Renewable Energy: A Major Opportunity for Corporate Leadership

The recent CDP report, Corporate Renewable Electricity Sourcing Trends 2024, shines a spotlight on corporate energy practices. It reveals a mix of progress as well as glaring gaps in ambition and accountability. With a wide scope covering over 9,500 companies representing 13% of global electricity generation, the report shows corporate energy decisions have immense potential to accelerate the global transition to renewables.

The report also highlights the urgency for businesses to step up and meet this challenge in time for the 2050 climate goals.

Key Insights from the CDP Report

Low Ambition and Accountability

• While companies report purchasing 29% renewable electricity, only 16% is credibly verified through transparent mechanisms such as PPAs, contracts with suppliers or unbundled EAC purchases observing market boundaries.
• Only 10% of companies have set targets to consume 100% renewable electricity, with an average target year of 2033. In contrast, 75% of companies studied have not set any renewable electricity targets. This reflects insufficient alignment with the UNFCCC goal to triple renewable energy capacity by 2030.
• Under 5% of companies have set energy efficiency targets, which limits their ability to reduce emissions.

Purchasing Mechanisms and Inequality

• Power Purchase Agreements (PPAs), which directly support the development of new renewable energy projects, account for 34% of renewable electricity purchases but are largely utilized by the biggest electricity users. The report notes these agreements are generally inaccessible to most companies.
• Unbundled EACs and contracts with suppliers remain the primary procurement options available to many companies.
• Smaller and medium-sized companies, who collectively represent a substantial portion of energy use, face barriers to accessing more impactful renewable procurement models.

Sectoral and Regional Disparities

• The manufacturing and materials sectors, despite being the largest electricity consumers, have some of the weakest renewable energy ambitions. For instance, only 22% of apparel companies and 23% of manufacturing firms report renewable electricity targets, compared to 46% in services.
• Regionally, Europe leads in renewable energy consumption but still relies heavily on older projects. Many companies fail to invest in newer and more impactful clean energy sources. Meanwhile, North America lags in adopting robust credible renewable procurement mechanisms.

The Cost of Inaction

The consequences of inadequate renewable energy adoption extend beyond environmental harm. Companies that fail to adopt ambitious renewable energy strategies risk:

• Regulatory penalties as governments enforce stricter climate policies
• Reputational damage as consumers and investors demand transparency and accountability
• Missed opportunities. Companies that invest in renewables position themselves as leaders in innovation and benefit from cost savings and operational resilience

Bridging the Gap: The Role of Corporate Leadership

Corporate decision-makers have a critical role in addressing these challenges. By setting ambitious renewable energy targets companies can:

• Drive sectoral change. Leading by example influences peers and supply chains to adopt sustainable practices
• Improve transparency. Verified claims build trust and attract eco-conscious consumers and investors
• Support innovation. Investment in new renewable energy projects accelerates development of cost-effective clean energy technologies

How Can We Help You

At STRIVE by STX we understand the complexities of renewable energy procurement. Whether you’re at the beginning of your journey or refining your strategy our tailored solutions empower businesses to:

• Develop actionable roadmaps for achieving 100% renewable electricity targets
• Access impactful mechanisms like PPAs and direct renewable energy investments
• Ensure credibility by streamlining reporting and third-party verification
• Collaborate with stakeholders to align sustainability goals across teams suppliers and regions

With our expertise, companies can turn ambition into action delivering measurable impact while meeting global sustainability standards.

Ready to Lead the Energy Transition?

The path to net-zero emissions demands decisive action. Now is the time to align your renewable energy strategy with global goals. Download the CDP report here to explore the full insights and contact us to accelerate your decarbonization journey.

Together we can make significant strides towards a low-carbon economy.

Interested or have any questions?