As a consumer you may hope to support companies that claim to be energy-efficient and environmentally conscious. Your dollars are your votes in the free enterprise system.
How can you know what the company says has merit? Or, when a statement is aspirational versus actual?
When is a company officially 100 percent “green,” for instance? That answer changes with technology, policies, changing economics, public opinion. Those issues change with terminology, too. Green. Carbon-neutral. Sustainable. Renewable. How are each defined?
No one blog can address these issues. We can provide ideas consumers can use as a lens when they have to decide.
This blog came up when we saw a service institution say it is “100% solar.” It is a smart company, an organization with small offices across many states, and a headquarters, too.
It is a laudable action. The company financially supported a solar farm several states away massive enough to make power equal to all its corporate electric needs. It committed to buy the energy output of that solar farm. The decision is no off-hand or easy call. The company should be commended.
The question: If a company commits to a renewable energy project yet still taps traditional electric supplies from a utility for branch offices in some places, is it 100 percent solar?
“This is a topic of hot debate in the industry,” said a friend who is an industrial-level solar energy developer. “With this headline, a lot of people believe what you took from it – offices are each run by an individual solar installation. In this case, the company has some small and some large offices distributed around the country, and individual solar plants for each location could be cost prohibitive, may not produce enough energy to run the branch on their own, or there may be regulatory barriers in some locations.”
The distinction: Is a company actually using power from the solar site (or a solar site) or are they successfully enabling a solar facility that equals the amount of power they use?
Terminology matters. The key words here are purchase as opposed to use. The company is purchasing power from a solar farm. That power matches up with the company’s overall power usage.
“They’re being rewarded for funding the construction of a renewable energy power plant that presumably would not have been there otherwise and is taking a step towards greening the overall energy mix,” said my solar expert. “Individual branch offices are still likely using carbon-based energy sources. Critics will say that the activities require carbon to be burned and it’s still harming the environment. The company will say that it’s impossible, given its structure, to guarantee every electron it uses is from a renewable source, so this is the next best thing.”
How to approach this as a consumer?
Your math teacher used to tell you, “Show your work.” Same applies here as companies move ahead on various energy statements. Look for their proof of work. Sometimes companies lay it out, sometimes it takes some digging.
Visa lays it out. Here’s a brief look. Visa said it achieved its renewable energy goals. They explain. “Working with local utilities and competitive electricity market providers, Visa leveraged renewable electricity options available in each market that best fit the country’s approach to renewable electricity. Visa made local renewable electricity investments in markets where the company has major facilities, including four locations in the U.S. and the U.K. that account for 80 percent of its global electricity use.”
Usually companies will publish explanations of their efforts in various places – news releases, shareholder information, sustainability reports. Sometimes environmental groups even share the news. Companies can like that – adds credibility to the story. Consumers need to do homework for the best information.
The debate is evolving beyond the amount or kind of energy used. Life cycle discussions are going to increase; the energy or materials are being used in an overall product cycle.
Intel is a good example. “It’s now recycling more than 90 percent of its trash and sending almost no hazardous waste to landfills. The amount of greenhouse gases it pumps out has dropped roughly 30 percent since 2010, although its annual emissions crept up somewhat each year since 2016 as business grew.” (Source)
Good news, but then look at this: “But the bulk of Intel’s contribution to the climate crisis comes from its indirect emissions — those that are generated along the supply chain for its products or released as a result of consumers using those products. In 2019, Intel’s indirect emissions amounted to roughly the same amount of carbon dioxide that more than five coal-fired power plants would put out in one year.”
Good work has been done and good work will be needed. It takes time.
These discussions will open up new business opportunities. Companies will be able to use their expertise for business and social good.
Here’s a smart analysis of business, customers, and expertise combined. “Waste Management’s customers were the outside-in source for the company’s discovery of an overlooked new revenue stream embedded its core competency. Rather than growing its revenue exclusively through an increasing volume of customer-generated waste, Waste Management discovered a hidden opportunity when customers sought its expertise to reduce the amount of waste they generated, turning Waste Management’s business model for generating profit on its head.” (Source)
ECC has mentioned this kind of analysis before. Every company has inherent negatives in its strategy. “This is an element embedded in a business model, strategy, policy or governance whose negative impact, if left unaddressed, grows as the business expands,” says Barie Carmichael, author of RESET: Business and Society in the New Social Landscape.
Barie provides a case. “As United Parcel Service (UPS) expands, for example, so does its carbon footprint, an inherent negative. UPS has applied its engineering expertise and technology to mitigate the impact of this inherent negative, reducing its annual carbon dioxide emissions by 100,000 metric tons. More than a discreet sustainability initiative, UPS’ actions to mitigate its inherent negatives are a way of doing business.” The company gets better, not just bigger.
Visa, Intel, Waste Management, UPS have all looked hard at their businesses, but more importantly, looked hard at their intellect and sense of responsibility to others.
Consumers, including you perhaps, will increasingly judge companies by broad measures of success, for instance:
- The pollution that was created in the supply chain.
- Efforts to reduce materials, energy, or the use of materials that may be hazardous.
- How a company manages customer safety and well-being, or community well-being.
- The treatment of workers who made the product or service.
- The ethics of business behavior.
- How the company taps its core competencies for social good.
The feature image is a solar facility generic shot, credit: Robb Williamson, NREL