RE100 Initiative: Catalyzing Corporate Commitment to 100% Renewable Electricity and Demand for Voluntary Renewable Energy Certificates (RECs)

Key Takeaways

• The RE100 initiative is a powerful global movement uniting influential companies in a commitment to use 100% renewable electricity by 2050.
• RE100 has grown from 14 companies in 2014 to 415 companies today – spread all over the globe.
• RE100 companies are the most popular in the USA followed by Japan, the UK, and Korea.
• The average target year of RE100 industries is expected to be reached by 2032 from 2028, after adding new members across the nations.
• 65% of the RE100 companies from the USA set their target of 100% renewable electricity consumption before 2035.

As corporations strive to meet decarbonization goals and enhance the visibility of their efforts to reduce GHG emissions, a coalition becomes necessary to accelerate decarbonization. The demand for public, transparent, and third-party-approved emission reduction standards, along with the dissemination of best practices, presented a challenge that required a solution. The RE100 initiative addresses this need for renewable electricity. RE100 is a global initiative that brings together the world’s most influential businesses, all committed to 100% renewable electricity usage. Launched in 2014, this initiative is led by The Climate Group in partnership with CDP (formerly the Carbon Disclosure Project). The primary goals of RE100 are to:

• Drive Demand for Renewable Energy: By committing to 100% renewable electricity, member companies increase the demand for renewable energy, which can help to accelerate the transition to a low-carbon economy.
• Demonstrate Corporate Leadership: Companies that join RE100 demonstrate environmental leadership and commitment to sustainability, which can have a positive impact on their reputation and brand value.
• Influence Policy: The collective voice of RE100 members can be a powerful tool in influencing government policies and regulations to support the transition to renewable energy.
• Share Best Practices: Member companies of RE100 share their experiences and best practices, helping to overcome barriers to transitioning to renewable energy.

What is the scope of RE100?

All electricity emissions including Scope-1 and Scope-2

The RE100 initiative defines ‘entire operations’ as the electricity consumption encompassing:

• Scope-2 emissions, which are associated with the electricity purchased by the company.
• Scope-1 emissions, which pertain to the electricity generated by the company itself for its own consumption.

RE100 has been gaining popularity from 12 organizations in 2014 to more than 400 organizations in 2023

In the span of a mere decade, the collaboration within the RE100 initiative has witnessed a remarkable surge, escalating from 12 organizations in 2014 to a substantial 415 by September 2023. This noteworthy increase underscores a growing global commitment to renewable energy adoption and sustainability goals among diverse entities spanning various sectors.

Figure 1: Number of organizations registered under RE100 (Source: RE100 Data 2023)

The topmost US organizations included under RE100

Four of the ten top US companies – namely Apple, Google Microsoft and Meta are part of the initiative. Other major top companies participating include Walmart Stores, Inc., Cigna, Home Depot, General Motors, Elevance Health, JPMorgan Chase, Johnson & Johnson, PepsiCo, Goldman Sachs Group, Target Corporation, Citi, McKinsey & Company. The figure below outlines the additional companies that joined the initiative during its inaugural three years.

Figure 2: RE100 Organization registered in first 3 year of initiative (Source: RE100)

 So, what does it take to be an RE100 member?

1. Public commitment: Companies must publicly commit to 100% renewable electricity for their operations by 2050 (60% by 2030 and 90% by 2040). This includes addressing scope-1 and scope-2 emissions.
2. Third-party verification: Companies need third-party verification of their renewable electricity consumption, and sometimes generation and sales too (e.g., Green-e certification).
3. Market boundary: Companies should source renewable electricity from their consuming market but can exclude small loads if technically infeasible (up to 100 MWh/year per market).
4. Transparent reporting: Companies must annually report progress using the RE100 Reporting Spreadsheet or CDP climate change questionnaire.
5. Mission alignment: Companies must avoid activities contradicting RE100’s mission, like lobbying for fossil fuels or increasing investments in fossil fuel assets.
6. Group-level commitment: Companies must join RE100 at the group level, showing commitment across their entire organization.

By fulfilling these criteria, companies can join RE100 and contribute to the global transition towards a sustainable and renewable energy future. It may vary for different jurisdictions based on regulatory mechanisms and the availability of renewables.

