Big firms urged to encourage renewables use in supply chains

Leveraging purchasing power to increase renewable energy use could be 'beginning of something big', says report

Big businesses should encourage more use of renewable energy in their supply chains, a new report has urged.

Research from independent energy supplier SmartestEnergy said that major global brands, many of which have pledged to become powered entirely by renewables, could use their purchasing power in their supply chain to amplify sustainability efforts. 

The report was based on roundtable discussions with 14 major corporates, along with contributions from the Carbon Trust and the Carbon Disposal Project (CDP).

David Cockshott, chief commercial officer at SmartestEnergy, said that large firms should put pressure on suppliers.

“Procurement of renewable energy by corporates is already having a tangible impact on the increasing proportion of low-carbon generation in the energy mix,” he said. “By encouraging their suppliers to also choose renewables they can rapidly multiply their own contribution to climate change.

“Progress is clearly being made but is commitment to renewable electricity really at the level it should be? Given how easy it is to choose renewable electricity in the UK, businesses could be doing more to engage with their suppliers.”

Dexter Galvin, head of supply chain for CDP said that large companies using their purchasing power could make a big difference in increasing the use of renewables.

“A small but growing number of leading private and public sector buyers are beginning to drive supply chain resilience by pushing key suppliers towards renewable energy,” he said. “This feels like the beginning of something big.

“The increased adoption of renewables within global supply chain networks is key to a successful transition to a low-carbon economy, and will be a huge driver in market growth for the sector.”

Guy Rickard, senior consultant at the Carbon Trust added: “For most large companies, engaging with the supply chain is the single biggest opportunity they will have to take action on climate change. One of the best ways to have an impact is through supporting and incentivising suppliers to take action on their own emissions, for example through the purchase of renewable electricity.

“Today we are starting to see some great examples of business leadership where companies are driving real results from supply chain engagement, but if we are going to meet international ambitions on climate then we will need to see efforts accelerating throughout the economy.”

A survey carried out as part of the report found almost all (96 per cent) respondents believe businesses have a wider responsibility to increase uptake of renewable energy through their supply chains. A third (33 per cent) of large firms are now keen to start making renewable energy procurement a requirement on tenders.