New Index Tracks Voluntary Corporate Renewable Energy Usage

This week Vestas Wind Systems of London and Bloomberg New Energy Finance of New York City unveiled their joint project, the Corporate Renewable Energy Index (CREX).  The goal of the index is to clearly lat out what companies are using renewable energy, where that energy is coming from, and how much renewable energy they are utilizing compared to conventional energy.  The idea is that ultimately the availability of this newly quantified information will help corporations (and interested consumers) see where they fall in terms of being “green” and will encourage them to derive more of their energy needs from renewable sources.

The survey provides data for the years 2009 and 2010, and was conducted beginning in November 2010.  The preliminary results provided by the report will be continuously updated to track progress and maintain transparency.  Vestas Wind Systems and Bloomberg New Energy Finance see transparency as tantamount.  They believe that transparency will benefit consumers who wish to make informed and green purchasing decisions, corporations who need to know what industry leaders are doing, investors who want to analyze risk in a company’s energy management and supply, NGOs who need to assess corporate actions in order to affect change, and policy makers who must understand the implications of their decisions regarding energy policy.

Vestas Wind System and Bloomberg New Energy Finance began the study by sending out surveys to the 1,000 largest businesses in the world based on market capitalization.  Of those corporations, 176 firms completed the survey.  According to the report, the CREX “represents the most comprehensive snapshot to date of corporate voluntary renewable energy purchases… it is the largest and most global ever conducted to measure this corporate activity.  In 2010 two U.S. based corporations topped the list: Kohl’s Corporation and Whole Foods Market Incorporated.  Both procured more renewable energy than they actually consumed.  

Noteworthy findings of the study are as follows:

Purchasing of renewable energy is increasing, but renewable energy consumption still makes up only a small part of overall corporate energy consumption:

  • In 2009, renewable energy accounted for 8.2% of total energy used by the respondents of the survey.  That figure increased to 12.1% in 2010
  • 74% of companies surveyed reported that they used a higher percentage of renewable energy in 2010 compared to 2009.  
  • More than 40% of companies who answered the survey procure less than 5% of their energy from renewable sources.

Wind is the most prevalent source for renewable energy among large corporations:

  • While 30% of respondents were unaware of the source of their company’s renewable energy, wind was the most popular for those who did know the source.
  • Wind power accounted for 51% of the renewable energy used by these large corporations.  

European corporations tended to use more renewable energy than their American or Asian counterparts:

  • Of the 176 corporations that participated, 25 were based in Europe.  Those companies met 40% of their cumulative energy demands through the utilization of renewable energy sources.  American companies hovered around 22% and Japanese corporations averaged only 3%.

CREX respondents historically outperform their peers:

  • While the MSC World Index has fallen 12.6% over the last few years, CREX constituents have grown by 24.7%.  CREX corporations also outperform MSC World Index corporations on a ten year, five year, or one year period.  However, this is not an indication that using renewable energy causes companies to outperform the market.  In fact, it very well may be the other way around (companies that are performing well have the resources necessary to utilize renewable energy.

To read the full report, please click here.

Photo credit:

Leave a Reply

Your email address will not be published. Required fields are marked *