The services sector constitutes the largest share, with 36% of the total registered companies, followed by the manufacturing sector at 24%

The service sector comprising mostly technology-based companies, such as Microsoft, Apple, Accenture, Adobe, Google, Infosys and others, dominates the RE100 initiative. With the continuous growth of technological fields like artificial intelligence, data servers, and virtual reality, the electricity demand in these industries is expected to surge in the coming years. It is imperative, therefore, for the industry to take an active role in the energy transition, embracing more efficient energy practices and committing to utilizing 100% renewable electricity across all its operations.

Figure 3: Types of RE100 Industries (Source: RE100 Report 2023)

The RE100 initiative is popular in the USA, Japan, South Korea and the UK

The US boasts the highest concentration of RE100 organizations, constituting 24% of the total registered globally. In the USA industry giants such as Apple, Microsoft, and Starbucks joined in 2015, setting a target year before 2022 for achieving their renewable energy goals. On the other hand, companies like Cigna, AirBnB, Brown-Forman, Cognizant, and Emerson have recently joined the initiative in 2021 and 2022.

Japan is the second-largest hub for registered RE100 industries, yet its renewable energy mix remains below 20%. Despite the CDP report highlighting numerous challenges in the Asia-Pacific region, particularly in RE procurement, Japan sees a higher number of registered organizations. This can be attributed to ambitious corporate goals and the prevalence of manufacturing and services companies in the country. Interestingly, Japanese organizations exhibit a comparatively extended horizon, with an average target year surpassing 2040, in contrast to the overall average of 2032.

Figure 4: Country-Wise counts of RE100 Industries (Source: RE100 Report 2023)

Figure 5: Average target year of RE100 organizations from different regions (Source: RE100)

65% of RE100 Companies from the USA set their target of 100% renewable electricity consumption before 2035.

In the figure below, it is evident that the majority (65%) of the total RE100 organizations registered from the USA have set their scope-2 emission-free targets before 2035, aligning with their long-term goal of achieving net-zero emissions by 2050. Additionally, companies from the UK have committed to reaching net-zero before 2035.

Registered companies from France, Ireland, Norway, Denmark, Finland, and Sweden are aligning their goals to achieve them by 2030. While Japan has the second-highest number of registered companies in RE100 after the USA, a notable 56% of these Japanese companies have set their net-zero target year for 2050.

Figure 6: Countries and their industry target years to achieve 100% renewable consumption (Source: RE100 Report 2023)

RE100 Registrations Witness Decline Over Two Years Amid Economic Challenges and Lingering COVID-19 Impact

Over the past two years, there has been a notable decline in the number of companies registering under RE100. In 2021, there was a peak with 66 organizations joining, but in 2022, this number dropped to 58. As of September 2023, only 22 new organizations have registered under RE100. This decline may be attributed to the lingering effects of slow economic growth and the impacts of the COVID-19 pandemic on businesses.

Figure 8: Year-wise Joining of Industries as RE100 (Source: RE100 Report 2023)

How does RE100 impact the Renewable Energy Certificate (REC) market?

The RE100 initiative significantly impacts the Renewable Energy Certificate (REC) market, playing a crucial role in driving investments in renewable projects and fostering overall market growth. Companies directly purchase bundled RECs through various means like Power Purchase Agreements (PPA), Green Open Access, or green tariffs, depending on renewable availability in specific regions. Furthermore, the initiative’s influence extends to the use of voluntary unbundled RECs, bolstering demand for Voluntary RECs. This is particularly beneficial in regions with limited renewable resources or grid connectivity challenges. To navigate potential issues like integrity and double claims of Renewable Energy, strict regulations and market-based solutions are essential. Despite challenges, the acquisition of energy attribute certificates like North America RECs, GOs-Europe, TIGR, I-RECs, among others, plays a crucial role in achieving the RE100 goals.

The RE100 initiative directly influences the REC market by driving an increased demand for RECs. As entities seek these certifications to fulfill their scope-2 decarbonization targets, the growing participation in RE100 further amplifies the demand for RECs.

In summary, the RE100 initiative unites influential global companies in committing to 100% renewable electricity usage by 2050. By addressing Scope-2 emissions through the GHG Protocol and setting stringent criteria for membership, RE100 drives the adoption of sustainable energy practices. Dominated by technology-driven firms, particularly in the services sector, the initiative is led by USA and with Japan, UK, and Korea following suit. Varied net-zero targets underscore international dedication to combatting climate change. Despite challenges, progress is evident as companies transition to renewables, highlighting RE100’s positive impact.

Analyst contacts:

Nishant Kumar Upadhyay (nkupadhyay@ckinetics.com)

Craig Rocha (cmrocha@ckinetics.com)