Across the globe, we are at a critical tipping point in the fight against climate change. The private sector, which has long served as a force for doing good, is under increased pressure to implement sustainable business practices. This comes from employees who put pressure on their employers, consumers who wield their purchasing power, and investors who are increasingly integrating ESG (environmental, social, and governance) issues into their decision-making.
But today, being a sustainable business means more than just doing the “right thing” – it also makes good business sense for the company’s bottom line.
Retail’s responsibility to power operations renewably
Through large-scale manufacturing, shipping materials, supply chain processes, and powering stores, the global retail industry is a staggeringly large contributor of carbon emissions. Since these global systems require significant amounts of energy, they are prime candidates for integrating renewable electricity into their value chain and using energy sources like wind and solar to power retail operations.
More than 200 of the world’s largest companies have already committed to a 100% renewable energy supply through their membership with the global collaborative, RE100. In fact, over 7% of RE100 members are retailers, including international brands such as Walmart, Target, Lululemon, IKEA, and H&M.
In addition, businesses are taking action by leveraging frameworks like the Science Based Targets initiative to help chart their transition to lower carbon emissions. Almost 800 companies are taking science-based climate action with the initiative with over 6% representing the retail sector.
Consumer pressure to embrace sustainable business practices
This transition to renewables is largely driven by mounting pressure from consumers to enhance sustainability efforts. Nielsen found that 73% of global consumers would change their consumption habits to reduce their environmental impact, and 81% feel strongly that companies have a role to play in improving the environment. As consumers are increasingly encouraging corporations to become more sustainable by voting with their dollars, businesses need to listen and act.
With a growing number of consumers showing concern for the environmental impact of their purchases, retailers can increase trust – and sales – by incorporating more sustainable practices into their operations. For the bottom line, sustainability efforts can translate into improved sales and brand loyalty as consumers look for providers that align with their own values.
A 2019 survey commissioned by Enel Green Power found that while about half of Americans say they would pay more for a sustainable product, items produced in a sustainable way don’t need to come at a premium. With the cost of renewable energy steadily decreasing globally, experts are predicting that renewable energy will be consistently cheaper than traditional fossil fuels in 2020. This means that the commitments made by an increasing number of well-known consumer brands, including Enel Green Power business partners, can actually save businesses money while reducing their carbon footprint.
So, what’s the next step for retailers?
Through Purchase Power Agreements, or PPAs, renewable energy is more accessible than ever before. PPAs are contracts that allow companies to purchase energy directly from a wholesale supplier and exercise more control over their energy mix. For example, PPAs, like the one between Kohler Co. and Enel Green Power, help provide energy at a predictable cost while making an immediate environmental impact – with this agreement Kohler expects to lower its operational greenhouse gas emissions by 25%. Beyond positively impacting the environment, investing in renewable energy can help manage fluctuating energy costs, enhance reputation, and improve energy security.
Additionally, with cleantech innovations such as battery storage, tech-driven energy efficiency and management, and creative structures providing access to renewable energy procurement, it’s easier (and cheaper) than ever for retail businesses to explore the sustainability and bottom-line value of renewable energy. With these growing opportunities for renewable energy investment, retail businesses are well positioned to make and renew commitments to sustainability through green power and energy innovation.