Why are Companies Investing in Renewable Energy?

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Why are companies investing in renewable energy? | FutureBusiness

In today’s climate, where sustainability and environmental concerns are a significant topic, it is unsurprising to see many businesses and industries across the globe making changes to their operations, processes, and the power behind them. Renewable energy, that which is drawn from a source that isn’t depleted when it’s used (such as solar, wind, and water), is being introduced into companies as a replacement for traditional energy sources that often make use of fossil fuels or highly pollutant methods of use.

There are many reasons why these businesses are adjusting their spending and making room in their budget in order to switch to renewable energy, and we’re going to look at five of them.

Renewable Energy Helps Companies Meet ESG Targets

The use of renewable, clean energy means that there are less harmful emissions (such as carbon dioxide) being released from the process over the lifetime of the source, this has a considerable impact on the volume of emissions that a business is generating – and can substantially reduce the carbon footprint.

ESG reporting has many different frameworks and approaches, but the measurement of harmful substances and emissions is common, and specific targets are often aimed for by companies in every industry. In order to reach carbon neutral or negative, renewable energy is an extremely appropriate method of generating and using power.

The Use of Renewable Energy Appeals to Consumers and Investors

In 2021, around 37% in the US stated that they strongly agreed with energy generated from renewable energy, and year on year there has been a global uptick in the number of people who care about its usage, and how it affects their attitudes towards companies.

Customers are willing to vote with their wallets, and with the internet and social media – it is very easy to examine what companies are saying, and whether they’re following through on those actions. This not only has an impact on the bottom-line and profits, but reputation and trust as well.

Investors, who are looking to add to their Environmental, Social, Governance (ESG) investing profiles are going to look for companies that match their vision and values, and renewable energy is an attractive option. As more focus is given to environmental concerns, and investors look at the stability of ESG investing, it is unsurprising that investors are seeking out those who are actively making their companies more attractive and future-proof with sustainable developments.

The Costs of Renewable Energy are More Stable

As we’ve all seen, with the issues in Europe and the surrounding areas, traditional fuels and energy supplies can easily be disrupted by global events – which in turn causes the prices to escalate dramatically.

The operating costs of generating renewable energy are generally lower, and this is reflected in the price of the energy.
Experts have also found in research that renewable energy is cheaper in almost all applications, and they are expected to become even cheaper, faster, if usage is accelerated.

Generating Renewable Energy Allows for Greater Control

Companies that choose to not only implement renewable energy, but also generate it themselves, have greater control over the availability of the power. By controlling the energy production, these companies can ensure that their current operations are well powered, and can strategically plan their growth in a way that doesn’t put extra stress on the resources, or come with unexpected energy costs.

Businesses in areas where there are frequent power issues are also able to maintain their operations, and can stand at an advantage over competitors who are reliant on the availability of the national grid.

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Renewable Energy is Good for the Environment

Finance and bottom-lines aside, operating with renewable, clean energy is something that is good for the world, and good for the environment. With our current technology, we only have access to planet Earth, and we should all be doing our part to keep it in the best condition possible.

Planning the switch may take time and effort and require a strategic roll out across various locations (especially for larger companies) but make no mistake – sustainability and the use of renewable energy isn’t a short-term fad, it’s a long-term global change, and one that is being backed in some countries with mandatory renewable energy targets.

CEOs, Directors, Executives, and Decision Makers have to consider the cost of implementing a change in their business, which admittedly can be expensive, and weigh it up against the potential benefits, the direction of the current and future market, and the way in which consumers are responding to companies who refuse to make changes or do their part to support sustainability – and consider that undertaking the process, when it’s still optional, offers a lot more flexibility and time to implement than leaving it until it’s legally required.

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