This blog is the first in a series exploring conversations shaping the future of responsible renewables, hosted in collaboration by Schneider Electric and Korn Ferry. Each month, we will publish a new blog spotlighting an important voice working to promote responsible renewables, including project developers, corporate buyers, community members, and NGOs.
As the first edition of the series, this blog will serve as a primer, detailing the key issues to consider under the umbrella of responsible renewables. Subscribe to our mailing list and stay tuned for more.
Renewable energy has become a common tool that businesses use to reduce their emissions, advance sustainability goals, and develop a positive reputation. In the past decade, there has been a surge in corporations around the world procuring renewables. In 2022 alone, corporations bought a record of more than 30 gigawatts of clean energy, with an emissions impact equivalent to removing more than 41 million gasoline-powered cars from the road for one year.
Though clean energy buying has become somewhat commonplace for large corporations, a focus on the responsibility of those renewable energy projects is less widespread. What does that mean? Simply, there are some ways of procuring renewable energy that are more environmentally and socially sustainable than others.
We refer to this as responsible renewables.
What is the difference between renewables and responsible renewables?
Renewable natural resources, such as wind or solar, can be converted and used for electricity generation, water heating and cooling, and transportation. For the purposes of this blog, we will be discussing renewables in the context of electricity generation.
By investing in renewable electricity through offsite power purchase agreements (PPAs), Environmental Attribute Certificates (EACs), and onsite installations, organizations can support the adoption of zero-emission power. But, what about responsible renewable energy?
It seems obvious that clean power would already be “responsible.” It is easy to assume that all renewable technologies are equally responsible to build and to buy. And from the standpoint of producing and making claims of carbon- and water-free electricity use, responsible renewables technically are the same as any other renewables projects.
However, when it comes to procuring renewable electricity, the “responsible” modifier can make all the difference where it matters most: holistically addressing concerns for people and the planet.
There is much more to a renewable energy project than the electrons it puts on the grid. If the wind, solar, or hydropower project a company buys is not designed and built responsibly, it can cause adverse impacts for people, wildlife, and the environment.
What are the negative impacts of not sourcing responsibly?
There are potentially negative impacts linked to all renewable energy options. For example, wind turbines can impact wildlife like birds and bats and cause noise pollution. Solar energy can require a significant amount of land, impacting the natural landscape and habitats and creating competition with agriculture and tribal land rights. Increasingly, the natural resources required to build clean technologies – and solar panels and batteries in particular – are being sourced from regions with known or suspected human rights violations. The waste generated by clean tech at the end of its life can also be problematic and carry negative environmental and social impacts. Responsibility needs to be top of mind throughout the entire lifecycle of the project.
The good news is that, increasingly, there is a solution to each of these potential issues that organizations have the choice to prioritize when procuring renewable energy. Choosing to use renewables is the first step, and an admirable one for any organization. But true climate leadership means ensuring that you responsibly source those renewables in a way that not only reduces emissions but also considers other important aspects of sustainability.
What does it mean for a renewable energy project to be responsible?
When a business prioritizes impact initiatives, also known as “co-benefits”, when procuring renewable energy, the projects under consideration will possess attributes that build resilience for people and communities and conserve the health of ecosystems and the global environment.
Responsible procurement involves considering the full lifecycle of the renewable energy supply chain — including the production, transportation, use of renewable energy, and the end-of-life management procedures — because the upstream and downstream supply chain has impacts on ecosystems, economies, and communities.
The current state of responsible renewables
Responsible sourcing of renewable energy is becoming increasingly important as consumers and other stakeholders demand more sustainable and socially responsible business practices. However, the standards and transparency vary widely depending on the market.
Organizations that are committed to responsible energy procurement often seek out renewable energy sources that have been certified as sustainable or socially responsible. For example, companies may look for renewable energy projects that have been certified by organizations like the Gold Standard or the Climate, Community & Biodiversity Standards. These certifications ensure that the renewable energy project meets rigorous sustainability and social responsibility criteria. However, there is no global governing body that oversees the entire spectrum of social and environmental impacts a renewable energy project can have, leaving buyers to uncover the positive and negative considerations in their preferred market.
Overall, there is a growing trend among companies to source renewable energy that builds in greater elements of responsibility. By doing so, companies can demonstrate their commitment to sustainability and social responsibility, while also helping to create a more sustainable and equitable future for all.
6 best practices for sourcing responsible renewable energy
How should an organization source renewables responsibly and start to make a positive environmental and social impact? Although the answer will vary depending on the organization’s sustainability goals, location, and business priorities, the following categories capture key considerations for more responsible renewable projects.
1. Prioritizing land and conservation efforts
Renewable energy project development, siting, and installation can put tremendous pressure on land, habitats, and wildlife around the world. Irresponsible renewable energy sourcing has led to deforestation, extinction of plants and animals, air and water pollution, and human rights violations.
One step a business can take to balance the impacts that renewable sourcing can have on land is to incorporate conservation efforts into procurement activities. Consider asking questions that will illuminate potential impacts to the local community’s land such as:
- Will the project be built on previously contaminated land that could utilize space that otherwise would be left empty?
- Does the project displace prime agricultural production?
- Has the developer performed a thorough siting assessment to ensure that no critical species’ habitats may be disrupted or lost?
- Is there a current or historical tribal value to the land that is under consideration? If so, have tribal leaders been consulted on its development?
