How some companies cut corners to achieve renewable energy targets

Hundreds of companies around the world have made ambitious promises to purchase only wind, solar and other types of clean electricity to power their operations. But many of these corporations aren’t buying actual physical electricity from renewable sources. Instead, they are snapping up incredibly cheap instruments known as unbundled renewable energy certificates, or RECs, which allows them to make “100% renewable power” claims while continuing to emit greenhouse gases as before. The practice is also problematic because it does little to encourage the establishment of new wind or solar farms —not a good outcome in the broader fight against climate change.  

In this episode, we talk to Max Scher, head of clean energy and carbon programs at software giant Salesforce, which used to buy RECs but no longer does so.  

“My general fear here is that if we are hyper-focused on… purchasing RECs, we’re going to miss the hard work, the important work, on reducing energy consumption, thinking about siting of facilities on cleaner grids” and other real-world steps to lower the carbon footprint of corporations,” Max tells us. 

We also hear from an analyst at Lazard Asset Management, and from Matthew Brander, a carbon accounting expert at the University of Edinburgh who cautions that buying RECS instead of actual renewable power can be “a very low-cost easy way of making it appear to have reduced emissions.”

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