Climate change was on the list of top issues to address at the Group of Seven summit last weekend, but it was not a priority for U.S. President Donald Trump.
Trump skipped the G7's discussion on global warming and refused to support joint statements from the six other participating nations reaffirming their commitment to the Paris climate accord — which Trump announced one year ago that he plans to abandon.
In response to the leadership vacuum left by the U.S., corporations continue to step up their efforts to combat climate change and boost investments in low-carbon energy resources.
Large-company CEOs have rushed to sanction renewable power-purchase agreements in the past year, and this month a group of institutional investors called on the G7 to phase out coal generation altogether.
“The global shift to clean energy is under way, but much more needs to be done by governments,” warned the 288 investors, which jointly manage $26 trillion in assets, in a statement delivered in advance of the G7 summit that started in Canada on June 8.
Countries and organizations sticking to the United Nations Framework Convention on Climate Change’s Paris Agreement would see significant economic benefits and attract increased investment, the investors said.
The companies signing the statement included Allianz Global Investors, Australian Super, Aviva Investors, the California Public Employees' Retirement System, DWS Investments, HESTA, HSBC Global Asset Management and Nomura Asset Management.
The message came “despite strong opposition from Washington,” Reuters reports.
A survey released this month by the Overseas Development Institute, Oil Change International, the International Institute for Sustainable Development and the Natural Resources Defense Council (NRDC) found the U.S. still spends $27 billion a year on fossil fuel subsidies.
“The U.S. ranked the worst among the countries with the world's largest economies, which include France, Germany, Canada, Great Britain, Italy and Japan,” said NRDC in a press release.
Between them, the G7 governments are still providing at least $100 billion each year to support the production and consumption of oil, gas and coal despite repeated pledges to end fossil fuel subsidies by 2025, it said.
In contrast, a growing number of CEOs now seem convinced of the need for urgent action to curtail greenhouse gas (GHG) emissions.
During Climate Week last September, GTM reported that 110 corporations with a total energy consumption of 150 terawatt-hours a year had signed up to a commitment of achieving 100 percent renewable power by 2020.
According to GTM Research, meanwhile, corporate solar installations exceeded 3 gigawatts in 2017 and the U.S. now has 11.6 gigawatts of projects with corporate or commercial offtakers.
There are signs that the rush to renewables is extending beyond high-profile early adopters such as Apple, which announced it was globally powered by 100 percent renewable energy as of April, and Google, which met its fully renewable target the same month.
The U.K. banking giant Royal Bank of Scotland, for example, last month introduced new energy financing policies to “support low-carbon transition.”
In a press note, the bank said: “These changes follow the bank’s substantial reductions in fossil fuel exposures and growth in renewables in recent years as it refocuses its business on the U.K., Ireland and Western Europe.”
There is some uncertainty over how credible these announcements are. The World Resources Institute last month said an analysis of 35 large development and commercial banks had found that “by and large, banks are unable to convey their overall climate progress.”
“Many that report on climate-friendly ‘green’ investments, for instance, do not fill in the other half of the picture by also reporting on financing of activities and technologies that contribute significantly to GHG emissions, known as ‘brown’ investments," according to WRI.
The nonprofit called on more financial institutions to develop science-based metrics and tools that allow them to set performance benchmarks in line with global climate goals. To date, 23 financial institutions, including banks, have committed to greenhouse gas emission-reduction targets in line with the Paris Agreement through the Science Based Targets initiative. An additional 70 companies in this sector have announced that they intend to set a science-based target within the next two years.
In another recent example of corporate leadership, Spain's second largest bank, BBVA, committed to investing €100 billion ($119 billion) in climate-friendly projects by 2025 and cutting its carbon emissions by 68 percent.
Bryce Smith, founder and CEO at LevelTen Energy, an energy trading marketplace, said much of the interest in green power procurement is genuine.
“There was a lot of momentum building on the corporate procurement side before the U.S. dropped out [of the Paris Agreement],” he told GTM.
“It wasn’t as if the U.S. decision on Paris was the driver for that corporate interest, but I think when the administration pulled out that was a real shot in the arm to the corporates," he added. "It was really an extra incentive for them to take this procurement seriously.”
Whatever the motives, for renewable energy interests, the upsurge in corporate procurement appetite is more than welcome. Andrew Canning, press and communications manager at the European wind energy association WindEurope, called it a win-win.
“The private sector currently accounts for around half of Europe's electricity consumption,” he said. “Powering corporate consumers with renewable energy could deliver massive reductions in emissions, save businesses money and make it easier for people to invest in renewables.”