Green Business And Its Limits

Last week, Sierra Magazine, the magazine of the Sierra Club, published my story headlined The 100% Club, about the impressive commitments that a growing number of big companies are making around renewable energy. The story highlighted Ikea, Intel and Mars, but I could just as easily have written about Apple or Google or Walmart, all of whom are buying lots of wind and solar power. Here's how the story begins:

Steve Howard, a 49-year-old Brit, has devoted most of his career to fighting climate change. He spent seven years as CEO of the Climate Group, a global nonprofit whose goal is "a prosperous, low-carbon future for all." He sounds the part: "There is no peak sun, there is no peak wind," he declares. "We struck sun and we struck wind before we struck oil."

These days, Howard pursues his climate activism as chief sustainability officer of the IKEA Group, the world's largest furniture retailer. IKEA has invested 2 billion in wind and solar power to meet its goal of producing as much renewable energy as it consumes by 2020. "We clearly see them as our future sources of energy," he says.

IKEA is just one of dozens of big companies that are making significant investments in clean energy. In fact, a majority of Fortune 100 companies have invested in solar or wind power or have pledged to reduce their greenhouse gas emissions, or both, according to Power Forward 2014: Why the World's Largest Companies Are Investing in Renewable Energy, a report from the sustainability advocacy group Ceres. They are doing so because they believe it makes good business sense: The costs of solar and wind are falling, state and federal governments offer generous subsidies, and fossil fuel prices can be volatile. Some see green energy commitments as a way to burnish their reputations. Still others are responding to carbon regulation-Europe, California, nine northeastern states, and British Columbia all tax or cap greenhouse gas emissions, and some business leaders believe that many other governments will, and should, follow suit. Whatever the reasons, these companies are signaling that they accept the reality of climate change and proving that renewable energy is neither a job killer nor a drag on economic growth.

The list of companies that have promised to purchase all of their energy from renewable power by 2020- the so-called 100% club -- includes insurer Swiss Re, British telecommunications group BT, H&M, Mars, Nestle, and Philips. Kohl's, Whole Foods Market, Staples, TD Bank, Herman Miller, REI, and the Philadelphia Phillies are already there, although some are getting there by buying Renewable Energy Credits, or RECs, which may or may not be effective, depending on who you ask.

But here's the thing: It's not nearly enough. The most telling data point in the story is this:

The 1,300 companies and nonprofits that have joined the EPA's Green Power Partnership, a voluntary program to promote clean energy, collectively use 28 billion kilowatt-hours of green power annually. That sounds like a lot, and it is-but total U.S. electricity consumption is 3.832 trillion kWh.

This underscores the limits of voluntary action. Then there's this: Self-reported greenhouse gas emissions from the world's 500 largest businesses - which include many of the companies named above -- actually grew by 3.1% between 2010 and 2013, according to a Thomson Reuters report released in December.

So while plenty of "good" companies are stepping up to do their part, their efforts are being more than offset by others. That's why government action to curb GHG emissions, particularly the EPA's Clean Power Plan here in the US, is so important. Those companies that are serious about climate change will demonstrate it by spending some of their political capital to back the EPA.

You can read the rest of my story here.