Nearly Half the Fortune 500 Have Goals to Cut Greenhouse Gases

In an effort to reduce its carbon footprint, IBM is focused on cutting its consumption of electricity. To do so, it is making investments in energy efficiency and renewable energy.

IBM isn’t alone. In fact, nearly half the companies in the Fortune 500 have set targets to cut their greenhouse gas emissions, improve energy efficiencies and up their consumption of renewable energy, says the just-released Power Forward 3.0 report. And as the cost of the technologies and the fuels drop, companies are striving to do more and more. Ceres, the World Wildlife Fund, CDP and Calvert Investments contributed to the report. 

As for IBM, it is designing, building and operating its data centers and manufacturing facilities in a way that optimizes energy and material use while at the at the same time, limiting its greenhouse gas emissions. Using more renewable energy is also key to its strategy. 

And it has kept its eye on the ball: In 2015, IBM set a goal of cutting its greenhouse gas emissions from energy consumption by 35% from 2005 levels by 2020. In the same year, it raised its renewable energy targets from 16% to 20%, all by 2020.

“IBM’s longstanding commitment to energy conservation delivers improved operational efficiency, reduced GHG emissions, and cost savings,” says the Power Forward report.

“In addition, IBM greatly extends the influence of its activities by translating approaches from its internal operations into solutions that help clients achieve greater energy efficiency,” the report adds. “IBM also requires global suppliers to implement an environmental management system that includes inventorying and reducing their energy use and related GHG emissions.”

The Fortune 100 companies are leading the trend, the report says, with 63% of those companies setting goals. Still, the smallest 100 companies in the Fortune 500 are doing a lot as well, it adds, noting that 44% have such targets. That’s up from 19% in 2013. Consumer staples such as food and beverage companies are the highest achievers while oil and gas companies are at the bottom of the list.

“Meanwhile, businesses are reaping bigger and bigger cost savings from energy efficiency projects they have implemented to meet their targets, with 190 companies collectively reporting $3.7 billion in annual savings,” says the report.

The most significant trend is that companies are setting science-based targets as well as trying to run their operations using just renewables. About 24 companies aim to operate their facilities using solely green energy and include Facebook, Google and Microsoft as well as Walmart and Bank of America, the report says. Companies can either buy renewable power in the form of power purchase agreements, invest directly in those projects or own and operate them outright.

A science-based target, the organizations say, is when a company sets its personal goals in line with the best-available science, all to limit global temperature increases to less than 2 degrees Celsius from the pre-industrial era. As of January 2017, 210 companies are using such a standard to set their greenhouse gas goals. They include Proctor & Gamble, General Mills and Kellogg Company. 

The organizations have some advice for companies, investors and the electricity sector. It is suggesting to companies to help create economies of scale within the renewable energy sector by joining alliances and to strike while the iron is hot, buying such power before the federal tax credits expire in a few years. At the same time, it is telling those businesses to support initiatives at the state level and to report their progress in achieving greenhouse gas reductions.

As for investors, they should disclose their investment portfolios to illustrate that they are promoting the development companies with sustainable agendas. To that end, the organizations are also suggesting that those investors work with the companies in which they hold an interest to limit their carbon footprints.

And finally, the organizations say that utilities need to offer ever-larger shares of renewable to their corporate customers.

“We’ve been tracking and reducing emissions since 2007, and we’ve been operating our data centers and the rest of the company at 100 percent carbon neutrality since 2012,” Brad Smith, chief legal officer for Microsoft said in the report. “We’ve achieved this progress by driving efficiencies, charging our business units a fee on carbon, and investing in sustainable energy projects and technologies.”