Business use of renewable energy on the rise

30th September 2016

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  • Mitigation ,
  • Reporting ,
  • Renewable


Diva Shah

Nearly two thirds of FTSE 100 companies are using, buying or generating renewable energy, a 9% rise from last year, according to an analysis of sustainability reports.

The study, by consultants Carbon Clear, scrutinised FTSE 100 firms’ 2015/16 corporate sustainability reports, annual reports and company websites.

Companies were scored on the rigour of their basic carbon reporting; their strategy, including whether they have carbon reduction plans and people or teams responsible for them; carbon reduction performance including staff engagement; efforts to engage with consumers, the supply chain and investors; and innovation, which scored companies on efforts to apply concepts such as the circular economy and natural capital accounting .

The analysis found that while the number of FTSE 100 companies using renewable energy remained fairly consistent between 2012 and 2015, there was a significant increase in the year to March 2016, with almost 70 companies now using renewable energy.

There has also been a large increase in the generation of onsite renewables, after no change in the 2012-2015 period. The number of companies purchasing renewable energy has risen steadily since 2012, but saw a marked increase in 2016.

There may be several factors behind the trend, Carbon Clear believes. It cites initiatives such as the RE100 campaign to persuade large companies to commit to using 100% renewables and uncertainty over energy supply and improved economics of renewable energy, which may have led companies to take advantage of assets such as rooftops to generate energy as well as lower their carbon footprints.

Source: Carbon Clear

The consultants found that FTSE 100 companies are improving in their approach to indirect emissions (known as scope 3). Two thirds are now reporting scope 3 emissions and over 70% of these report more than just business travel.

However, only a quarter of companies are performing materiality assessments of scope 3 emissions, which Carbon Clear suggests that the categories they report may be the ones where data is the most readily available, rather than those which are most significant in the business.

It also noted that despite an improvement in the number of companies evaluating the risks of climate change to their suppliers, less than a quarter of companies are taking action. Engaging supply chain companies on scope 3 emissions can be daunting, but companies who have done so have found ‘significant value’, it said.

Seventy companies in the FTSE 100 have set carbon reduction targets, Carbon Clear found. Almost half (46%) are on course to meet these, while 19 are exceeding them. The remainder have either missed their targets or have not set any, the consultancy said.

However, many of these targets are not ambitious enough to reduce carbon by the amount recommended by scientists to hold global temperature rises to 2°C, Carbon Clear said.

But a number of companies are now setting targets that align with climate science under the science-based targets (SBT) initiative, a collaboration between CDP, the UN Global Compact, the World Resources Initiative and WWF.

BT set a science-based target last year, the first FTSE 100 company to do so. This year, five more companies have committed to such targets, with a further six also committed to set them in the next two years.

Carbon Clear strongly advocates SBTs, saying: ‘Companies are naturally aware of the reputational risk that may come with failing to achieve an environmental target, however we advocate that it is much better to slightly miss an ambitious target (such as an SBT) than to over-achieve on a non-ambitious target.’

Overall, Carbon Clear ranked BT top its league table, praising in particular its approach to the circular economy and the fact that it has met its SBT ahead of its 2020 goal, achieving an 81% reduction in their net emissions compared to its 1996/97 baseline. Marks and Spencer was ranked second, and Unilever third.

Mark Chadwick, chief executive of Carbon Clear, praised the leading companies for ‘setting the business agenda’. However, he warned: ‘The gap between those pushing the boundaries of best practice and those simply complying with legislation remains as large as ever. Given the risks of ignoring climate change – whether it’s losing business to a competitor who mirrors customer values in sustainability, or infrastructure being disrupted due to severe weather - this doesn't make sense.’

Source: Carbon Clear


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