How renewables can help feed the world without overwhelming the planet

The global population is expected to increase by nearly a third, or by 2 billion people, by 2050. With the food production chain among the greatest contributors to global warming, feeding the world without overwhelming the planet has become an urgent imperative. Today, as an increasing number of companies and countries take up the climate change challenge, and consumers begin to demand sustainable products, the food industry is changing – fast. 

Many brands are putting in the work on health and wellbeing, creating healthier products with the sustainable sourcing of raw materials. Meanwhile, a focus on human and labor rights in the supply chain has seen companies join initiatives such as Fairtrade to ensure that those working to produce the food we eat do so in safe conditions and are paid a fair wage. Cutting water usage and reducing waste impact has also become a major priority, with many companies bringing products on the market with recyclable packaging. 

But without tackling the big energy usage and emissions elephant in the room, none of these efforts will have a meaningful impact on the future of our planet.  

From the production of crops, forestry, meat and fish products to food storage and processing, transport and distribution and food preparation, the agri-food value chain today consumes 30% of the world’s available energy and accounts for as much as a fifth of all global greenhouse gas (GHG) emissions. As the population grows and food requirements go up, a solution must be found that reduces the use of fossil fuels while still reaching food productivity targets.

Fortunately, leading companies in the sector, from retailers to agro-food processors, are taking steps to make this happen, by making the shift towards more sustainable, renewable energy sources.

From retailer Walmart’s commitment to source 100% of its electricity from renewable sources by 2035, to the work of global confectionery producer Mars, which has already converted several of its operations to 100% renewable energy, and fruit and vegetable producer Dole’s pledge to achieve zero fossil-based plastic packaging by 2025 and net zero carbon emissions in all of its operations by 2030, companies across the food value chain are taking their responsibilities seriously.

But it is not just the large household names that can make a difference. In recent years, consumers around the world are increasingly aware of the environmental impact of the brands they buy from, and this includes food and beverage companies. According to the Harvard Business Review “products that had a sustainability claim on-pack accounted for 16.6% of the market in 2018, up from 14.3% in 2013, and delivered nearly US$114bn in sales. Most importantly, products marketed as sustainable grew 5.6 times faster than those that were not.” The study adds that consumers are now “actively buying more environmentally friendly products,” and some are even willing to pay a premium for food and beverage products that follow sustainable business practices. What’s more, the environmental practices of the food industry are under constant watch from governments and NGOs, due to their potential impact.

Tackling their carbon footprint, alongside other SDG-linked objectives, is vital for companies of all sizes that want to keep market share and contribute to a sustainable future.

The renewable energy opportunity 

In recent years, solar power purchase agreements (PPA) in the commercial and industrial sectors have made an enormous contribution to the growth of renewable energy. Last year, corporations purchased a record 23.7GW of clean power through long-term agreements, despite the devastation caused by the Covid-19 pandemic and a global recession.

For companies in the food sector, solar PPAs are especially useful, since the energy demand from process heating and cooling, pumping and facility ventilation, and lighting is higher during daylight hours – even in facilities that operate 24/7.

While other renewable energy sources have also been used by the sector – such as the conversion of biomass into energy – they are not free of emissions. Processing organic waste into biofuel is not only an expensive and complex process, but it also produces greenhouse gases from combustion, so while biomass power might be a renewable source, it doesn’t tackle the emissions problem.

By signing a corporate solar PPA, a food company can reduce energy expenses and greenhouse gas emissions simultaneously, without affecting monthly cash flow. 

Of course, companies within the sector can also purchase their own solar power systems, but this requires capital that could be used to invest into expanding production capacity, innovating new products, or entering new markets. With a solar PPA, food companies can use the capital saved to improve sustainability elsewhere within their business, from boosting energy efficiency to upgrading equipment.

With a corporate PPA, companies can also access another type of savings that are not evident upfront. When food production companies obtain their power from the grid, they are subject to tariff increases from energy companies – and with wholesale energy prices reaching multi-year highs in several markets, many are feeling the pinch. A PPA clearly establishes the price of the electricity for the duration of the contract, locking in certainty at a time when companies are facing extreme market volatility.

Solar PPAs not only offer a reduction of energy expenses; they provide an opportunity for food companies to become more environmentally responsible as they step up to the challenge of feeding an extra 2 billion people in the coming years. 

How Atlas can help

Without a shift to renewable energy, there is no sustainable way for businesses within the food production sector to keep up with increased demand. Feeding the world without destroying the planet in the process is one of the most important issues of our time, and companies in the sector must act now – both in making their internal operations more sustainable as well as demanding that the suppliers they buy from do so too

Atlas Renewable Energy was conceived with sustainability at its core. It develops, builds, finances, and operates clean energy projects across the Americas that enable companies to power their operations sustainably.

With robust experience handling long-term renewable power purchase agreements (PPAs) to renewable energy certificates (RECs), Atlas helps large energy consumers across industries make the shift to green energy and manage their transition to net-zero emissions. 

To find out more about Atlas Renewable Energy’s approach and how it can help your company meet its sustainability goals, contact us at contacto@atlasren.com.

In partnership with Castleberry Media, we are committed to taking care of our planet, therefore, this content is responsible with the environment.*

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Ensuring the triple bottom line for your renewable energy strategy: the biggest return on investment

Traditionally, businesses have focused on a single bottom line: profit. However, John Elkington, a world authority on corporate responsibility and sustainable capitalism, has a different take: the triple bottom line (3BL).

This concept measures growth according to a company’s social, environmental, and economic impact. And if there’s one industry that’s in perfect alignment with the triple bottom line, it’s renewable energy. Why? Because renewable energy, especially when it’s implemented alongside sustainable values, supports local communities – the “people” aspect of the 3BL concept, avoids the consumption of finite resources – the “planet” aspect, and represents a reliable investment and a means of lowering energy costs – the “profit” aspect.

Making the switch

According to the 3BL approach, profits still do matter – just not at the expense of environmental and social needs and concerns. Still, businesses are more open to making the switch to sustainable practices if they can be sure that their profits won’t suffer in the process.

One of the biggest concerns regarding renewable energy is the idea that it’s an expensive alternative to fossil fuels – and for large energy users for whom electricity accounts for a huge proportion of their fixed costs, this creates an enormous huge barrier to making the switch. However, this is no longer the case: renewable energy has become more competitive and available in recent years, to the extent that, in many markets, it’s actually more affordable to power your operations with solar energy than it is to use conventional power sources.

With long-term corporate power purchase agreements (PPAs) providing the ability to lock in lower rates for longer, investing in green energy makes commercial sense in terms of significantly reducing costs as well as improving energy efficiency.

Circling back: energy’s role in circular economies

An understanding of circular economies is crucial for implementing a 3BL approach. The reason being that circular economies are the antithesis to a linear economic model, in which the lifespan of materials is limited to a single-use purpose. This means that energy use will always be at the forefront of sustainability, as these systems of reuse and recycle require great power resources to function.

Thus, manufacturing industries, for example, should be interested in adopting renewable energy methods as a way to reduce their carbon footprint, and in order to position themselves as favorable options within the circular economic models of the future.

Tying it all together

The environmental aspect of renewable energy is more obvious. At the most basic level, companies that run their operations on renewables are reducing greenhouse gas emissions from their activities, but it goes further than that: they’re also contributing to United Nations Sustainable Development Goal 12 – Ensuring sustainable consumption and production patterns. Beyond that, though, they’re also demonstrating additionality: every purchase of clean energy from Atlas enables the development of more renewables projects, tipping the balance ever further towards the energy transition.

