to stick to them

While clean energy projects grab headlines, they should be the last port of call, rather than the first, explains Jane Goodman, an energy and sustainability engineer at the consultancy, BSD.

“The first step is to reduce energy consumption and make your operations more energy efficient,” she says. “Then you should look at using fossil fuels more efficiently, by using technologies such as combined heat and power facilities, and heat pumps. Once you've done that, you should look at renewables.”

For companies that don’t own their own premises, none of these may be an option. But new regulations mean that from April 2018, all commercial properties must have an Energy Performance Certificate rating of E or higher, points out Chris Evans, deputy managing director of engineering consultancy, Rolton Group.

For many big companies, dealing with carbon emissions within their own operations is just the first step, says Graham Sprigg, chief executive of sustainability consultancy, IMS Consulting.

“Many companies are coming to realise that most of their impacts occur in the supply chain, so they're putting pressure on their suppliers to take actions to reduce their [own] impacts. The more that suppliers understand their own emissions, the more attractive they are to the end customer,” he says.

As a B Corp-certified company, not using renewable energy wasn’t an option Richard Pike, Cook Food

Frozen food manufacturer, Cook Food, wanted to go renewable, but found it difficult to know what its options were.

“As a B Corp-certified company [dedicated to social and environmental issues], not using renewable energy wasn’t an option,” says Richard Pike, technical and sustainability director.

“But the different interpretations of ‘renewable’ saw some brokers unable to advise us on the different sources of renewable energy,” he adds. “The onus has been on us to make sure that our energy is sourced responsibly.”

The company eventually signed up with Squeaky Energy, a company that enables businesses to buy directly from renewable energy projects. “Initially, we expected to pay up to 15pc more, but there's no premium for completely transparent and clean renewable energy,” says Mr Pike.

Looking ahead

While many companies want a greener supply chain for sustainability reasons, some are considering generating their own green power, simply because it’s a good business decision.

“It’s getting to the point where it makes economic sense,

particularly if you can be a bit more sophisticated, adding in energy storage assets and selling power back to the grid at peak times,” explains Keric Morris, a partner in the energy practice of consultants, Oliver Wyman. “The pricing mechanisms are not quite there yet, but it does feel like we’re at a tipping point.”

In the short term, there are still bottlenecks, such as with the transmission and distribution system, “but significant investment is going into solving this problem,” says BSD’s Ms Goodman.

Greening your energy supply “is about where a business wants to

go in terms of its sustainability credentials,” adds director of business services at Good Energy, Randall Bowen.

The world is moving towards electricity, he thinks. “Just look at the recent announcements about electric vehicles from both car companies and governments – and the cost of renewables is falling so quickly that it’s hard to see the disadvantages.”