Over the past several years, investors have increasingly focused on clean energy as a way for companies to mitigate climate risk and take advantage of opportunities as we transition to a low-carbon economy. In the absence of strong legislative action, corporate commitments are crucial in reaching the levels of decarbonization necessary to keep warming under 1.5°C .  

Clean energy—renewable energy procurement coupled with energy efficiency measures—is a promising avenue for shareholder engagement. In coordination with the Ceres Investor Network, investors have filed resolutions with high-emitting companies across several sectors, asking them to report on the feasibility of setting clean energy goals. 

The business case for clean energy is clear. The cost of renewable energy continues to fall. According to a recent International Renewable Energy Agency (IRENA) report, unsubsidized renewables are “frequently less expensive than any fossil-fuel option.” Companies are increasingly taking advantage of the opportunity to cost-effectively reduce emissions. Bloomberg New Energy Finance reports that corporate renewable energy procurement has more than tripled since 2017, with over 100 companies purchasing 19.5GW of renewable energy in 2019. 

Tech companies like Google and Facebook are by far the largest purchasers, but other sectors also stand to benefit. Industrial firms like 3M, BMW, Dalmia Cement, and General Motors have committed to powering their operations with 100 percent renewable energy.  Corporate commitments such as these set the bar for their peers and signal demand to utilities, building support for the increased investment in renewables necessary to prevent catastrophic warming. 

Energy efficiency measures represent another source of both savings and reduced emissions for companies. The International Energy Agency estimates that efficiency efforts alone could account for 35 percent of CO2 savings through 2050. Efficiency programs often pay for themselves—or, in the case of the U.S. Department of Energy’s 50001 Ready Platform, they are free. 

This year, in partnership with Winston Vaughan and Dan Seligman at Ceres, Friends Fiduciary focused on manufacturing companies based in states where we have clients. We filed resolutions at several companies, including two steel manufacturing companies, Nucor and Steel Dynamics. Both manufacture primarily via electric arc furnaces, emitting far fewer greenhouse gases than their peers. However, the process is still energy intensive, and further reducing embedded emissions would take advantage of the potential opportunities posed by increased customer demand for low-emission steel. We withdrew both resolutions after the companies agreed to evaluate setting renewable energy and energy efficiency targets.  

It’s crucial that more companies in all sectors consider sourcing renewable energy and making energy efficiency improvements—and clean energy proposals aim to spur companies’ ambitions and highlight the clear business case. 

Kate Monahan
Shareholder Engagement Manager, Friends Fiduciary Corporation