Market News

 August 22, 2007
Business Case: EU Corporate Use of Renewable Energy

 This policy brief from the World Resources Institute (WRI) gives an overview of the benefits that are motivating businesses in Europe to switch to renewable energy.

European corporations are increasingly using renewable energy resources for their electricity and thermal energy needs. Why are these and other firms switching to energy from renewable resources?

This installment of the World Resources Institute's (WRI) Corporate Guide to Green Power Markets series explores this question. It identifies and discusses three major types of business benefits companies obtain by using renewable energy. This installment also provides a number of corporate examples to illustrate these "business cases."

The WRI's experience working with a number of leading corporations indicates that firms are switching to renewable energy to obtain one or more of the following business benefits:

  • Lower or stabilized energy costs. In some situations, using renewable energy can directly lower corporate energy costs or stabilize corporate energy prices.

  • Reduced emissions. Using renewable energy can help companies reduce their emissions of greenhouse gases and other airborne pollutants that pose regulatory and financial risks to firms.

  • Stronger stakeholder relationships. Using renewable energy can strengthen a company’s image and relationships with its various stakeholders, including customers, local communities, employees, and shareholders.

Three observations are also noted by WRI. First, not every renewable energy opportunity has a strong business case for a corporate energy user. In some situations, the potential business benefits do not justify the cost of renewable energy.

Second, the particular business case relevant to management often varies among companies and even among facilities within the same firm. For instance, because economic incentives and renewable resource availability often differ between countries, a renewable energy project that is financially attractive to a business unit in one country may not be attractive to a business unit in another.

Third, some renewable energy projects or purchases can provide more than one business benefit simultaneously. That is, one benefit does not preclude another.

Read the full report here.

Source: World Resources Institute .