How Corporations Buy Their Way to Green

The renewable energy certificate system has gotten more transparent, but improvements are still needed.

This week nine large corporations including Starbucks, Walmart, Procter & Gamble, and Johnson & Johnson said they have joined the RE100, a registry of companies that have pledged to obtain 100 percent of the energy they consume from renewable sources.  That brings to 36 the number of large companies that have joined the program, including the first Indian company, IT provider Infosys, and the first Chinese one, Elion Resources Group.

There are multiple definitions of “100 percent renewables,” however, and so far none of them involve a company actually getting all of its power from wind, solar, geothermal, or biofuels plants.  And in many cases the companies that have publicly pledged to go fully renewable have not assigned a specific deadline.  Falling prices for renewable energy, along with tightening government policies, public and shareholder pressure, and a growing body of evidence that opting for renewables over fossil fuels provides bottom-line benefits are driving this trend.  But getting there still involves a complicated set of decisions, compromises, tough conversations with utilities, and financial maneuvering.

Last year the World Resources Institute and the World Wildlife Fund published the Renewable Energy Buyers’ Principles, a sort of shoppers’ guide that helps companies devise strategies to go 100 percent clean.  One avenue is to purchase renewable energy certificates (RECs), or credits, that enable companies to claim 100 percent renewable sources without getting their power directly from solar panels or wind turbines.  Such certificates are provided by a number of different companies; the Department of Energy online guide to the certificate systems lists 17 providers in the U.S. Each credit represents one megawatt-hour of renewable energy produced by a plant operator who offers the certificate on the open market via one of the brokers mentioned above.

Read more at How Corporations Buy Their Way to Green