It’s perhaps easier to see how economic benefits relate to environmental efforts, if these are approached pragmatically and innovatively. Does this mean that the social bottom line is the most difficult one for companies to implement? What exactly is the return of investment when we talk about pension schemes, gender equality, and cultural diversity in the workforce?

At Atlas, we recognize that the social bottom line is the most fundamental long-term effect. It may be harder to quantify, but the social bottom line is at the heart of all returns of investment: by educating communities on sustainable practices, we guarantee that there is trans-generational adaptation to new ways of working and living. From within Atlas, by offering competitive salaries and applying forward thinking practices, we make sure to attract and retain a strong workforce, composed of bright minds who will continue to push us forward. Finally, by truly committing to and building from people-and-planet-centered core values, we guarantee a level of reputation and credibility that ensures us a leading position in the market.

According to research by the International Renewable Energy Agency (IRENA), the expected increase in human welfare from the deployment of renewables is close to 4%, from health improvements as a result of decreased emissions, to job creation and greater social inclusiveness. As a result, by transitioning to renewable energy, corporations can amplify their positive social impact beyond the confines of their own internal operations.

The value of reputation: transparency and metrics

In the past two years, pandemic-influenced instabilities have called on companies to offer greater support to their employees (through benefits such as paid sick leave) or run the risk of losing credibility with both communities and stakeholders.

Furthermore, both countries and companies are facing ever-growing pressure to publicly commit to climate change mitigation and reduction by acknowledging and making steps to meet the goals outlined during last year’s COP26 summit.

The growing presence of these conversations on the level of global politics means that companies face potential regulatory risks and the prospect of carbon taxes unless they adopt ESG (environmental, social and governance) principles of operations. We’ve previously shared information on the numerous frameworks that companies can use in order to get started, such as the UN’s Sustainable Development Goals (SDGs) and the International Finance Corporation (IFC) Performance Standards.

Although these frameworks serve as solid guidelines, John Elkington argues that the key challenge to the triple bottom line is precisely the difficulty of measuring social and environmental changes. How do we quantify growth, beyond financial parameters? And how do we make sure that all three bottom lines are being developed equally?

Atlas believes that transparency is one way to address these questions and hold ourselves accountable, which in turn reinforces our position as a business that’s geared towards being a force for good. In the age of social media, consumers will swiftly verify that companies are incorporating their values in every level of service and production, actually walking the talk, and not simply greenwashing their way out of further scrutiny. Let’s not forget that the way in which a company is perceived by the public is one of the first points of focus for shareholders.

(For an in-depth view into Atlas’s practices, please see our 2017-2020 sustainability report.)

More than just a viable option for green power, Atlas is committed to the triple bottom line, every step of the way.

In partnership with Castleberry Media, we are committed to taking care of our planet, therefore, this content is responsible with the environment.

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The vital role corporations play in achieving the COP26 commitments

While the climate pledges launched and agreed to at COP26 in Glasgow fell short of what is needed to limit global warming to 1.5°C (2.7°F) over pre-industrial levels, the direction of travel is clear. There’s no more time for what environmental activist Greta Thunberg refers to as “blah blah blah”, and private sector commitments launched at the conference look set to reshape the agenda for businesses around the world. Now that the initial buzz has died down, we take a look at how companies can get real about COP26 in the months and years to come, and become part of the solution to climate change.

Stamping out greenwashing

One of the most interesting developments to come out of COP26 was the explicit statement by the International Financial Reporting Standards (IFRS) Foundation Trust that it will launch a new board to tackle greenwashing. This means that corporations all over the world will be held accountable for disclosing their climate risks for the first time, and will have to present them in a way that is transparent, comparable, and useful for analysts, auditors, investors, lenders and regulators.

When implemented, the new International Sustainability Standards Board’s (ISSB) sustainability disclosure requirements will mean that companies can no longer hide behind vague pledges and statements. To prepare for this change, companies need to prove real impact beyond virtue signaling – or risk falling short of expectations.

An effective sustainability program based on science

The change has already begun and action is gaining pace. In November 2021, 1,045 companies representing more than US$23tn in market capitalization responded to an urgent call to decarbonize at the pace and scale required to limit global warming to 1.5°C by joining the Science Based Targets initiative (SBTi) – a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF).

The companies span 53 sectors in 60 countries and have more than 32 million employees, and each of them have set emissions reduction targets in line with science, that are measurable and achievable.

The impact of this will be enormous – when the top 100 highest emitting companies comply with their pledges over the following months, the collective emissions reductions by 2030 should exceed 262 million tones, which is equal to the annual emissions of the entire country of Spain.

For many businesses, one of the most important immediate steps in the race to net zero is reducing emissions from power use – their scope 2 emissions – and this can be done by sourcing renewable energy.

The SBTi has now launched the world’s first net-zero corporate standard, which offers companies robust certification to demonstrate to consumers, investors and regulators that their net-zero targets are reducing emissions at the pace and scale required to keep global warming to 1.5°C – enabling them to prove their commitment. 

Making real change

For the first time, COP26 saw countries acknowledge that fossil fuels were the main cause of climate change.

Glasgow marks “an accelerated shift away from fossil fuels and toward renewable energy,” according to Martina Donlon, climate communications lead at the UN.

Recognizing the progress already made in reducing the costs of clean energy alternatives such as solar, the world’s governments agreed to prioritize their support fully towards the clean energy transition – and here, the private sector has a huge role to play.

According to recent figures from the Climate Group and CDP, the international non-profit groups which run RE100 – the coalition of major businesses committed to purchasing 100% renewable electricity – companies’ demand for renewable electricity has now surpassed that of the G7 countries. 

To meet global climate targets, and to remain competitive in a world driven by affordable clean electricity, it quickly needs to become the norm to power businesses with renewables – and fortunately, this is a possibility. We should know, we’re the ones providing a growing number of companies with renewable energy.

Looking to the past to create a better future

The 1980s was the decade of big everything: big hair, extreme fashion, larger than life music industries – and a big hole in the ozone. For the first time, the impact of human activity on the environment was laid bare: chlorofluorocarbons (CFCs) from refrigerators and aerosol cans were breaking apart the stratospheric layer that protected life on earth from harmful UV rays.

A landmark multilateral environmental agreement signed in 1987 – the Montreal Protocol – put an end to this. As the only United Nations (UN) treaty to have been ratified by every single country on Earth, it has led to the phasing out of 98% of ozone depleting substances compared to 1990 levels – thanks largely to the actions of innovative companies, who invested in alternative technology and rethought the way they did business. As a result, the ozone layer is projected to recover by the middle of this century.

The world back then was reacting to a global threat, and companies stepped up to the plate. Today, facing an even greater threat, we do not have the luxury to be reactive. The private sector has the opportunity to lead on climate action, and this time, being proactive will be vital.

How Atlas can help

The time for companies to act on climate change is now. In the wake of COP26, the spotlight is on corporate action, and a clean energy strategy is one of the most effective ways to meet science-based net zero targets.

Atlas Renewable Energy was conceived with sustainability at its core. It develops, builds, finances, and operates clean renewable energy projects that enable companies to power their operations sustainably.

With a range of services, from renewable power purchase agreements (PPAs) to renewable energy certificates (RECs), Atlas helps large energy consumers across industries manage their transition to net-zero and track their performance against long-term environmental and emissions targets.

