A green revolution is happening in corporate America. Last year, U.S. companies agreed to buy 3,200 megawatts of solar and wind power under long-term contracts, about three times the amount they purchased in 2014, according to the Rocky Mountain Institute, a clean-energy think tank.
Hervé Touati, managing director of the organization, said about 45 percent of Fortune 500 companies have publicly stated their sustainability targets. Touati said progress is incremental but steady. “It takes a lot of time for companies to be energy efficient,” he said. “You get 2 percent or 3 percent energy efficiency a year, and after 10 years it’s 20 percent.”
The movement, prompted by lower renewable energy prices and public and investor concerns, among other factors, is seen across all categories. In an effort to minimize their carbon footprint, companies are looking at renewable energies, greener facilities, more environmentally friendly packaging and reuse of materials formerly classified as waste.
Over the past few years, the costs for renewable energies have fallen sharply. For instance, wind power prices fell 27 percent from 2012 to 2015, to $29 per megawatt hour, according to Bloomberg New Energy Finance. Overall investment in renewable energies rose 5 percent in 2015 to $285.9 billion.
Companies looking to reduce their carbon footprint and save money are taking note. For instance, Caterpillar last year announced an alliance with First Solar to create an integrated photovoltaic solar solution for microgrid applications. Caterpillar used the panels to help power its Tucson Proving Ground mining site in Arizona. The effort will cut 33 percent from its exhaust emissions.
Software giant SAS addressed the indirect effect of its employees’ exhaust emissions by supporting electric vehicles. The company added 18 charging stations at its Cary, North Carolina, headquarters in 2014. SAS’s employees own about 4 percent of the state’s registered plug-in vehicles.
While renewable energy attacks the source of emissions, greener building designs can also help lower carbon footprint by using energy more efficiently. CA Technologies, for example, cut its lighting energy expenditures by 50 percent by replacing existing bulbs with high-efficiency T8 or LED bulbs. The company also moved LED lighting to its data center, which typically runs about 24 hours a day. As a bonus, the new bulbs are also 25 percent brighter.
Qualcomm, meanwhile, is working with the City of San Diego to migrate its streetlight system to LEDs, which could cut energy consumption by 60 million kilowatt hours. The company is also studying how to harness the streetlight systems to monitor air quality and act as charging stations for electric vehicles.
Another way corporations can reduce their carbon footprint is by cutting their packaging sizes. Packaging currently accounts for 30 percent of all municipal waste, according to Michigan State University’s School of Packaging. A 2013 report from the Ellen MacArthur Foundation predicted that packaging could increase globally by 47 percent by 2025.
To avoid such a cataclysm, some companies are being proactive. Biotech firm ThermoFisher has moved to “ambient shipping” for its products that used to require cold shipping. The move, begun in 2013, has saved more than 60,000 polystyrene containers. These use 2,444 fewer metric tons of refrigerant, reducing waste for customers and cutting carbon emissions.
New types of packaging materials are also offering some greener options. Ecovative, a New York-based firm, works with Dell to create packaging for Dell servers based on biodegradable mushroom mycelium instead of polyethylene, which takes thousands of years to decompose.
Addressing another aspect of manufacturing, some companies are also making a point of cutting their waste, sometimes all the way to zero.
Procter & Gamble’s manufacturing facilities haven’t created waste since 2013. Instead, by-products are reconstituted. Waste from making Charmin toilet paper, for instance, goes toward roofing tiles for homes in Mexico, and Pampers by-products are turned into upholstery filling.
New green technologies clearly are helping corporations reach sustainability goals. That’s good news, because more are on the way. Although the majority of Fortune 500 companies still haven’t set such goals, 90 percent of respondents in a 2015 poll of 500 CFOs and heads of reporting for companies said they thought they would have to report such data within three years. “This trend is here to stay,” Touati said. “I don’t believe it will disappear anytime soon.”
Read Business Roundtable’s Create, Sustain, Grow for more on how companies are adopting effective environmental and sustainable business practices.