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Corporate Statements About the Use of Renewable Energy: What Does the “100% Renewable” Goal Really Mean?

February 2019

(Washington, D.C.): The number of companies voluntarily committing themselves to using more renewable energy is on the rise. Whether they are “100% renewable” or rely on renewable energy sources for just portions of their operations, companies are using a number of different strategies in setting and fulfilling renewable energy goals, each with differing effects on the energy environment. But what specifically does a company mean when it sets a goal? And what does it mean when a company reports progress? The Environmental Law Institute (ELI) recently released a report that demystifies the voluntary world of corporate renewable energy claims.

Because companies are not legally required to use renewable energy and they set and meet their own goals, a number of questions arise: How should the public understand companies’ goals and progress? Can differences in companies’ renewable energy strategies make any difference in the development and deployment of new renewable energy facilities? Is fossil fuel-based generation being displaced? Does a company that claims a certain renewable energy percentage actually use renewable energy in its operations? The report’s authors examined the renewable energy goals and reporting programs of 19 different companies, including Apple, Google, IBM, Sony, and WalMart, as well as reporting systems and guidelines, in their pursuit of answering these and other questions.

“The changes made by companies in their energy use and changes in their renewable energy purchase methods are commendable and present a profound reason for optimism,” said James M. McElfish Jr., Senior Attorney at ELI and one of the report’s authors. “Yet,” he added, “there also exists an equally important need for clarity.”

The report shows great differences in what information companies provide about their progress toward their renewable energy goals. For example, while a specific percentage of renewable energy use is informative, the implications of that number are not always clear. A company could state that it used 50% renewable energy in its operations. But if it chiefly bought unbundled renewable energy certificates from existing renewable energy facilities in markets that had a very low price and the purchase of which had no positive impact on new renewable energy investment, then the impact may be far less than direct investments or power purchase agreements with renewable energy generators in markets where the company operates. “This is why it is so important for the public to understand the different strategies a company uses and the actual effects its actions have on the development of new renewable energy projects and the demand for renewable electric power,” warned report co-author and ELI Staff Attorney Sofia Yazykova.

The report suggests that an achievable goal that stimulates real investment in renewable energy and displacement of fossil fuel demand may be far more important than a high goal that reflects only a company’s available cash and the availability of unbundled renewable energy certificates. As companies compete for who sets higher renewable energy standards, perhaps the real competition among them should be for the level of impact they create in the energy grid rather than their goal numbers alone.

The report, Corporate Statements About the Use of Renewable Energy: What Does the “100% Renewable” Goal Really Mean?, is available for download here.

James McElfish and Sofia Yazykova are available for interview.