CDP: Why Aren't Companies Hitting Renewable Energy Targets?

Renewable energy is a key part of many companies' sustainability strategy, with many leading organisations including the EU believing that it is the "at the heart of the climate challenge".

A report from CDP has exposed a considerable gap in corporate involvement with renewable electricity, despite previously set ambitious targets at COP28 for tripling renewable capacities and doubling efficiency.

It finds that 10% of companies explicitly commit to using 100% renewable energy sources.

Corporate responsibility

Operating as a leading environmental non-profit, CDP collects data from an extensive network of more than 24,800 companies globally.

These companies represent a substantial part of the global market capitalisation, consuming around a quarter of global commercial electricity.

The report from CDP highlights that a significant number of corporations are not transitioning to renewable energy sources with the urgency required.

This lack of progress has severe repercussions, stretching across broader Scope 3 emissions.

Amir Sokolowski, Director of Climate Change at CDP, says: “Most companies are still moving far too slowly on renewable electricity, despite it being in their business interest to do so.

"As COP29 calls for urgent and accelerated climate action, our data highlights an immense, untapped potential in corporate renewable energy use. Without this, the global energy transition risks stalling.”

A deeper dive into the data collected by CDP shows a worrying trend: while a handful of companies have embraced a renewable strategy with about 53% of their energy mix from renewable sources, a staggering majority are not even close.

A mere 5% of the enterprises have set specific benchmarks for enhancing energy efficiency — a critical and economically advantageous strategy.

Furthermore, the report underscores substantial transparency issues.

Even though many companies report 29% usage of renewable electricity, only 16% of such data could be validated.

This discrepancy creates significant barriers in forming robust energy markets and supports the development of new renewable projects.

The role of major electricity consumers

The analysis includes nearly 10,000 companies, among which 682 are categorised as 'super users'.

These super users consume more than 75% of the total disclosed electricity, with each using more than 1TWh annually —enough to meet the electricity needs of about 95,000 US households.

Despite their capacity to drive major change, these super users on average report just 33% of their electricity from renewable sources, in stark contrast to smaller companies which report an average of 47%.

Certain leading corporations such as Deutsche Telekom, Microsoft and Robert Bosch showcase what can be achieved, with each reporting over 90% of their energy from renewables.

These examples demonstrate the substantial impacts of robust corporate commitment and highlight the critical influence these large players can hold.

By leading renewable energy initiatives, they can significantly push the entire energy sector towards more sustainable operation and help achieve global climate goals.

Looking forward: The need for swift action

The call for incorporating renewable solutions decisively into operations cannot be overstated.

Establishing clear, verifiable goals for both the sourcing of renewable energy and improving energy efficiency is crucial for meaningful progress.

This year's COP29 drives home the high stakes involved if rapid action is not adopted.

“The path forward demands companies of all sizes prioritise verifiable renewable energy use and purchase targets alongside energy efficiency targets. Transparency is foundational to this goal,” Amir emphasises.

There are both economic benefits and emission reductions to be gained for companies animating this transition.

Yet, if today’s corporate leaders delay pivoting towards sustainable models, the ambitious energy targets voiced at previous COP summits risk remaining unfulfilled.

As significant consumers of electricity, their immediate actions are vital for fostering a resilient, zero-carbon economy.

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