To find out more about Atlas Renewable Energy’s approach and how it can align your company with net zero, please contact: contacto@atlasren.com

In partnership with Castleberry Media, we are committed to taking care of our planet, therefore, this content is responsible with the environment.

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How generating sustainable change at scale leads to positive tangible environmental and consumer impact

Corporate sustainability has gone from being a “nice to have” to a “must-have”, as business leaders around the world start to factor in meeting the needs of the present without compromising the ability of future generations to meet theirs.

Although the spotlight is most often on polluting industries, organizations operating within sustainable industries also have a role to play in adopting more sustainable practices across their operations.

In this deep dive, we take a look at how companies can adopt measures that generate positive changes at scale, leading to a real environmental and consumer impact.

Why sustainability is important for business

The environmental and societal benefits of a sustainable economic model are clear, and have been brought into sharp focus by Covid-19. More and more, consumers around the world are asking the companies they purchase from to do the right thing, with the EY Future Consumer Index finding they are willing to pay a premium for sustainable products and services as the post-pandemic recovery begins.

At the international level, the upcoming COP26 meeting – touted as the “most important climate meeting of our generation” – will see countries present more ambitious commitments toward net-zero emissions.

And with rising regulatory risks and the prospect of carbon taxes in several markets, it is clear that companies must embrace sustainable business models now.

To create truly transformational change, creating shared benefits for the people and the places where we operate should become the minimum expected of every company.

We believe that companies like us have a responsibility to step forward and help spearhead this trend, in a responsible way with regard for all stakeholders.

The Atlas way

Atlas Renewable Energy was conceived with sustainability at its core. Since our launch in 2017, our vision has been to accelerate the energy transition towards clean energy while driving positive change in the wider industry. For us, this meant creating a company that would positively disrupt and elevate today’s energy sector, always putting sustainability and social progress as a core pillar of our mission. This has enabled us to become one of the fastest-growing renewable energy companies while establishing meaningful, tangible commitments with the communities where we operate.

Over the past four years, however, what we mean when we talk about sustainability has evolved. For example, an initial belief in environmental impact mitigation has grown into a commitment to zero net loss of biodiversity wherever we operate.  As the conversation moves on, we believe that there is an opportunity for companies around the world to take decisive action as sustainability leaders.

Maximizing impacts

Renewable energy companies are driving the energy transition, and the environmental benefits from our activities are enormous. However, we believe that there is little point in saving carbon emissions through our solar plants without taking into account the social and governance impacts of what we do.

By adopting ESG principles of operations, companies operating within sustainable industries can provide additional value to society and better manage the risks and opportunities arising from a wider group of stakeholders – from the communities in which they operate to the workforce they employ.

At Atlas, this means taking steps to improve our own carbon footprint, including avoiding the use of paper in our offices, improving recycling schemes, and implementing measures to encourage more flexible forms of working in order to reduce emissions from commuting. We have also sought to embed and strengthen green practices in the communities where we operate. Finally, as a company focused on having a positive impact on the people we interact with and the environments we operate in, we have worked hard to strengthen diversity, inclusion, and development as a whole.

Alongside these factors, we maintain a continual focus on innovation. This increases the value and efficiency of the projects that we develop and operate. It also maximizes the value of the raw materials we use, while minimizing the overall supply of materials we need. For example, improvements to the power generation capacity of the photovoltaic panels we use will lead to a lower number of panels being used overall, reducing resource requirements and land use.

Knowledge sharing

Fortunately, companies that seek to generate far-reaching change don’t have to start from scratch. Large multinational corporations across all industrial sectors have begun to facilitate the sharing of their sustainability initiatives with their peers – and this cross-sectoral pollination of ideas means that, no matter which area a company works in, collaborating on solutions and innovations with others means they can be shared for national and international scale-up. We have recently shared our experiences in our first-ever sustainability report. 

Importantly, numerous frameworks exist to give companies a starting point. The UN Sustainable Development Goals (SDGs) are a collection of 17 interlinked global goals designed to be a “blueprint to achieve a better and more sustainable future for all”. For companies wanting to advance the SDG agenda, the job starts by acting responsibly – incorporating the Ten Principles of the UN Global Compact widely into strategies and operations, and understanding that good practices or innovation in one area cannot make up for doing harm in another. From there, businesses can find opportunities to contribute to the achievement of one – or several – of the goals.

In our case, we have focused on nine of the 17 SDGs. These are divided into our core SDGs which go to the heart of our business, and material SDGs that reflect our processes and mission:

As our sustainability strategy continues to develop, we will review the scope of our activities and consider whether we focus on additional SDGs beyond these nine.

IFC Performance Standards

The International Finance Corporation (IFC) Performance Standards are another important framework. Devised for IFC clients, they define companies’ responsibilities for managing their environmental and social risks, and include areas including biodiversity, resettlement, labor and community support.

All our assets, as well as our new projects, comply with these standards, and we have developed external initiatives that align our activities to the needs and challenges of the communities in which we operate.

In recent years, these have included:

  • An apiculture project created to strengthen beekeeping skills near our São Pedro plant in Brazil.
  • The creation of an environmental education center and nursery garden near our Sertão Solar plant, as well as additional nursery gardens near our São Pedro plant.
  • An environmental education program and accompanying nursery garden near our Sol do Futuro plant.
  • The donation of seedlings from the Umbu Gigante native plant near our Juazeiro Solar plant, which allowed the fruit produced to act as a source of income for neighboring communities, while contributing to local biodiversity.
  • The conservation of 1,229 hectares of forest and grassland habitat to protect local species near our project being developed in Campeche, Mexico.
  • Our partnership with The Pale Blue Dot, a Mexican organization that promotes educational programs through the use of technology in schools and community centers.
  • The Atlas female workforce program, which improves local women’s access to employment, entrepreneurial opportunities and leadership positions across the corporate value chain.

By engaging with communities in this way, we have been able to work towards the implementation of more sustainable outcomes and succeed in our goal to aid the preservation of diverse ecosystems.

Pick a metric and get started

For companies beginning their sustainability journey, deciding where to begin can often be overwhelming. Over our journey, we have discovered that targeted initiatives, focused on specific audiences, create the most tangible results. For example, one of our signature focuses has been on women in the workforce. The energy industry is overwhelmingly male-dominated, with numerous barriers to access for women.

To tackle this, we have introduced various evidence-based measures, such as:

  • Neutral language: We do not use gender-specific pronouns in our job adverts or related communications. We also ensure the language used is balanced to increase the appeal of each position and reduce the chance of missing out on high-caliber applicants.
  • Equal weighting of qualifications: We recognize the qualifications of every candidate, regardless of the institution or country in which qualifications or experience is attained.
  • Promoting access to under-represented groups: Where candidates hold similar or equal qualifications and experience, we will also consider whether any candidate is from an under-represented group.
  • Gender equity: We consider at least one female applicant within the final stage of an application process. To achieve this, we work to ensure that our job adverts do not include gendered language that may act as a disincentive for potential female applicants.

As a result, since 2017, we have more than doubled the proportion of women working in our company to 40%. This has moved us far above the energy industry average, and we are now aiming for full parity at 50%. Our focus on women applies just as much outside of Atlas as inside it, and in 2020 we launched our female workforce program “We are all part of the same energy”, which focuses on the communities where we operate. This initiative was created specifically to improve local women’s access to training on technical skills, new employment and entrepreneurial opportunities, and their leadership potential in corporate value chains.