- Is there an opportunity to “offset” the project impacts through land conservation elsewhere, potentially in an even more fragile natural area?
Investing in green energy projects that help conserve natural resources and protect biodiversity can reduce the impact of human activity on the environment.
2. Building projects in locations with higher carbon emissions
We know that renewables result in far fewer carbon emissions than fossil fuels. However, a project in one region can displace more carbon emissions than the same-sized project in another region with a “dirtier” grid. This is because some regions rely more heavily on fossil fuels than others. As a responsible renewables buyer, it is important to assess the carbon intensity of the grid in which a prospective renewable energy project is located and select an option with the greatest avoided emissions, known as project “emissionality.”
Carbon emissions can be reduced or avoided throughout the energy supply chain by considering certain aspects of the current and future carbon profiles, such as:
- The current emission factor of preferred regions
- If the market has a renewable energy portfolio standard
- The future of the market’s energy mix
“Emissionality” is a metric used to quantify the impact of renewable energy projects in reducing emissions. The location of the project plays a crucial role in determining the amount of carbon emissions that are reduced or replaced, given the uneven distribution of clean energy resources around the world.
Put simply, investing in a new renewable energy project in the dirtiest grid in the world will produce a greater impact on reducing global atmospheric emissions than a renewable energy project in the cleanest grid.
3. Considering diversity, equity, and inclusion (DEI) when selecting suppliers
In 2020, the renewable energy industry employed more than 11.5 million people worldwide and the industry is projected to surpass 42 million jobs by 2050. With this exponential growth, it’s essential that corporate buyers hold themselves and their developer partners accountable for promoting a diverse and inclusive workforce within their organization and supply chain.
In the early stages of project selection, corporate buyers should do research before choosing a renewable energy partner. There are many options for partnering with women- or minority-owned businesses (WMBE), working with community groups to create jobs and other economic opportunities, as well as integrating a diverse array of people throughout all workforce activities.
When evaluating the responsibility of renewable energy projects, organizations can request information on the developer's commitment to DEI through their operations, inclusive hiring practices for employees and construction workers, and their efforts to promote diversity in their own supply chain.
By prioritizing DEI considerations in their renewable energy procurement strategy, buyers can not only support the growth of renewable energy, but also promote greater diversity and equity in the energy sector. This can help to create more opportunities for underrepresented groups and communities and contribute to a more sustainable and inclusive economy.
4. Building trust, community impact, & supporting a just transition
Often, the community where renewables are sourced is overlooked in the pursuit of zero-carbon claims. This can lead to the spread of misinformation, distrust with local community members, lack of support for the project, and construction delays. These situations can also lead to reputational risks, which can be extremely damaging to an organization’s bottom-line.
It’s important for developers and their customers to listen to the community, engage local leaders, and give back in ways that matter to avoid these impacts. This might include sharing the positive environmental and economic impacts of the projects, building renewable projects in areas with higher levels of pollution, and working closely with community leaders to determine how revenue from renewables goes back to what locals need and value most. This is extremely important because the needs of one community could vary greatly from another.
“Just Transition is one piece of a comprehensive approach to focusing on equity, sustainability, and justice for the communities who will benefit from and be impacted by the development of renewable energy projects. As a buyer of renewable energy, corporations have an opportunity to signal and require good jobs in the materials provision, construction, and operation of renewable projects.”
By investing in the just transition, businesses can:
- Help shape regulations and legal reforms with governments and unions
- Grasp new commercial and technical opportunities through re-skilling and retraining
- Increase employee productivity, creativity, and flexibility through good workforce relations
- Facilitate adjustments in wages and working time through the implementation of social dialogue
- Improve customer loyalty and brand recognition
- Improve their social license to operate with the creation of green jobs
5. Ensuring an ethical supply chain
Because labor laws around the world are not standardized to one code, organizations must be diligent in understanding the source of the equipment used in renewable energy projects. While most codes of conduct enforce no modern slavery and promote ethical practices, human rights violations and forced labor do still occur. It is incumbent on all corporate buyers to make sure they are avoiding these products and asking the hard questions of project developers to ensure renewables are sourced conflict-free.
It is within the buyer’s power to actively seek and choose suppliers who follow codes of conduct that promote ethical practices and prevent exploitation to ensure that business practices are fair and ethical.
6. Managing the end of life of renewable equipment
What happens when a renewable project reaches the end of its operational life? This final step is the one that’s often overlooked, but the end-of-life impact of the projects can cause significant issues for communities when proper procedures aren’t followed. As renewables such as wind and solar penetrate the grid, concerns about waste intensify even further.
By 2050, PV panels are expected to account for ~10% of global electronic waste.
By prioritizing projects that use more sustainable, recyclable, and reusable hardware and end-of-life management practices, corporate buyers can influence the market and maximize the sustainability of their project to avoid increased levels of electronic waste.
By 2050, wind turbines waste composites will reach 1.2M metric tons globally.
Investing time and resources into projects that take care to reuse or recycle equipment in an environmentally responsible way will reduce the environmental impact of procurement activities and ensure that the benefits of clean power are not undermined by poor waste management practices.
By considering these six impact categories, businesses can promote responsible and sustainable practices that help to address some of the most pressing environmental and social challenges of our time while establishing leadership in the sustainability space and driving the development of clean, renewable energy. Ultimately, these practices help to create a more sustainable and equitable future for all.