The latest climate change report from the U.N. Intergovernmental Panel on Climate Change is out, and the news isn’t good: attempts to reduce carbon emissions over the past decade have failed, and we’re looking at some pretty grim scenarios if governments around the world don’t find a way to reduce our reliance on fossil fuels by the year 2050. According to these scientists, nations need to cut their energy emissions by 40-70 percent by 2050 – and by 100 percent by 2100 — to avoid bringing on a climate change apocalypse.
So here’s an innovative idea: All companies should pledge to become zero-energy companies by 2050. What that means in layman’s terms is that companies should reduce their net energy consumption to zero, producing more energy than they consume. To achieve that aggressive goal, they will be asked to go way beyond just reducing their carbon footprint – they will need to start thinking not just of how they consume energy, but also how they produce it.
The template for such a model would be IKEA, which has pledged to become a zero-energy company by the year 2020. The company has already earmarked $2 billion for renewable energy projects, including its latest project – a new wind farm 110 miles south of Chicago. Already, the numbers from the company’s most recent sustainability report hints that it can be achieved. In 2013, renewable energy sources accounted for 37 percent of the company’s total energy needs. The company now owns wind projects in eight countries and has installed more than 550,000 solar panels. That massive new wind farm in Illinois, once it’s operational in 2015, will be able to supply 165 percent of the company’s electricity needs for its U.S. operations and up to 18 percent of the company’s global electricity needs.
That’s right – the Swedish company known for its funny-to-pronounce names of affordable furniture and its beautifully designed catalogs is actually at the forefront of a concept that most companies probably wouldn’t dare to touch: Becoming a zero-energy company.
What’s making the concept of the zero-energy company possible, of course, is another very innovative concept: that companies can buy and trade energy the way they buy and trade goods. You don’t need a wind farm in your company’s parking lot to make this work. Companies can produce power with their renewable energy projects, use what they need and sell excess power to others. The wind power generated by the IKEA wind farm in Illinois will be more than enough to power a mix of 38 stores, five distribution centers, two service centers and one factory across the nation. Get ready for more stories of other companies that own their own renewable energy sources, ranging from Google and Apple to Walmart and Kohl’s.
So it’s not just IKEA that’s leading the way to a zero-energy future. At last week’s Bicameral Task Force on Climate Change in Washington, a group of five companies (including IKEA) talked to U.S. congressional lawmakers about the concrete steps they can take to ameliorate global climate change. Each of the companies – IKEA, VF Corporation, Mars, Sprint and Jones Lang LaSalle — has signed onto the Business for Innovative Climate and Energy Policy (BICEP) Climate Declaration. The hope expressed at last week’s Washington event is that by 2016, there will be enough momentum around renewable energy that any candidate attempting a climate denial message will be risking political suicide with voters.
Obviously, the admittedly radical proposition that companies should be zero-energy companies by a specific date is not going to go over well in most of Corporate America. Nobody likes being forced into solutions that their shareholders might or might not like. And, in all fairness, it’s worth pointing out that many of the companies embracing renewable energy today are exactly the companies with billions of dollars to experiment with on new strategies. (IKEA is one of the world’s most valuable brands and does $35 billion in sales per year) But just consider the alternatives if global corporations don’t get behind the movement: eroding coastlines, famine, skyrocketing food prices and more extreme weather events.
The new way to sell renewable energy in the board room is by being able to make the economic argument for why being a zero-energy company makes business sense. Read between the lines about the way people reacted to the UN climate change report, and you can see that a lot of people are ready to roll out the same tired arguments of how a renewable energy future will cost jobs and cause economic growth to stall. Companies have to be willing to take on that argument head-on. IKEA points out that the company’s embrace of wind power actually helps it to smooth out the costs of electricity pricing, enabling it to provide value pricing to consumers. In short, one of the reasons you get really cheap furniture from IKEA is because the company has figured out how to use power from the wind.
In the past, companies may have been lauded for embracing a green message, knowing that shareholders would reward them for doing the right thing. But that’s just not going to generate enough momentum to get us to the types of numbers projected by the U.N. IPCC for the year 2050. How do you cut your carbon footprint by 40, 50 or 60 percent within 30 years by adhering to business as usual?
IKEA becoming a zero-energy company by the year 2020 would be huge as a model for what’s possible. We already live in a world in which we want our vacations to be carbon-neutral and ask companies to build us zero-energy homes. Why not take that concept to the next level and demand that our corporations be zero-energy as well?