Nearly half of American businesses on the Fortune 500 list are adopting clean energy goals –saving nearly $3.7 billion annually and preventing pollution equivalent to the emissions of 45 coal-fired power plants – according to findings of Power Forward 3.0, a report by the World Wildlife Fund and its partners being released to the public today.
The latest report – compiled by WWF, sustainability nonprofit Ceres, Calvert Research and Management , and the CDP – is based on, and evaluates, clean energy data provided by 190 cooperating Fortune 500 companies.
Indeed, the researchers have determined that almost 50 percent of firms on the list have set targets to reduce greenhouse gases, improve energy efficiency, and increase renewable energy sourcing—up 5 percentage points from their last report, Power Forward 2.0, in 2014.
In addition to that steady overall increase, the report also verified “strong improvement among the smallest 100 companies,” with 44 percent setting goals in one or more categories – up 19 percentage points from 2013. Overall, companies in the consumer staples sector were most active in setting targets, while those in the energy sector (particularly, fossil fuel companies) had the lowest percentage by far.
Similarly, a breakdown of the overall 2016 Fortune 500 by industry reveals that t consumer staples is the leading sector, with 72 percent of companies having set a target. Nearly two out of three companies in the materials (66 percent), utilities (65 percent), and industrials (62 percent) sectors have set targets, as well.
Following closely behind is the real estate sector, with 60 percent having a target. The IT sector is next, at 57 percent. And – no surprise – the energy sector, mostly oil and gas companies, again lags all others in the Fortune 500, with just 11 percent of companies setting targets — down from nearly 25 percent from the previous report.
What’s more, companies with targets said they are “doing well” in meeting them. On average, companies reported an 81 percent success rate in achieving or exceeding their targets.
Pursuing and achieving clean energy goals also has yielded financial benefits to these companies. Nearly 80,000 emissions-reducing projects were behind the $3.7 billion in collective savings captured by the 190 companies in 2016 alone. More specifically, Praxair, Microsoft, and IBM are among the companies saving tens of millions of dollars every year through their energy efficiency efforts.
The ability of the studied companies to adopt and subsequently achieve such ambitious goals is inextricably linked to several factors, the researchers found – among them:
- The continuation of favorable policy environments at the federal and state levels;
- Continued cost declines in clean energy technologies;
- Technical innovations that allow for increased renewable energy grid penetration and demand-response; and
- Advances in enabling financial instruments.
Finally, while corporate target-setting for renewable energy, GHG reductions, and energy efficiency improvements is becoming more commonplace, 37 percent of the Fortune 100 and 52 percent of the Fortune 500 still lack any targets whatsoever
In the 2016 reporting cycle, 43 companies said they have not set a formal target, for one of the following reasons:
- The company does not set quantitative targets;
- Targets are not applicable to the industry (e.g., industry does not produce significant emissions or that emission reduction goals are not effective or appropriate for their industry);
- A target still is being evaluated or is in progress;
- The company cannot set a target due to an acquisition, divestiture, or other internal reorganization;
- The company has not set targets previously and is exploring options; or
- The company prefers to set goals for specific business units or geographie,s rather than setting organizational targets.
With regard to future target-setting among the companies that currently lack a target, about 44 percent may consider setting a target in the near term.
In the end,most respondents believed that progress would be dependent on whether industry and government could work together productively. For example, according to Bill Weihl, sustainability director for Facebook, “I think things have really accelerated in the last year or two. More companies are setting goals. More are seeing it’s important both for their reputation and for the planet, but also financially. We’ve been working together with close to 30 other companies and several nonprofit organizations to approach utilities, to approach regulators, and to approach legislators and governors. And [we] talk to them about what we want in renewables, and what policies we need to make that happen.”