Special Report: Power Forward 2.0

Clean energy has entered the mainstream at the world’s largest corporations. In this report, the second in the Power Forward series, we expand upon the analysis of clean energy and climate targets from the U.S. Fortune 100 to include the full U.S. Fortune 500. We total the savings that leading companies are realizing and chronicle the rapidly evolving business practices, financial tools, and policy developments that are catalyzing corporate clean energy adoption and making non-energy companies significant players on the electric grid.

  • The companies in the Fortune 100 that report to CDP report that they are conservatively saving $1.1 billion annually by decreasing their emissions through their emission reduction and renewable energy initiatives.
  • In 2012 alone, these companies decreased their annual emissions by approximately 58.3 million metric tons of CO2 equivalent – comparable to retiring about 15 coal plants – saving them an average of $19 per metric ton of carbon dioxide equivalent emissions (mtCO2e).

This report on Fortune 500 commitments is intended to inform companies, investors, the electric power sector, and state and federal policymakers on trends and preferences among large corporate renewable energy buyers. It is also intended to encourage companies in and out of the Fortune 500 to understand the value of setting renewable energy, energy efficiency, and greenhouse gas emissions reduction commitments.

Recommendations for Companies

  • Companies should set time-bound renewable energy, energy efficiency, or GHG emissions reduction commitments.  Companies across the Fortune 500 have set increasingly aggressive targets. The 3% Solution and The 21st Century Corporation: The Roadmap to 2020 provides two resources for companies to follow as they define the ambition of these targets.
  • Companies with GHG targets should also set renewable energy and energy efficiency targets, or at a minimum ensure that both are part of any GHG reduction strategy. Many companies are realizing a strong return on investment by achieving these targets.
  • Companies should be fully transparent in reporting their GHG commitments and the role that renewable energy should play in meeting them, using emerging global standards for Scope 2 carbon accounting.3   To measure progress, companies should publicly disclose the amount of renewable energy they purchase annually compared to their total energy consumption.
  • Companies should identify opportunities to support local, state and national policies that remove barriers to scale up renewable energy, deploy energy efficiency, and enable companies to achieve their climate commitments.  All companies should be engaged 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.

Recommendations for Investors

  • Investors should continue to file resolutions with companies to set climate and energy targets to deliver cost savings and reduce climate-related business risk.

Recommendations for the Electric Sector

  • Utilities should offer cost-competitive clean energy options to large customers.  Without competitive renewable energy offerings, for example, companies in the Fortune 500 have a continued incentive to bypass their utilities to meet their public clean energy commitments.  Most utilities are not offering these options to large customers.
  • Utility executives should take note of this increasing market demand and engage in dialogues with their large customers on ways to sell the renewable energy offerings corporate customers are looking for.  Special “green tariffs” that allow large customers to buy renewable energy through the utility offer a promising development.

Recommendations for Policymakers

  • Federal policymakers should continue to support the Production Tax Credit for wind and Investment Tax Credit for solar, both of which have helped bring emerging technologies into the mainstream. Allowing both to expire will raise prices for companies committed to buying renewable energy.
  • State utility regulators should authorize the use of third-party Power Purchase Agreements (PPAs) and allow access to net-metering. Unstable or outdated policies are creating roadblocks for large corporate buyers of renewable energy.
  • State policymakers should continue to support renewable portfolio standards, which have provided a marketplace for renewable energy in which large corporate buyers are now participants.  Fortune 500 companies are developing renewable energy opportunities in locations where market conditions are most favorable.

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