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The RE 100: 100 Companies Strong and Growing
By Holly Testa, Director, Shareowner Engagement

The RE 100 – a global initiative launched in September 2014 by the CDP and Climate Group – has quickly reached critical mass.

RE100 galvanizes corporations to commit to a time-bound goal to power the entirety of their operations with renewable energy, and offers technical and educational assistance to help make the goals reality. Over 100 global companies with a combined $2.5 trillion in revenue, with the help and encouragement of an investor group that includes First Affirmative, have made the commitment.

Participating companies are leading by example not only because of the existing compelling business case, but also to collectively increase demand for renewable energy, thus encouraging utilities and other energy suppliers to provide it.

The Business Case

RE100's 2017 annual report shares insights from member companies that demonstrate how renewable energy enhances corporate performance through cost savings and risk reduction, while meeting greenhouse gas reduction goals:

  • General Motors reports savings of US$5 million annually and anticipates that this will increase as planned projects come online.
  • Tata Motors saved $2.5 million by installing wind power at a single plant in India and removing the need to pay grid electricity charges.
  • Apple has commitments from eight suppliers to produce Apple products and components using 100% renewable electricity.
  • And Steve Howard of IKEA envisions turning energy expense into income: "Electricity and energy are essentially just costs to your business, until you start generating your own when you can turn a cost into a profit center."

Multiple companies cite reduced business risk from lowering exposure to volatile fossil fuel prices, increased long-term cost control and improved energy security. Others point to how their commitments will help them avoid the worst of the systemic risks inherent in climate change. Marc Engel, Chief Supply Chain Officer of Unilever, believes that "The consumer goods sector is vulnerable to climate change; the increasing likeliness of extreme weather events such as floods and droughts poses a threat to our supply chains and operations. Going 100% renewable will deliver on our consumer promise to deliver brands that are responsibly produced in a world of finite resources."

Leveraging Demand to Transform the Energy Economy

End consumers of energy seem to be way ahead of the traditional power suppliers — utilities. Much of the increased renewable energy capacity has come from a variety of non-traditional sources, including privately owned large-scale wind and solar farms and direct company-owned installations. While progress has been impressive, a full transition to renewable energy will require utility participation and capital investment in renewable generation that can power the grid.

RE100 and other initiatives like the Corporate Renewable Energy Buyers Principles are exerting pressure to create this shift in how the grid is powered. The Principles, developed by large energy buyers including many members of the RE100, provide guidance to utilities and other power providers as to what they need, and expect, when they buy renewable energy from the grid:

  • Greater choice in procurement options
  • More access to competitive cost options
  • Longer and variable term contracts
  • Access to new projects
  • Increased access to third-party financing vehicles and standardized, simplified processes, contracts and financing for renewable energy projects
  • Opportunities to work with utilities and regulators to expand our choices for buying renewable energy

Utilities have a clear signal from major buyers of their product and these principles provide a commonsense blueprint for action.

And, those major buyers are also getting a clear signal — from investors. First Affirmative, among other investor participants, has signed on to letters requesting that portfolio companies GlaxoSmithKline, Prudential, Sage Group, Shire, Netflix and Hargreaves Lansdown join the RE100. We are also planning engagement with other portfolio companies this coming proxy season, to include filing shareholder resolutions if necessary.

The Future Is Now

Some companies have already achieved the 100% renewable energy goal, and others are tantalizingly close. Trailblazers in our portfolio include:

Autodesk, a software company, has achieved its 100% renewable power goal in 2016 – four years ahead of schedule.

Western Europe's Coca-Cola Company committed to 100% renewable power by 2020.

ING, a global bank, is already 86% renewables powered, with the goal of 100% by 2020.

Interface, a carpet manufacturer, is powered by 84% renewables, with the goal of 100% by 2020.

Microsoft has been powered by hundred percent renewables since 2014.

 

37 of our portfolio companies have joined the RE 100

Adobe Systems
Akzo Nobel
Apple Inc
AstraZeneca
Autodesk Inc
Aviva Inc
AXA
Bank Of America
Biogen IDEC
Coca Cola Enterprises
EBAY INC
Equinix Inc
Facebook
General Motors
Goldman Sachs
H P Enterprise
HP Inc
I N G Groep
Infosys
Interface
Johnson & Johnson
Microsoft Corp
Nestle
Nike
Novo Nordisk
Pearson
Procter & Gamble
RELX
Salesforce
SAP
Starbucks
Steelcase
UBS Group
Unilever
V F Corp
Wal-Mart Stores
Wells Fargo

 

First Affirmative is also in direct dialogue with banks to discuss transitioning to renewables for their own operations. Perhaps more importantly, we are prompting banks to aggressively expand their financing of renewable energy projects while curtailing financing of the most carbon intensive fossil fuels including coal and oil sands. We are leading dialogue with Fifth Third Bank and participating in discussions with PNC as part of an ongoing climate change mitigation financing initiative.

Stay tuned for more updates!

 

Mention of specific securities is not an offer to buy or sell that security. For information on the suitability of any investment for your portfolio please contact your investment advisor.

Posted: August 18, 2017