In this series, we explain the basics of transitioning to renewable energy, from the emerging opportunities, options and impacts, to the process of implementing onsite or offsite solutions.
Hundreds of large corporations have committed themselves to the RE100 and the Science Based Targets initiatives. This proves that industry leaders are interested in cutting carbon emissions. Most corporations that are investing in renewable energy are doing so with their owned and operated facilities.
Owned and operated facilities can most easily be understood as buildings or spaces at which the company pays the electricity bill. Most corporations choose to start here because emissions from those facilities are quickly and easily tied back to the parent company, and because initiatives are easier to enact when you own, or have large influence in, the buildings.
Starting in owned and operated facilities is logistically the easiest, but for any company that manufactures goods, it’s also the opportunity with the smallest environmental impact.
Owned & Operated: By the Numbers
Percentage of Emissions -- < 25%
Advantages -- Easiest to implement; Emissions clearly tied to parent company
Challenges -- High consulting costs
For companies with manufacturing operations, the supply chain can make up over 75% of their carbon emissions. The Carbon Disclosure Project confirms this number:
“Emissions located in the supply chain are around four times as high as those from direct operations.”
Unfortunately, the same study found that, despite the opportunity, only 23% of companies were engaging with their suppliers to drive emission reduction programs.
Part of the reason supply chains are largely ignored is because most companies outsource their production to contractors in Asian, South American, or African countries. With outsourcing, not only is labor transferred across borders, but the emissions from that manufacturing as well. And often to countries with less strict environmental laws and higher rates of corruption. So emissions are harder to track back to the parent company, and the manufacturing itself becomes dirtier in the process.
Factory Base: By the Numbers
Percentage of Emissions -- > 75%
Advantages -- Largest impact; Similar price to implement
Challenges -- Working with contracted factories; Navigating foreign laws and practices