Navigating the nuances of corporate renewable electricity procurement: spotlight on fashion and tech
A special edition of the Corporate Climate Responsibility Monitor assesses the integrity of renewable electricity targets from 10 major companies in fashion and tech. The real GHG emission reduction impact of companies’ renewable electricity claims is often far less than implied. Several companies, including H&M Group, Inditex and Samsung Electronics, continue to rely heavily on standalone Renewable Energy Certificates (RECs), despite mounting evidence and awareness that this low-cost instrument is very unlikely to contribute to additional renewable capacity. In many cases, there is no or a very weak physical link between the grid where the RECs were generated, and the grid where the renewable electricity is claimed. For instance, companies may procure RECs generated in Norway to claim they are using renewable electricity in Bulgaria. This action sends no signal to Norwegian power suppliers, who already are producing most of their electricity from renewables, nor to Bulgarian power suppliers. Most of the 10 companies plan to transition away from RECs to higher quality procurement instruments, such as Power Purchase Agreements (PPAs), in the near future. While PPAs might contribute to additional renewable capacity being installed, further efforts are needed to decarbonise power systems and bring companies’ emissions from electricity consumption to zero.