Making a difference

Global ESG challenges, from climate, water and food crises to inequality and discrimination, are in need of solutions that the private sector can deliver. With sustainability firmly on the global agenda, no company – not even one operating in a climate-positive industry – can afford to become complacent about its activities. But with numerous frameworks available and the potential for peer-to-peer collaboration and knowledge sharing, we believe that generating sustainable change at scale is not only possible but inevitable.

In partnership with Castleberry Media, we are committed to taking care of our planet, therefore, this content is responsible with the environment.*

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COP26: What corporations should know

The 2021 United Nations Climate Change Conference, also known as COP26, is being held in the UK between October 31 and  November 12, 2021. The event, which will bring parties together to accelerate action towards the goals of the Paris Agreement and the UN Framework Convention on Climate Change, will shape the direction of climate action for many years to come, and businesses need to engage. 

What is COP26?

The 26th UN global climate summit is a worldwide meeting on climate change and how nations intend to address it. It brings together the signatories of the UN Framework Convention on Climate Change (UNFCCC) – a convention agreed on in 1994. This year, more than 190 world leaders are expected to attend, together with tens of thousands of negotiators, government representatives, businesses and citizens for twelve days of talks. It has been labeled by Alok Sharma, this year’s COP president, as a “make or break” moment for keeping the objectives of the Paris Agreement –signed at COP21 – within reach.

While the commitments set out in the Paris Agreement were far-reaching, they do not come close to limiting global warming sufficiently to avoid runaway climate change, and the window for achieving this is closing. Every five years, Paris Agreement signatories are expected to submit new, and more ambitious nationally determined contributions (NDCs) on emissions reductions. COP26 will be the first time this happens, and hopes are that as many governments as possible submit new NDCs that will keep global warming well below the two degrees Celsius ceiling laid out at COP21, and preferably at 1.5 degrees.

Ahead of the meeting, British Prime Minister Boris Johnson has called on all countries to commit to achieving net-zero emissions by 2050, and for the G20 countries to come forward with stronger 2030 NDCs. So far, 86 countries and the EU27 have submitted new or updated NDCs to the UNFCCC, with others pledging new targets that are yet to be submitted officially.

What are the key goals of COP26?

“Securing a brighter future for our children and future generations requires countries to take urgent action at home and abroad to turn the tide on climate change,” says the UK prime minister. “It is with ambition, courage and collaboration as we approach the crucial COP26 summit in the UK that we can seize this moment together, so we can recover cleaner, rebuild greener and restore our planet.”

To this end, the conference will aim to achieve four main objectives:

Secure global net-zero by mid-century and keep 1.5 degrees within reach

To deliver on this target, countries will need to accelerate the phase-out of fossil fuels, speed up the switch to electric vehicles, and encourage investment in renewable energies.

Adapt to protect communities and natural habitats

Climate change is already a fact of life, and at COP26 commitments will be made around protecting and restoring ecosystems, building natural disaster defenses and warning systems, and promoting resilient infrastructure and agriculture to avoid the loss of homes, livelihoods and lives.

Mobilize finance

Delivering the first two goals will require trillions of dollars in public and private sector finance. At the conference, international financial institutions, as well as developed countries, will be expected to make good on their promise to mobilize at least US$100bn in climate finance per year.

Boost collaboration

The world can only rise to the challenges of the climate crisis if everyone works together. Countries need to manage the increasing impacts of climate change on their citizens’ lives; private finance needs to fund technology and innovation, and companies need to be transparent about the risks and opportunities that climate change and the shift to a net-zero economy pose to their business.

What COP26 means for businesses

Although an ever-growing list of companies has signed up to climate change mitigation and reduction, the vast majority of corporations around the world still haven’t made official commitments to decarbonize.

With strong statements and ambitious commitments expected at COP26, it’s time for businesses to get their net-zero plans off the ground.

What’s more, the outcomes of COP26 will likely give companies certainty about the conditions in which they will be operating over the next few decades – be that carbon taxes, restrictions on fossil fuel use, or new net-zero legislation.

Acting now means that companies can gain a leading edge on what’s to come, as well as becoming part of the conversation as policies are decided. Several large companies are already doing this: in May 2020, 155 firms — with a combined market capitalization of over $2.4 trillion — signed a statement urging governments around the world to align their COVID-19 economic aid and recovery efforts with current climate science. It is now time for the rest of the corporate world to follow.

How businesses can act now

Define your path to net-zero

Companies have the opportunity to start taking ambitious climate action now with science-based emissions reduction targets. Leading companies are already proving that a 1.5°C-compliant business model is possible, and there is evidence that these companies will be best-placed to thrive as the global economy undergoes a just transition to a net-zero future by 2050.

Business Ambition for 1.5°C is a campaign led by the Science Based Targets initiative in partnership with the UN Global Compact and the We Mean Business coalition. It was launched in 2019 by a global coalition of UN agencies, business and industry leaders. It enables business leaders to publicly commit their companies to a net-zero, 1.5°C target and be recognized in the lead up to COP 26 as making a critical contribution to limiting the worst impacts of climate change.

Assess your climate risk

The near-inevitability of carbon pricing as well as growing pressure on firms to report on climate risk mean that this needs to become top of mind for companies across sectors. 

The Task Force on Climate-related Financial Disclosures (TCFD) provides a framework for companies to assess potential climate-related impacts using scenario analysis, effectively evaluating risks to their business, suppliers, and competitors.

Companies that don’t have a handle on their climate risk are in jeopardy: in his recent 2021 letter to CEOs, Larry Fink, BlackRock’s CEO announced that companies should disclose climate-related risks in line with the TCFD recommendations, adding that the firm would now implement a “heightened-scrutiny model” in its active portfolios as a framework for managing holdings that pose significant climate risk, including flagging holdings for a potential exit.    

Make the switch to renewable energy

Currently, over 80% of the energy used in the world comes from fossil sources, and emissions from the energy sector account for around two-thirds of global greenhouse gas emissions. This can’t continue.

A number of leading companies can see what is coming over the horizon and are taking steps to reposition themselves. Making the switch from polluting fossil fuels to clean energy sends a strong signal that, when it comes to fighting climate change, businesses mean business.

In July last year, Microsoft along with AP Moeller-Maersk, Danone, Mercedes-Benz, Natura & Co., Nike, Starbucks, Unilever, and Wipro created the Transform to Net Zero initiative, with the tech firm committing to develop a portfolio of 500 megawatts of solar energy projects in under-resourced communities in the US. 

Meanwhile, Google pledged in September to achieve 100% renewable energy by 2030, while Apple’s newly-launched Supplier Clean Energy Program has seen 71 manufacturing partners in 17 countries commit to 100% renewable energy for the tech giant’s production as it commits to transitioning the electricity used across its entire manufacturing supply chain to clean sources by 2030.

Furthermore, growing numbers of influential, globally recognized companies have committed to 100% renewable power as part of the RE100 initiative. 

But for the objectives of COP26 to be met, every single company around the world needs to start thinking seriously about its energy transition strategy, and take steps now to execute upon this.  

How Atlas can help

If businesses don’t keep a close eye on the issues discussed at COP26, they risk being consigned to history. COP26 will result in an increased political impetus to meet ambitious climate targets. The direction of travel is clear: the net-zero future is imperative, and companies must act now.

