Renewable Energy World: Corporate sustainability requires impactful clean energy investments
By Hannah Badrei, Vice President of Energy Supply Advisory, Edison Energy
As climate impacts continue to ramp up, so too has the global response, particularly from the private sector.
More than 350 major companies have committed to 100% renewable energy as part of the RE100 global initiative. Nearly that many have joined the Climate Pledge co-founded by Amazon, committing to hit net-zero carbon by 2040 —10 years ahead of the Paris Agreement target.
In addition, over 2,000 companies are leading the zero-carbon transition by establishing emissions reduction targets through the Science Based Targets initiative (SBTi).
SBTi recently released its first Corporate Net-Zero Standard, which will require rapid, deep cuts of 90-95% of value-chain emissions to limit global temperature rise to 1.5°C. The Standard calls on companies to cut emissions from their entire value chain, including those produced by their own processes (Scope 1), purchased electricity and heat (Scope 2), and generated by suppliers and end-users (Scope 3).
Beyond SBTi standards, many companies have tackled Scope 1 emissions via carbon offsets and Scope 2 emissions via renewable energy and Renewable Energy Certificates (RECs).
Specifically, corporates have been addressing their Scope 2 emissions by entering into Virtual Power Purchase Agreements (VPPAs)—wholesale financial contracts to buy renewable electrons anywhere in the grid. Opportunities for companies to buy financially settled products such as VPPAs have been a critical step towards weaning society from our reliance on carbon fuels and reducing our collective carbon footprint.