The true catalysts of the 21st century low-carbon revolution will be information and communications technologies: within the next decade, ICTs can help slash up to 20% of our global carbon emissions by helping companies and consumers to more intelligently use and save energy. A fluid and ever-changing ecosystem, ICT touches nearly every industry sector with innovative, personalised and efficient solutions. This digital revolution can also help form the foundation of a collaborative, sustainable global economy, and reach the UN Sustainable Development Goals (SDGs).
In the context of the global climate agenda, ICTs can – and will – provide benefits across the triple bottom line in the form of carbon emission reductions to the generation of additional cost savings, revenues and wider societal benefits. ICTs’ ability to deliver on the 20% emission reduction potential by 2030 will come from its smart application in, among others, the realm of energy efficiency in transport, energy, and real estate sectors. The increased information flow made possible by ICT solutions will uncover hidden impacts and emissions, further optimising our existing systems: in a world where resources are scarce, new technology can help preserve ecosystems: from improved oceanographics, to GPS-technology that tracks deforestation and biodiversity loss. The transition to smart cities with integrated ICT infrastructure will create better solutions for delivering improved energy, water, and transport systems. ICTs are essential for delivering on the ambitious, shared global action plan for sustainability.
Nonetheless there are challenges ahead in the evolution of the ICT ecosystem. As business paradigms change, the issues of climate change and resource efficiency are also becoming increasingly important for the industry itself. How to balance ICT’s role as a catalyst for innovation and sustainable growth, while ensuring industry resilience in a world constrained to a 2-degree global temperature rise?
The ICT industry not only enables climate-friendly solutions for greening other sectors, but is also tackling its own ecological footprint. Twenty-one leading ICT companies have signed long-term commitments under the RE100 framework , a global, collaborative initiative of influential businesses committed to using 100% renewable electricity. ICT companies thus represent almost one quarter of all RE100 signatories today: Telefonica SA is latest addition to ICT industry heavyweights such as Microsoft, Google and SAP who joined the initiative in the past years after it was launched at Climate Week NYC in September 2014. Trump is pulling the US out of the Paris Agreement, but this did not slow down corporates from committing to renewable energy, with RE100 signatories recently committing to the WeAreStillIn campaign. Furthermore, leaders such as Apple are pushing renewables into their own supply chains, helping to accelerate the growth of renewable energy worldwide: Apple recently committed to help its suppliers bring 4 GW of renewable electricity online by 2020.
However, these ambitions are often challenged by practical issues such as procurement constraints, legislative restrictions or unavailability of renewable energy solutions in certain jurisdictions. Behind corporate walls, sustainability and procurement officers are now facing a tough challenge: How to underpin ambitious renewable energy targets with reliable renewable energy solutions?
Luckily renewable energy offerings are developing quickly. For example, on-site solar PV installations are now at cost parity with coal in U.S and Australia. Green tariff programs are increasing in U.S and Europe, as more corporate consumers seek to buy power from renewable energy in regulated electricity markets. Renewable Power Purchase Agreements (PPAs) are booming: Bloomberg New Energy Finance (BNEF) finds that corporate wind and solar PPAs outside the Americas more than doubled in 2016 to nearly 2 GW, with significant growth in Europe and the Asia-Pacific. Furthermore, rules are in place to help companies make credible renewable energy claims: The World Resource Institute’s (WRI) Greenhouse Gas Protocol on Scope 2 Guidance and the Claims Guidance have become somewhat of a bible for the renewable energy practitioners. According to these guidance documents, the fundamental basis for any renewable energy consumption claims is contractual instruments that convey attribute information from generation to end-user. Companies can reduce their carbon footprint by using contractual instruments that meet specified quality criteria. Contractual instruments that are mostly used today are energy attribute certificates – such as renewable energy certificates (RECs) in the US, Guarantees of Origin (GOs) in Europe and International RECs (I-RECs) in jurisdictions without national renewable energy tracking systems.
This clarification on how RECs can be used to lower and account for emissions from the generation of purchased or acquired electricity (also known as ‘Scope 2 Accounting’), has furthermore made RECs the number one instrument utilised by RE100 signatory companies for achieving their bold renewable energy consumption targets. In fact, two-thirds of all renewable electricity purchased globally by RE-100 signatories in 2015 was sourced through unbundled energy attribute certificates (RECs) , as opposed to the shy 3.3% of electricity sourced via PPAs.
This rising popularity of RECs is due to the fact that they are legitimate, reportable, and accessible. Yet, not all renewable energy certificates are equal. A REC only conveys the information that a MWh of renewable electricity was inputted into the grid and is owned by the end-consumer who holds the REC. For corporates who are interested in supporting only recent renewable power plants, or power plants that ensure additional benefits for local communities, eco-labelled RECs have been developed on the market. For example, Guarantees of Origin and I-RECs with the EkoEnergy label ensure that the price paid for electricity is reinvested in new renewable energy plants and helps to minimise the impacts of electricity production on ecosystems, habitats and the biodiversity of species.
Another example is GoldPower, a renewable energy product based on Gold Standard labeled Renewable Energy Certificates (RECs) that not only provides the highest quality of renewable energy but has measurable, positive impacts on communities and the environment in developing countries. It combines robust verification and tracking of renewable electricity generation with additionality, social and environmental safeguards, and transparency through monitoring and 3rd party audits. In the ICT sector, Microsoft and SAP are among leading companies who chose to source GoldPower for greening their international operations.
Looking at the ICT landscape through the climate change lens, smart companies are well aware of economic trends that continue to point to the acceleration in growth of renewable energy sources , as well as the business potential and societal benefits of embracing sustainability:
SAP, for instance, is providing solutions to its customers in projects relevant to the SDGs. The various Internet of Things (IoT) and Big Data technologies from SAP are being successfully used in, among others, Buenos Aires to help mitigate flooding during seasonal rains, which are expected to intensify in the future. While such cloud solutions represent a major growth opportunity for SAP, energy-intensive data centres remain one of the main challenges to tackle, for the market leader in enterprise application software. SAP’s quick growth has also bulked its electricity use and CO2 emissions, adding to the ~2% of global greenhouse gases emitted by the IT sector. Given the significance of its electricity consumption, accounting for one quarter of total CO2 emissions, the company decided to look for a way to power its global operations with 100% renewable electricity. Opting for GoldPower , the next generation of renewable energy certificates (REC), the company started leveraging renewables as a powerful differentiator for attracting and retaining customers, employees and investors.
Lowering risk, saving money and boosting brand value by aligning with the SDGs – all benefits that forward-thinking companies can already expect to cash in for parting from fossil fuels and integrating renewable energy into their business with the use of labeled RECs.
ICT makes it possible for us to even dream about the success of the global Sustainable Development Goals. ICT-enabled solutions are expected to have the greatest impact across eight sectors, where smart manufacturing, agriculture, buildings and mobility contribute more than 70% of the total global emission reduction potential. Access to universal health coverage and education, improved energy efficiency – these would all be out of our reach without the ICT revolution, which now gives us a path of acceleration in every area of our societies. ICTs make it possible for us to think big and scale solutions rapidly. They are the essential levers to transform the digital revolution into a development revolution, and move the globally shared SDGs from vision to action.
To further innovation and clean, low-carbon solutions across the globe, ICT companies now need to ask themselves: ‘how can I leverage smart climate solutions to keep fulfilling my mission? How can I ensure resilient operations in a 2-degree reality?’
This article was originally published in Connect World Magazine.