Published on September 26th, 2018 | by Joshua S Hill0
RE100 Member Companies Outperform Their Peers
September 26th, 2018 by Joshua S Hill
A new report published by global 100% renewable electricity initiative RE100 and Capgemini Invent shows that companies committed to 100% renewable electricity targets outperform their peers with above-average financial performance.
Announced at The Climate Group’s flagship Climate Week NYC event being held in New York City September 24 to 30, RE100 — The Climate Group’s global initiative formed in partnership with CDP (formerly the Carbon Disclosure Project) that brings together companies committed to 100% renewable electricity — shared a new report, Making Business Sense: How RE100 Companies Have An Edge On Their Peers, authored in partnership with Capgemini Invent, the digital innovation, consulting, and transformation brand of the Capgemini Group.
The key takeaway from the report is simple, and simply stated by The Climate Group: “RE100 companies are more profitable than their peers.”
“Being energy-smart and being business-smart goes hand in hand and this has to be norm, sooner rather than later to keep warming well below 2 degrees Celsius,” said Helen Clarkson, CEO The Climate Group, speaking from ‘Ambition. Pace. Scale.’, The Climate Group’s flagship business event at Climate Week NYC. “We congratulate those going further and faster on climate action and we urge others to do the same – a win-win for emissions and the bottom line.”
The report, based on 2016-17 data from a sample of 3,500 companies, shows that companies signed up to RE100 — and, therefore, companies committed to transitioning to 100% renewable electricity — “consistently perform better than non-members on two key financial indicators: net profit margin and EBIT margin (Earnings Before Interests and Taxes.” This is no insignificant gap, either, ranging from 0.3% to 7.7% across all sectors (though most prominently in IT, telecommunications, construction, and real estate).
“Although this study does not suggest causality in one way or the other, it clearly shows that companies embracing the opportunities created by the clean energy transition are also leaders in their sectors,” the report’s authors write. “More companies should follow their lead and commit to transformational 100% renewable electricity targets, either because it can help a business to outperform its competitors, or to follow those market leaders establishing renewable electricity sourcing as a priority.”
The report showed that, across the globe, companies who have signed up with RE100 are financially more profitable than their peers no matter the sector and no matter the percentage margin. Further, according to the authors of the report, the analysis shows that there is a “strong link between good financial performance and having an ambitious renewable electricity strategy.”