Atlas Renewable Energy was conceived with sustainability at its core. It develops, builds, finances, and operates clean renewable energy projects across the Americas that enable companies to power their operations sustainably.

With a range of services, from renewable power purchase agreements (PPAs) to renewable energy certificates (RECs), Atlas helps large energy consumers across industries manage their transition to net-zero and track their performance against long-term environmental and emissions targets.

To find out more about Atlas Renewable Energy’s approach and how it can help bring your company in line with the objectives of COP26, please contact: contacto@atlasren.com

In partnership with Castleberry Media, we are committed to taking care of our planet, therefore, this content is responsible with the environment.

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LAGGARDS AND LEADERS: CLOSING THE GAP IN THE TRANSITION TO RENEWABLE ENERGY

Renewable energy is now competitive with fossil fuels in many markets, and an increasing number of companies worldwide are making the switch to cleaner power. But while some businesses have excelled in their transition to green electricity, others still have some way to go.

After years of slow progress, business demand for renewable energy has now reached fever pitch. According to recent figures from the Climate Group and CDP, the international non-profit groups which run RE100 – the coalition of major businesses committed to purchasing 100% renewable electricity – companies’ demand for renewable electricity has now surpassed that of the G7 countries. 

“But many hundreds more big corporates are yet to take this relatively easy step towards net zero carbon,” said Sam Kimmins, Head of RE100 at the Climate Group in a recent statement. “To meet global climate targets, and to remain competitive in a world driven by cheap, clean electricity, it quickly needs to become the norm to power your business with renewables.”

At Atlas, we’ve seen how pioneers in various industrial sectors moving towards shifting to renewables quickly cause a ripple effect, with numerous companies swiftly following them. While one of the main driving factors behind companies’ decisions to move away from fossil fuels is to reduce the environmental impact of their business operations, our corporate clients also report bottom-line advantages, from more predictable energy costs brought about by our long-term corporate power purchase agreements (PPAs), to strengthened customer relationships and brand differentiation.

Last year, despite the disruption caused by the pandemic, research by BloombergNEF found that corporations purchased a record of 23.7GW of clean energy through PPAs, up from 20.1GW in 2019 and 13.6GW in 2018.

“More than ever before, corporations have access to affordable clean energy at a global scale. Companies no longer have an excuse for falling behind on setting and working towards a clean energy target,” said Jonas Rooze, lead sustainability analyst at BloombergNEF.

All in all, in 2020 clean energy contracts were signed by more than 130 companies, in sectors ranging from oil and gas to big tech. As more firms go green, this is not only a way to demonstrate corporate social responsibility but also to improve financial performance and reduce the carbon footprint at a time when governments are setting ever more ambitious targets to meet the objectives of the Paris Agreement.

However, although some industries are leading the way in converting their energy consumption to renewable sources, others could be doing better.

Food processing and production

According to the Food and Agriculture Organization (FAO), the food sector accounts for around a third of the world’s total energy consumption. The two most energy-intensive activities are found within agricultural production and processing and are dependent largely on the use of fossil fuels. Reducing direct carbon emissions by moving to cleaner energy is an urgent task for the industry and one that several companies have started to take on.

In July this year, PepsiCo achieved its goal of using 100% renewable energy across all operations in Mexico, its second-largest market. This came less than a year after the company reached a similar milestone in the United States, its largest market. The company plans to source 100% renewable electricity across all of its company-owned and controlled operations by 2030, and 100% renewable electricity across its entire franchise and third-party operations by 2040. If it meets its goals, the company calculates it could reduce approximately 2.5 million tons of GHG emissions by 2040, the equivalent of taking more than half a million cars off the road for a full year.

To do this, it is employing several solutions, including PPAs that will support the development of new projects such as solar and wind farms around the world, as well as purchased renewable energy certificates (RECs).

Another company looking to use more renewable energy is Nestlé. As part of its 2050 net-zero ambition, unveiled in 2019, it has pledged to continue to ramp up its use of renewable electricity to reach 100% by 2025, up from 34.5% in 2018, and says it plans to use PPAs, green tariffs, RECs and on-site production to do so.

These companies, alongside peers such as Diageo and Mars, are taking bold steps towards helping to drive the global transition to clean power – and this looks likely to win them new customers.

More and more, people are demanding cleaner, more sustainable energy. A survey conducted in the US in 2019 by the Pew Research Center found that 77% of respondents believe that developing “alternative energy” is a more important priority right now than producing more fossil fuels in order to reduce the effects of climate change. As consumers increasingly vote with their wallets, companies that are aligned with their values are positioned to take market share from companies that don’t move with the times.

Fortunately, companies within the food industry that haven’t yet taken steps towards cleaning up their electricity use aren’t too late. The availability of sourcing models for renewable electricity has advanced significantly in recent years, and there are numerous options available for companies of all types.

Pulp and paper

The pulp and paper industry was arguably one of the most unlikely beneficiaries of the Covid-19 pandemic, experiencing skyrocketing demand amid the increased need for personal hygiene products, food packaging products, corrugated packaging for online shopping deliveries, and other paper-based materials. Like most major manufacturing operations, papermaking is an energy-intensive endeavor, and as paper-based production increases, the industry may fail to achieve its emission reduction target due to the rapid growth of greenhouse gas emissions.

In a recent report, the International Energy Agency (IEA) highlights the sector as needing “more effort” if it is to reduce its emissions. Among its recommendations are for the industry to increasingly recover and use pulp and paper production by-products such as black liquor to displace a portion of fossil fuel use.

However, simply using more biomass energy won’t be enough to turn the sector green, the report says. It calls for companies to pursue the use of other renewable energy sources, particularly for recycled production, for which natural gas tends to be employed because biomass by-products are not readily available.

Textiles and garments

The fashion industry is another sector that has an enormous opportunity to harness the power of renewables in order to drive a more sustainable future. Every stage of the textile industry’s supply chain is energy-intensive, from processing yarn, producing fabric, and fabricating textiles, to transporting and selling clothes to customers, and several major fashion brands are now looking at reducing greenhouse gas emissions by powering all their global operations with renewable energy.

As part of the global RE100 initiative, well-known brands from H&M to Nike, Burberry and Ralph Lauren have already committed to sourcing 100% of their electricity from renewable suppliers by 2050 at the latest, and some are also running programs to ensure their suppliers also reduce their greenhouse gas emissions by switching to green energy.

Kingwhale, a Taiwan-based textile mill, recently joined the RE100 initiative, pledging to achieve 100% renewable electricity by 2040, but it’s the only Asia-Pacific-based textile manufacturer to do so.

Within the garment industry, there is a growing divide between renewable energy transition pioneers and their less energy-efficient peers, and much as scandals over labor practices within textile supply chains have damaged the image of brands in recent years, companies that don’t operate more sustainably in terms of energy use and consumption risk alienating their customers.

Closing the gap

Across some of the world’s biggest industries, a clear gap is emerging between those companies that have already made progress in the energy transition, and those that are yet to take the first step. Bringing the performance of the laggards in line with the pioneers will be crucial if the objectives laid out in the Paris Agreement are to be met – but it’s also a matter of survival. In the post-Covid world, consumers are increasingly focused on the sustainability credentials of the companies they buy from, and making the switch from polluting fossil fuels to clean energy sends a strong signal that, when it comes to fighting climate change, businesses mean business.

