Report: Fortune 500 firms showcasing the business case for energy efficiency
Major US businesses are reaping economic benefits from energy-efficiency projects implemented to meet broad sustainability targets, with 190 Fortune 500 companies collectively generating $3.7bn in annual energy savings.
That is one of the standout figures in the latest Power Forward research report. Published this week by WWF, Calvert, Ceres and CDP, the report collates company data from public disclosures of Fortune 500 companies. The report found that almost half of these companies have targets in place to reduce emissions, improve energy efficiency and increase renewables generation.
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“American businesses are leading the transition to a clean economy because it’s smart business and it’s what their customers want,” WWF’s senior director of climate and renewable energy Marty Spitzer said.
“Clean energy is fuelling economic opportunity from coast to coast without regard for party line. Washington policies may slow this boom, but these companies are making it very clear that a transition to a low-carbon economy is inevitable.”
Almost 80,000 emission-reducing projects were responsible for the $3.7bn savings gained by the 190 firms in 2016. Companies including Microsoft and IBM are saving “tens of millions of dollars every year” through these measures, the report notes. CDP data suggests that companies decreased annual emissions by 155.7 million metric tonnes as a result.
In total, 48% of the Fortune 500 companies now have climate or energy targets in place, a 5% increase on last year. Companies are largely meeting these targets, with firms reporting an 81% success rate for reaching or exceeding goals on time.
This trend is prominent amongst the Fortune 100 companies, with 63% retaining or introducing sustainability goals. The smallest 100 companies are also accelerating efforts. The report highlights a 19% increase amongst these firms in setting goals compared to 2013, with 44% now adhering to targets.
The report claims that favourable policy environments at state levels, a decline in clean technology costs, new innovations for renewable energy grid penetration and advances in enabling financial instruments as reasons for the economic gains.
Although efforts in Washington could derail some of this momentum, businesses have been urged to strengthen climate actions through a series of recommendations listed in the report.
Specifically, the report calls on firms to set science-based targets for emission strategies. As of January 2017, 210 companies have committed to science-based initiatives, including 10 Fortune 500 companies such as Procter & Gamble, General Mills and Kellogg’s. Additionally, 72 Fortune 500 firms intend to set such targets by 2019.
The report calls on companies to set emission targets across value chains (scope 3 emissions) to encourage suppliers to tackle climate change. To achieve this, the report calls on firms to share tools, resources and best practices. Efforts are underway to promote this. Last year, global supply chain emissions fell by 434 million tonnes, more than France’s total greenhouse gas (GHG) emissions in 2014.
Companies should transparently report emission profiles, targets, financial implications and the role of renewable energy in meeting CDP’s standards for corporate accounting. Engagement with peer companies, stakeholders and consultants was also encouraged by the report to help with target-setting.
The report urges companies to join initiatives such as the RE100 and EP100 to signify commitments to clean energy. Finally, the report calls on companies to support state-level policies promoting energy efficiency.
Nearly two-dozen Fortune 500 companies are committed to powering all corporate operations with 100% renewable energy. Notable companies pursuing this goal include WalMart, the Bank of America and Google.
Renewable energy targets are increasing amongst the Fortune 500 firms, with 53 agreeing to some form of renewables target in 2016, up from 42 companies in the previous report.
To see the recommendations of the report, and to examine how Fortune 500 companies are setting and delivering on energy and climate goals, read the report here.