Monday’s news from the United States regarding 13 major companies announcing they will invest $140 billion in renewable energy, to reduce carbon emissions, is proving big business is serious about climate change.
Some of the most well-known brands, including Apple, Microsoft, Google, WalMart, and Coca-Cola said in a statement from the White House they plan to add more than 1,600 MW of additional renewable energy. These 13 companies have promised their support for a climate deal ahead of the United Nations climate summit in Paris late fall.
Meanwhile, last week, Amazon added their voice in advancing the renewable energy agenda, when it advocated for renewable tax credits in US congress. Thank the world’s largest e-commerce store for purchasing a North Carolina wind farm, in championing both the Investment and Production Tax Credits.
Here are some driving factors why this is a trend that’s likely here to stay.
1. Consumers are voting with their dollars, not necessarily at the ballot box: Ok, I get this where politics is important and elections drive climate policy (including the upcoming Canadian Federal election this fall). However, consumers voting with their dollars has become a new way of doing politics outside the government realm. Ethical funds, consumer boycotts are some ways customers can voice their displeasure with how companies are doing business. Businesses, have a faster response time with consumers, rather than governments with their constituents on many problems. Case in point, Newsweek, recently highlighted Corporate America’s critical role in supporting same- sex marriage and other social issues:
Fortune 500 corporations are trying to appeal to (or at least avoid offending) the widest possible swath of Americans. “Inclusiveness” may not be good politics in this day of polarization and micro-targeting, but it seems to be good business. And that is making the business community the sort of “big tent” political force that neither major political party can claim to be.
While don’t expect the CEO of Suncor to be buddies with New Democratic Party leader Tom Mulclair any time soon, big business will have a bigger ear towards consumers going forward, or they will lose customers business.
2. The Carbon Investment Bubble is About to Burst: Bill McKibben’s groundbreaking 2012 Rolling Stone article about how Earth could only burn 565 gigatons more carbon into the atmosphere by 2050 before this planet can keep within the 2C limit, was the catalyst of divesting from fossil fuel investments. Now, fossil fuels becoming a more riskier investment. as Bank of England Governor Mark Carney noted these investments will become financially abandoned.
3. IT and Internet companies Are The Backbone for Renewable Energy: From Apple, who runs all their US operations on 100% renewables, to Google, who has bought 1.1 GW of clean energy, information technology and internet-based companies have been leaders in supporting renewables. Tom Friedman’s 2008 book Hot, Flat, and Crowded exemplified how information technology was going to be critical in moving green technology forward.
We are starting to see this marriage become a reality, with these companies investing heavily in The Internet of Things, and smart grid technology. Smart grid markets are estimated by 2020 to reach past $400 billion globally. Hence, there is real incentives for the likes of Google, Apple, Cisco, in reaping the rewards of strong climate change policy.