Recently at the Sustainability Advantage “After Paris” Forum, the topic of innovating to net zero and 100 percent renewable energy featured heavily (a summary of the event to be written up soon). Building on that topic I thought to share some recent announcements of organisations that are completely going off fossil fuels. But where the event highlighted the business benefits being driven by long term trends and responsibility, this article looks at the immediate bottom line benefits that Mars, Philips and Akamai are capitalising on. These are cost-saving and product innovation.
Power Purchase Agreements are cheaper now
This month in Triple Pundit, Mars announced its plan to power 100 percent of its United Kingdom operation with renewable energy. This comes after its September 2015 announcement for the United States. Its approach was a simple electricity retailer negotiation with Eneco Wind UK to lock Mars into electricity produced by the Moy Wind Farm in Inverness, Scotland.
Last December Sustainable Business wrote an article about Philips’ power purchase agreement in the United States, giving it enough wind power to power its entire US operation. The Hidalgo Wind Farm is in Texas and is being built by EDF Renewables as a result of this agreement. It therefore makes this renewable energy purchase additional, meaning it is contributing to the development of new renewable energy instead of just buying from existing sources.
In both countries, it is now possible to negotiate cheaper electricity prices for renewable energy than fossil fuel based power. This is why Brent Shafer, CEO Philips North America was quoted as saying it will “positively impact our bottom line, demonstrating the private sector can benefit from and help drive clean energy”.
The sales growth upside
Akamai Technologies is far from a household name but it is undoubtedly in every household. It is one of the Internet content delivery network companies and is apparently responsible for 15 to 30 percent of all web traffic through its servers. Akamai has pledged to go 100 percent renewable by joining RE100.
The Akamai announcement is the first I have seen that explains its primary driver as strategic customer alignment and engagement. Akamai is now the first of its competitors to move on 100 percent renewable energy, and it will grab them a ton of market share.
Its customers – including Apple, Yahoo!, Microsoft, Facebook and Adobe – have already announced ambitious carbon and renewable energy goals. A major component of their Scope 3 emissions (indirect emissions sources coming from its value chain) come from the servers of its content delivery network providers. For its customers to meet their carbon and energy targets they need to look at this area. Sustainability managers would have to assess the footprints of these suppliers against own servers and networks, set targets and obligations on its supplier(s) and track performance regularly. A lot of work. With Akamai however, it does not have to do anything because it will be absolutely zero. Something the Sustainability Manager no longer has to worry about, ever. An area where the Sustainability Manager can check off its decarbonisation priorities.
Akamai say as much in their article via the Rocky Mountain Institute:
“[T]he business case is not so much about locking in fixed energy pricing. It’s about anticipating the market trend.
Clean-powered, low-carbon content delivery is a differentiating feature desired by an expanding segment of our customer base. Over the past decade, there’s been a strong trend among the Fortune 500 towards more sustainable operations, reducing waste and pollution, increasing energy efficiency and more recently, decarbonizing energy.
By 2013, 60 percent of the Fortune 100 had set targets to reduce greenhouse gas emissions and buy clean energy. RE100, an organization formed to recruit, track and promote global companies that have 100 percent renewable energy commitments, includes more than 50 major businesses.
Other organizations have sprung up — such as RMI’s Business Renewables Center (BRC), which recently formed a partnership with RE100; WWF/WRI’s Corporate Renewable Energy Buyers Principles; BSR’s Future of Internet Power; and RECS International — to facilitate and accelerate corporate procurement of renewable energy, until recently the sole purview of electric utilities. The world is going clean and green, and we want to help it go faster forward with a low-carbon-powered global delivery network.”
The trend towards 100 percent renewable energy is quickly becoming an unstoppable force. As suggested at the After Paris Forum, we already know who the thriving businesses in the future are because they are on top of these trends. But it is now obvious that the successful businesses of today need to be working towards this too – using renewable energy to save costs and win market share.