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MAKING CIRCULAR ECONOMY HAPPEN

The idea of the circular economy has been gaining political and social currency recently as governments, companies, and citizens alike make plans for a greener, more sustainable recovery from Covid-19. In this factsheet, we take a look at what makes a successful circular economy, and why renewable energy is a vital component.

What is a circular economy?

Since industrialization, the dominant economic model around the world has been linear: raw materials are extracted, they are manufactured or consumed as a product, and then when they reach the end of their useful life, they are thrown away. This take-make-waste system places enormous strain on the environment by increasing the consumption of finite resources and creating huge quantities of polluting landfills.

In a circular economy, there is little to no waste and as much reuse and recycling as possible. When a product reaches the end of its life, instead of throwing it away, its materials are kept within the economy and converted into new materials that can be used again and again, creating further value.

Why do we need a circular economy?

The world’s largest economies are falling behind on commitments to meet the goals of the Paris Agreement, which aims to limit global warming to 1.5ºC. Despite pledges made recently during the US-led Climate Summit, research carried out by BloombergNEF shows that, across the world, not enough is being done to limit climate change, and unless something changes fast, we risk reaching the point of no return.

With existing technologies, we have the ability to address around 55% of global greenhouse gas emissions. These are emissions that come from the electricity and heat we use in buildings, from our electricity grid, and from transport.

But that’s only half the story.

According to the latest data, the production of materials we use every day accounts for 45% of the world’s total CO2 emissions, and only 8.6% of resources that enter the global economy are cycled back into it. Moving to a circular economy would reduce pressure on the environment, decrease pressure on the supply of finite raw materials, and lead to more innovation. What’s more, the World Economic Forum estimates that the transition to a circular model could be worth US$1tn to the global economy by 2025, and create 100,000 new jobs.

So far, climate pledges have focused on reducing the carbon intensity of the traditional economic model, but it’s clear that this won’t be enough. Adopting a circular economy framework today in steel, plastic, aluminum, cement, and food would remove 9.3 billion tons of greenhouse gas emissions by 2050. This is equivalent to eliminating current emissions from all forms of transport globally and would put the world well on track to a net-zero future.

What role does renewable energy play in a circular economy?

Reduce-reuse-recycle is only part of the picture. A truly circular economy has to be underpinned by a transition to renewable energy sources – for two reasons.

The first is arguably the most obvious: if the energy we use to power the overall system comes from finite resources that create waste, it will never be a real circular economy.

The second, though, is more complicated. Some evidence suggests that, although the circular economy is based around energy efficiency and a reduction in inputs, collecting, sorting, processing, and restoring materials back to reusable forms takes more energy than using virgin raw materials, which means that, in some areas at least, we may need more energy to make this happen – which is why it’s vital for the energy we use to come from clean, 100% renewable sources.

What role can companies play in fostering the transition to a circular economy?

In recent months, a growing number of international brands have begun to harness the power of circular supply chains and manufacturing. Last year, Nike launched an exploratory footwear collection made from 85-90% factory and post-consumer waste, while Ikea began a large-scale furniture buyback program on Black Friday, after committing to becoming 100% circular by 2030.

It’s not just consumer goods brands. We’re starting to see circular construction sites, where companies reuse existing local materials, transform them to extend their lifespan, and pool resources. In the automotive sector, we’re seeing OEMs explore ways of designing sustainable vehicles with recycled and recoverable materials, and looking to reuse batteries from electric vehicles. Even in the mining sector, companies are investigating ways of extracting resources from waste streams to increase the environmental viability of their operations.

All of these gradual adjustments are starting to combine into a systemic shift that builds long-term resilience, increases economic opportunities, and provides environmental and societal benefits.

The circular economy isn’t a ‘nice-to-have.’ To achieve UN Sustainable Development Goal 12 on sustainable consumption and production patterns, businesses must help it to become a reality.

Why is public trust vital in achieving a circular economy?

Trust is a very important factor in getting people to opt for change. We’ve seen this as part of the ongoing energy transition: the companies and people we speak to at Atlas Renewable Energy want to be certain that, by moving to renewables, they will not experience any loss of quality or reliability in their energy supply. But it goes further than that: generating public trust in the positive impact of any change – be that transitioning the grid to renewable sources of power or transforming the economy from a linear to a circular model – is vital to success.

When it comes to simple actions, such as recycling, the costs and the benefits tend to be in the same domain – the people who perform the activity are the same people who benefit from it. This makes these actions easy for the general public to get on board with. 

However, when it comes to wider trade-offs between local and regional or even global effects, it’s a little more difficult to get people to immediately understand the reasons behind the choices being made. Sometimes, reality can be counterintuitive, which can lead people to assume that positives – or negatives – exist, when in fact they don’t.

Fortunately, a well-established and internationally recognized framework to achieve this already exists. Life Cycle Assessment (LCA) is a tool we already use within the renewable energy industry, and by applying it to the circular economy, it is possible to test the impacts of circular business models, validate assumptions and get feedback for improvement, as well as help define targets and indicators.

Throughout the work we have done in communities, with different industries, and with numerous stakeholders, our experience has always been that we need to be able to prove our assertions in order to achieve buy-in, and we’ve done this time and time again through a consultative approach. 

By using science-backed methodologies such as LCA, companies and governments can be transparent about the upsides and downsides of transitioning to a circular economy, and enable the public to make evidence-based decisions on whether or not to support an initiative.

The time to shift to a circular economy is now

Our inefficient linear model is pushing our planet to the brink of a climate crisis, and depleting the resources we need to support our communities to build back better after the pandemic. It’s time to move towards a circular economy, with renewable energy as a central pillar. 

When it comes to creating this new, more sustainable future, no one company or even country can do it alone. Those at the forefront of the circular economy must continually measure their progress and clearly communicate the results of their efforts. By doing this, they not only build trust but also encourage everyone else to follow suit.

In partnership with Castleberry Media, we are committed to taking care of our planet, therefore, this content is responsible with the environment.*

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WHY GREEN HYDROGEN IS PART OF THE ENERGY MATRIX OF THE FUTURE

For the first time in history, this year’s Olympic flame, which burned at Tokyo’s National Stadium Olympic Cauldron in the Games’ opening and closing ceremonies, was sustained by hydrogen.

The gas was created through the electrolysis of water using solar power, creating a truly green fuel that creates no emissions – unlike the propane and butane that are traditionally used at the Olympics.

As awareness grows around the use of so-called green hydrogen, Daniel Garcia, Commercial Senior Manager at Atlas Renewable Energy, explains the benefits of this fuel, and how it can be part of the energy matrix as the world looks ahead to a cleaner, more sustainable future.

What makes green hydrogen “green”?

Hydrogen fuel is made by separating the gas from fossil fuels, or splitting it out from water. Although today, hydrogen is already being used on an industrial scale, the electricity used to produce it is almost entirely supplied from natural gas and coal. As a result, today, hydrogen fuel production is currently responsible for 830 million tons of CO2 emissions per year – which is the same as the CO2 emissions of the United Kingdom and Indonesia combined.

This is clearly not sustainable, which is why we need green hydrogen. Produced through renewable energy, green hydrogen is extracted from water via electrolysis, making it a zero-carbon fuel. As the  International Energy Agency stated, thanks to declining costs for renewable electricity, in particular from solar PV and wind, there is now growing interest in green hydrogen, and as a result, we believe that green hydrogen can make a significant contribution to the clean energy transition.

In what industries and applications can green hydrogen be used?

