By FREE Staff
The United States, with the deployment of Inflation Reduction Act (IRA) funds, is actively pursuing greater policy action in the fight against climate change. The corporate sector is making strides to do its part. Two aspects of corporate action stand out. First, companies across the United States are increasingly willing to publicly commit to a 100% renewable energy future. Second, private sector investments into sustainable energy, clean transportation, battery storage, and energy efficiency are being deployed that might lead to the realization of the 100% renewable energy objectives.
Public Corporate Pledges for a 100% Renewable Energy Future
Companies across the country are spending billions of dollars on public campaigns to outline ambitious emissions targets that promise to transition towards renewable energy. A key piece of these campaigns has become public pledges to transition to 100% renewable energy use.
The global initiative RE100 is helping to encourage and centralize these plans. It’s gathered a group of more than 400 companies from across 175 markets worldwide, with each member committing to their own goals for renewable energy use both in their owned operations and throughout their supply chains. The initiative includes a baseline target for all members to consume 100% renewable energy by no later than 2050. The groups include household names like 3M, Apple, Johnson & Johnson, and Nike.
RE100 touted several improvements in reaching these goals in its 2022 disclosure report, particularly when it comes to the availability of commissioning date information for the reported purchase of renewable energy. Last year, members disclosed a commissioning date for 43% of the reported purchases, up from just 17% in 2021.
The increase is a positive sign of improved transparency and proactivity in a market that often feels opaque and with empty promises of change. This shift is also due in large part to the increased public scrutiny of corporate carbon emissions and consumers’ push for more sustainable products and actions. The amount of renewable energy that members are using is also increasing. In 2021, renewable energy made up 49% of total energy procurement among members, up from just over 30% in 2016.
In its industry outlook, the 2022 report underscores the domino effect that the corporate energy transition can have. A continuous increase in renewable energy procurement can send price signals to develop an electricity grid with more capacity. In addition, given that RE100 members must procure renewable energy from every market in which they operate, the pledges can push more global markets to offer enhanced supplies of renewable energy.
Corporate Sustainability Investments
The Inflation Reduction Act significantly raises the corporate sustainability campaigns’ probability of success. Since its passage, over $150 billion in private clean energy investments has been announced – more than the total U.S. private investment volume in clean energy achieved over 2017-2021 (American Clean Power, 2023).
The $150 billion investment is connected to the deployment of over 96 gigawatt (GW) of clean energy capacity. On its website, American Clean Power provides updated numbers showing that, as of July 31, 2023, over $270 billion in capital investment to support utility-scale clean energy projects and manufacturing facilities has been publicly announced since the passage of the IRA. In total, their inventory suggests that 83 facilities for the sustainable energy transition are expected to be completed or expanded – an investment that could produce as many as 30,000 new jobs. The investments are geared predominantly towards solar energy battery storage.
Realizing a 100% Renewable Energy Future
Together, tools like public corporate pledges for emissions cuts and corporate investments for sustainable energy help shape a future that is more responsive to the climate change challenge. Corporate action in the U.S. and across the globe represents an essential puzzle piece to achieve the sustainable energy transition. The support structure put in place by the federal government and state and local governments appears capable of rapidly driving forward the U.S. clean energy sector. As state-level governments continue to raise their ambitions, for instance through raising the clean electricity targets articulated in Renewable Portfolio Standards (RPS), the U.S. seems on course to transform the energy sector.
As we move towards the next decade and the target date for many of these corporate sustainability campaigns, the ‘polycentric’ layer of action identified by the FREE research team vitalizes policy and civic society and empowers their ability to demand corporate accountability and responsibility to ensure these campaigns come to fruition.