When Companies Generate Rather Than Buy Renewable Energy


The politics of climate change have gone mainstream.

While some politicians still struggle with the issue, more people the world over are becoming alarmed by what the science is telling us. Protests are taking many forms, from climate strikes to consumer boycotts, and big companies are taking notice because their reputations are their biggest assets.

Amazon is a case in point. CNBC reportedOpens a new window this week how Tehachapi, a high desert town in the Tehachapi MountainsOpens a new window of southern California, is benefiting from the e-commerce giant’s decision to build a wind farm there. The facility is part of Amazon’s push to use only renewable energy by 2030 and achieve net-zero carbon emissions by 2040.

Green and trendy

It fits a trend. Companies began displaying their environmental credentials decades ago, sometimes dismissed as “greenwashing” when the impact of their efforts was seen as minuscule in comparison with their operational footprint.

It began at the factory level, with firms putting solar panels on their roofs to reduce electricity costs and optimizing interior operations with a plethora of green technologies, from low-energy light bulbs to water-saving technology.

While the efforts were lauded, companies knew they had to go further to buttress their image and demonstrate a greater commitment to cutting their carbon footprints, publicly committing to targets.

Companies based in countries where the climate debate has further evolved on the political agenda need to be seen to be living up to their commitments globally, thus pushing the issue further to the forefront in the United States.

Only last month, the Japanese carmaker HondaOpens a new window committed to power 60% of its US operations with renewable energy supplies and entered into virtual power purchase agreementsOpens a new window with renewable generators.

Home-grown hope

There’s no doubt that home-grown initiatives such as Amazon’s are pushing the agenda further. Alongside a decision to move to all-electric deliveries, building windfarms to power its operations is upping the ante. If a major company wants to buy renewables but there’s a physical limit to what’s available, then building more capacity is a real commitment.

But while congratulating Amazon, perhaps we should take a closer look at the origin of its policy.

Jeff Bezos has a few reputational issues. As one of the richest men on the planet, he has been hit with serious criticism for not sharing the wealth created by Amazon’s success with his global workforce.

While we might think that employees’ bread-and-butter concerns were foremost in their minds, thousands of them put their names to a proposal at Amazon’s shareholders meetingOpens a new window in May, calling on Bezos to commit to cutting the company’s carbon footprint. Although the proposal was rejected, the pressure from employees was a key driver in the current policy. After all, who wants to work for a bad brand, and who wants to buy from one?

As some companies now have a turnover equivalent to the GDP of a small country they, too, need to plan to meet their share of global carbon reduction targets.

It makes good sense from a brand point of view, and also a business point of view. And as the world switches to renewables, the costs are coming down, which is perhaps the biggest driver of them all.