One of green hydrogen’s most suitable applications is for processes where hydrogen is already required. An example of this is in oil refineries, where hydrogen is used in the processing of most refined products – it’s normally obtained from the natural gas that is already extracted from the wells. Each ton of H2 produced with natural gas produces 9.3 tons of CO2, so replacing this with onsite green hydrogen production could have a dramatic impact on emissions.

Fertilizer production is another key area for the application of green hydrogen. Currently, fertilizer production facilities separate hydrogen from natural gas and combine it with nitrogen to make ammonia, but we’re starting to see the fertilizer industry begin to use electricity from photovoltaic plants to split water into oxygen and hydrogen instead, which is an encouraging sign.

One of the most interesting possibilities is in long-haul transport. Although the trend is towards the electrification of transport, the available technology currently covers short to medium range journeys of up to around 500km. Hydrogen fuel cells have been used to send rockets into space since the 1950s, and in the heavy-duty transport industry, hydrogen will likely be the solution for long-range mobility, particularly in sectors such as mining. 

Is green hydrogen competitive with fossil fuels?

When we think about green hydrogen’s competitive advantage versus fossil fuels we have to take two main factors into consideration: the price of the fuel and the climate benefit. 

Regions with high fossil fuel costs and abundant renewable resources are the most suitable for green hydrogen to replace fossil fuels at first. For example, in the US, there are numerous regions with very good wind and solar power resources, however, because of low shale gas prices it is difficult for green hydrogen to compete against fossil fuels on price alone. In Europe meanwhile, not only is there abundant wind energy but natural gas prices are also far higher, which means green hydrogen is a more competitive option.

The climate benefit is a much easier sell. Green hydrogen generates no emissions, and as governments around the world set net-zero targets for industries, and amid the growing trend towards the implementation of carbon taxes, we think that green hydrogen, alongside other renewable energy sources, will become an obvious choice. 

What does the growth in green hydrogen mean for the renewable energy sector?

According to research by Goldman Sachs, green hydrogen could supply up to 25% of the world’s energy needs by 2050. We’ve already seen numerous countries, from Australia to Chile, Germany, the EU, Japan, New Zealand, Portugal, Spain and South Korea, publish national hydrogen strategies, and the fuel has a promising future in cutting emissions from the world’s most carbon-intensive industries.

Last year, the United Nations launched the Green Hydrogen Catapult Initiative in a bid to increase the production of green hydrogen 50-fold in the next six years. Replacing all of the world’s non-green hydrogen with green hydrogen would require 3,000 TWh per year from new renewables, boosting demand for solar and wind projects around the world.

What is the future outlook for the green hydrogen market? 

Green hydrogen is far from a niche solution. We believe it’s worth paying attention to, because it solves important CO2 emissions appropriately and effectively. Its growth curve has only just begun: a large part of what makes green hydrogen competitive is the cost of renewables and its efficiency, and because we haven’t reached the full potential yet in these aspects, we believe that green hydrogen will become increasingly more competitive every year.

In the short term, we expect to see a proliferation of on-site green hydrogen solutions, in areas such as natural resources and petrochemicals. Some other solutions where it can be mixed with other fuels, such as natural gas, will also emerge in the medium term. The biggest challenge for green hydrogen is to achieve competitive transportation costs, and then is when it will reach its maximum potential in terms of greenhouse emissions reduction.

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WHY COVERING THE ENERGY NEEDS OF DIGITALIZATION SUSTAINABLY IS IMPORTANT

When the world locked down it also logged on, and the rapid digital adoption brought about by the Covid-19 pandemic will continue into the recovery – and beyond. But powering the new digital normal sustainably means taking a long hard look at the energy we use, and as companies are increasingly forced to report on climate emissions all the way along their value chains, they can no longer afford to ignore the environmental impact of the new digital economy.

Covid-19 turned digitization from a “nice to have” to a “must have”, and many of the quick fixes humanity came up with to keep the economy going during pandemic lockdowns look to be here for the long haul.

As Microsoft CEO Satya Nadella put it at the beginning of 2020, two years’ worth of digital transformation happened in two months – and the momentum has continued. Millions of people around the world have been introduced to online services including mobile banking, telemedicine, food delivery, online education, e-commerce, digital streaming services, and social media – and they don’t want to go back.

According to a global survey of executives conducted by McKinsey, companies around the world have sped up the implementation of remote working and collaboration capabilities by as much as a factor of 43 compared to business-as-usual estimates without the crisis. They’ve also accelerated the adoption of digital technologies for advancements in operations and business decision-making by a factor of 25.

And even though many businesses are now implementing phased returns to the office, more flexible working structures are to be expected in the future, with a sizeable proportion of employees saying they want to work from home more often. 

The pandemic has fundamentally changed the way we work, shop, and conduct our day-to-day lives. 

Electric clouds

This flight to digital means a huge upswing in investment into Information and Communications Technology (ICT). A recent report by KPMG found that two-thirds of global organizations have accelerated their digital transformation strategy, with 63% boosting their digital transformation budget. As a result, according to research by Western Union and Oxford Economics, the value of ICT services is projected to increase by 35% by 2025.

These ICT services – networks, servers, storage, and applications – are overwhelmingly based in the cloud. Take-up of cloud computing is forecast to increase exponentially, from US$1.3bn in 2019 to US$12.5bn by 2030, according to BloombergNEF.

This new, cloud-based digital economy is fueled by electricity – and lots of it. Just one data center can use enough electricity to power 80,000 US households, and collectively, these spaces currently account for approximately 2% of total US electricity use.

The carbon emissions from tech infrastructure and the data servers that enable cloud computing are now greater than those caused by air travel pre-Covid, according to a report from The Shift Project. And with IT-sector-related electricity demand expected to increase by nearly 50% by 2030, the French think tank says these emissions could continue to grow at a rate of 6% every year. 

Big tech goes green

Last September, Google pledged to power all of its data centers and campuses with “carbon-free energy” – such as solar – 24 hours a day, by 2030. Microsoft has made a similar commitment – saying that it will be “carbon negative” by 2030. Amazon, which runs the AWS Global Cloud Infrastructure that provides the backbone for much of the world’s websites, said that it, too, will aim for “net zero” by 2040.

However, not all of the pledges being made by technology service providers are equal. There are many ways to reach “net zero”, but not all of them have an equivalent impact on climate change.

To tackle this, a growing number of tech service providers have committed to power purchase agreements (PPAs) that include an additional requirement. These not only ensure the generation of new renewable supply but also come with a certificate of origin stating that 100% of the energy used within the facility is derived from renewable sources.

This isn’t just good for the environment – it’s good for costs, too. Ultimately, renewable energy is now cheaper than fossil fuels in most markets, and because electricity is the main outlay for data center service providers, by using solar or wind power, they can keep costs down in the face of soaring demand.

Scope 3 emissions

Oftentimes, data centers are sited many miles away from their end-users. But this doesn’t mean that companies can afford to ignore them. The new Scope 3 emissions reporting requirements mean that corporations now need to calculate their entire greenhouse gas footprints from everything involved in their business – including upstream suppliers and downstream functions.

If a business uses technology – and, thanks to the rapid digitalization brought about by Covid, this means almost every business – now needs to account for the emissions associated with the companies that deliver their software and services.

Numerous cloud computing services providers have begun to provide insights into the carbon emissions of their infrastructure, to help companies make more sustainable decisions. The Microsoft Sustainability Calculator, for example, enables companies to quantify the carbon impact of each Azure enrollment, while Google Cloud has launched a new Carbon-Free Energy Percentage (CFE%) tool that lets users see which data centers are cleanest and allocate workloads, where possible, accordingly.

