Now it is not just 147 countries that have agreed to the global climate targets of the Paris Convention. In addition, 67 percent of the 250 largest companies in the world have formulated their own targets for reducing their carbon emissions (source: “The road ahead. The KPMG Survey of Corporate Responsibility Reporting 2017”).
More and more international companies are setting themselves strict climate targets to satisfy the requirements of their customers and investors. One example is the RE100 Initiative for companies that aim to achieve “100 per cent renewable energies”. The founding members include famous brands such as IKEA and SwissRe.
To put plans like this into practice, companies need innovative solutions. Corporate Power Purchase Agreements make it easier for companies to achieve their carbon reduction goals cost effectively. These long-term supply contracts guarantee clean energy at an agreed price and accelerate the energy transition within your company.
PPA as strategic contribution
The expansion of renewable energies is one of the fundamental principles behind Power Purchase Agreements. The specific form that this added value will take depends on the type of product.
For the Standard PPA , innogy even invests in new plants such as wind farms or solar fields for the customer if so required. These plants can then supply the organisation with clean electricity. Virtual PPAs (also called Synthetic or Financial PPAs) are financial products that promote renewable energy expansion indirectly.
Advantage: image promotion
Investment in the future
Worldwide, there is a growing awareness of the necessity for climate-friendly strategies such as the use of renewable energy. This means that a sustainable orientation becomes an investment in the future viability of the organisation.
Non-financial is the new Financial
Reporting on corporate responsibility now has significant relevance for investors. 81 out of the 100 largest international organisations published data on corporate responsibility in their annual financial reports in 2017. In 2015, only 31 companies did so (source: “The road ahead. The KPMG Survey of Corporate Responsibility Reporting 2017”).
The market for sustainable investments is expanding: the range of ESG-based investment strategies grew by 38 percent between 2014 and 2016 worldwide. ESG stands for “Environment Social Governance”. The term allows financial service providers around the world to evaluate companies specifically with regard to their sustainability commitment (source: Global Sustainable Investment Alliance; Global Sustainable Investment Review 2016)
At the beginning of 2016, the United Nations (UN) formulated the “Sustainable Development Goals” (SDG) to promote sustainability worldwide. The UN goals are not limited to the nations themselves: these also form the framework for reporting in the field of Corporate Responsibility. Several sustainability funds are also committed to these goals, such as the Dutch Pension Fond AGP. Goal 13 states: take urgent measures against climate change and its consequences.
Three out of four private investors are looking for investment products that correspond with their personal values, a global survey has found. According to this survey, investors want to invest in companies that can demonstrate a solid ecological performance and corporate social responsibility. (Source: NATIXIS GLOBAL ASSET MANAGEMENT S.A.; 2016 Global Individual Investor Survey).
Young investors in particular attach great importance to sustainability. An ecological orientation is an important factor for 69 percent of millennials. Among Generation X, 91 percent prefer to invest in ethically managed companies (source: NATIXIS GLOBAL ASSET MANAGEMENT S.A.; 2016 Global Individual Investor Survey).
Investment in climate protection pays off for companies in multiple ways. Not only do we offer you the full range of available Power Purchase Agreements. We also provide expert support to help you communicate strategically to investors about your commitment.
Feel free to contact us!