A sustainable digital future

At Atlas, although we accept that the digital economy will require significantly more energy in the future, we don’t believe it necessarily has to lead to more CO2 emissions. There is another way – and, as we’ve discussed already, some tech leaders are already charting a path forward.

As more and more companies join the post-Covid digital revolution, it is vital that they be aware of the climate impact this entails, and take steps to reduce it where possible. By selecting technology service providers that are transparent about their energy usage and that have committed to using 100% renewable electricity, companies can play a role in ensuring that the new digital economy is as sustainable as possible.

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ELECTRIC VEHICLES AND RENEWABLE ENERGY: A PERFECT MATCH

Electric vehicles (EVs) are one of the most promising technologies for reducing emissions in global transportation, but the benefits they bring depend on the provenance of the power they run on. Today, too few EVs are powered by renewable energy. For them to be a truly green option, this has to change.

The EV revolution is upon us. According to the International Energy Agency (IEA), the number of electricity-powered passenger vehicles on the world’s roads could surpass 250 million by 2030, while the International Renewable Energy Agency (IRENA) estimates that electric buses and other mass transit vehicles could number well over 10 million.

Because they have an electric motor instead of an internal combustion engine, EVs emit no exhaust from a tailpipe, which means that, unlike traditional vehicles, they don’t pump carbon dioxide, ozone, and particulate pollution into the air we breathe.

This is important, because transport accounts for around one-fifth of global emissions, with road travel accounting for fully three-quarters of that amount. The majority of this comes from passenger vehicles – cars and buses – which contribute 45.1%. The other 29.4% comes from trucks carrying freight.

Moreover, this number is only set to increase, as population growth and demographic shifts drive ever more demand for road travel – not to mention the rise in e-commerce pushing up the need for freight and last-mile delivery.

With the World Health Organization (WHO) estimating that air pollution causes one in every nine deaths worldwide, transforming our global transportation matrix to one run by EVs would all but guarantee a safer and greener future for everyone – or would it?

Dirty power

EVs need anywhere between 24 and 50kWh of electricity to travel 100 miles, and this electricity comes from the grid. With a US Department of Energy study showing that increased electrification will boost national consumption by as much as 38% by 2050, in large part because of electric vehicles, in some cases, EVs could result in substantial greenhouse gas (GHG) emissions or even help extend the life of fossil fuels, if charged primarily with fossil fuel-generated power.

In fact, a recent study by China’s Tsinghua University found that EVs charged in China – where a majority of electricity comes from coal-fired power plants – contribute two to five times as much particulate matter and chemicals versus gas-engine cars. 

Essentially, unless the electricity that powers EVs is clean, EVs can never be a fully green option.

With the vast number of EVs that are projected to come online in the coming years, it is crucial that both users and utilities find a way to charge them with renewable energy sources. Indeed, EVs might be the key to linking the renewable power and low-carbon transport sectors, for the good of everyone.

Making EVs the largest renewable buyers

By 2030, the amount of electricity needed to power all the EVs will be a whopping 640TWh. To put that into perspective, the over 300 global corporations that have signed the RE100 pledge to go 100% renewable purchase in aggregate around 220TWh a year – or just over a third of that amount. 

This creates a major opportunity to position EVs as one of the biggest buyers of renewable electricity globally. Not only that but the electricity needs of EVs could be harnessed to drive the roll-out of more renewable capacity around the world.

The model already exists: corporate procurement of renewable energy via bilateral power purchase agreements (PPAs) has created significant voluntary demand for new renewable energy projects worldwide. Last year, corporations purchased a record 23.7 GW of clean energy, up from 20.1GW in 2019 and 13.6GW in 2018, according to new research published by BloombergNEF (BNEF) – and this came in spite of the disruption caused by the Covid-19 pandemic and the ensuing global recession.

Through PPAs, EV original equipment manufacturers (OEMs), charge point operators, electric mobility service providers, and the growing number of companies that are committing to switching their vehicle fleets over to EVs can both develop seamless green solutions for the future, as well as facilitate the development of new renewable energy projects – which will, in turn, bring the world closer to meeting the Paris Agreement targets.

Not just the electricity they run on

It isn’t only the juice that powers the vehicles’ batteries that’s important. Half of the lifecycle emissions from the lithium batteries in EVs come from the electricity used to assemble and manufacture them, which means that the electricity mix at OEM facilities is also a key part of the equation. A recent study by IVL, the Swedish environmental institute, found that lithium batteries produced in regions with a zero-carbon grid had emissions of 61kg of CO2 equivalent per kWh of battery capacity (CO2e/kWh). This figure more than doubles – to 146kg – when the electricity used in battery manufacture comes from fossil fuel.  

The climate benefit of EVs, therefore, doesn’t just depend on how green the electricity used to charge their battery is, but also on the carbon intensity of the electricity used to make that battery – creating yet another imperative for EV manufacturers to switch to renewable energy. 

A stable grid

The rise in the adoption of EVs can also drive the growth of renewable energy in other ways. Private cars spend 95% of their time parked, and energy planners are looking at ways to utilize this dead time to solve one of the biggest problems for scaling up renewable grids: stability.

“EVs at scale can create vast electricity storage capacity,” says Dolf Gielen, director of IRENA’s Innovation and Technology Centre. “Smart charging, which both charges vehicles and supports the grid, unlocks a virtuous circle in which renewable energy makes transport cleaner and EVs support larger shares of renewables.”

The technology to make this happen is still in its infancy – so far, the Nissan Leaf is the only mass-production EV on the market that enables vehicle-to-grid (V2G) charging. However, at Atlas we’re pleased to see more OEMs starting to consider this capability: for example, Hyundai, Kia, and Lucid all plan to include it in future vehicles.

With good planning and the right infrastructure, EVs can reduce emissions, replace polluting vehicles, and boost the roll-out of renewable energy infrastructure, and, when parked up and plugged in, act as battery banks, stabilizing electric grids powered by renewable solar energy. For renewable energy providers such as Atlas, this gives us the opportunity to provide ever-increasing amounts of clean electricity to a growing number of industrial sectors.

A driver of electrification 

As governments around the world unveil plans to end the sale of gasoline and diesel vehicles, it won’t be too long until electric vehicles are the mainstay of both public and private transportation. From privately-owned electric cars to commercial taxi fleets and self-driving electric buses, EVs are fast redefining the market. 

What’s really exciting about this is what it means for overall electricity demand. IEA projections show that global electricity demand will grow by more than a third by 2040, mainly due to the adoption of EVs, which will take the electricity demand for transport from pretty much nothing to 4,000 TWh a year. This raises electricity’s share in total final energy consumption from 19% in 2018 to 31% in 2040, overtaking oil and leaving coal in the dust. 

At Atlas, we see this as an unprecedented opportunity to decarbonize the energy matrix. As EVs drive electrification, ensuring that this energy comes from renewable sources will take us another step closer to slashing power sector CO2 emissions and ensuring a more sustainable future.

EVs are here to stay, but for them to be truly a green option for the future of transportation, it is vital that we don’t miss the chance to link them with renewable energy. At Atlas, our bilateral PPA structure means that we can assist OEMs, charging infrastructure providers, and battery manufacturers in ensuring that EVs are a real green proposition, end to end. 

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