Corporations are being urged to “walk the talk” on decarbonisation following this year’s Climate Change Conference at Sharm El Sheikh, Egypt. Current rates of progress on climate are nowhere near sufficient to meet the goals outlined by the Intergovernmental Panel on Climate Change (IPCC).
“If we want to limit the temperature increase to 1.5C on a global scale, we will collectively need to be adding more than 500GW of renewables per year between now and 2030,” says Miguel Setas, Executive Board Member at EDP, a global energy company and a leader in renewables and sustainability.
At the same time, we have to invest in our networks, making them more capable, flexible, responsive and resilient, both to changes in electricity demand and to more extreme weather
Despite being well above long-term trends, the increase in global renewables capacity in 2021 was under 257GW, barely half the amount recommended by Setas. Meanwhile, European grid operators are clamouring for €400bn to upgrade electricity networks for low-carbon operations. In April, the FT reported that the latest report from the IPCC “was as sobering as any produced by that body to date”.
Since the 2015 Paris Agreement, a growing number of institutional investors have publicly thrown their weight behind climate action – but “there is limited evidence that this attention has directly affected emission reductions”, the IPCC report warned. In September, London-based think tank InfluenceMap said European pension funds do not appear to be engaging proactively with emerging efforts by EU and UK policymakers to create sustainable and climate finance-related policy. At the same time, industry associations representing the pensions sector are cautious toward or opposing developing policy, says InfluenceMap.
Doing more damage than ever
David Wallace-Wells, bestselling author of The Uninhabitable Earth: Life After Warming, says that while recent years have seen action on climate moving quickly, it is not quick enough.
We are going to hit a new emissions peak this year
“What that means is we are doing more damage to the future climate of the planet this year than we have done any previous year in human history. We’re expected to reach a new peak next year, and probably the year after that, as well. It’s perverse to look at that trend and say we’re moving in the right direction.”
Faced with worsening weather events and increasingly dire warnings from climate scientists, EDP is doubling down on climate-related investments, says Setas. The company’s 2021–2025 business plan foresees an investment of around €24bn in the energy transition, €19bn of which is allocated to renewable energy projects. “We’ve been delivering that plan, doubling the annual rate at which we install new renewable capacity to 4GW. At this point, half of our total additions target of 20GW is already secured, which is a very significant milestone,” Setas adds.
EDP's global sustainability strategy is focused on leading the energy transition, empowering communities, protecting the planet, mobilising partners, and boosting a strong environmental, social and corporate governance culture, Setas explains. The strategy is being supported with actions such as providing access to energy in emerging economies, transitioning to 100 per cent electric vehicle company fleets, investing in reforestation and encouraging suppliers to commit to sustainability goals.
EDP’s commitments have just been recognized by the 15th consecutive year by S&P Dow Jones Sustainability Index as the number one company in the world amongst integrated electric utilities.
Focusing on a just transition
EDP’s investments in renewables and focus on empowering communities have put it at the forefront of moves to ensure a just transition for people entering a low-carbon world. In Portugal, for example, EDP embarked on professional reskilling, job creation and other social support measures after closing the country’s biggest coal-fired power plant, in a project that has been selected by the World Economic Forum as a case study of community involvement.
In developing economies, too, EDP is sharing the benefits of clean energy with local communities. The company has contributed more than $200,000 to community projects benefiting villagers close to a 168MW solar project in the Vietnamese province of Ninh Thuan, for example. The contribution has helped create two roads totalling 1.5km, connecting the village to the outside world. “Before we built this road it was very hard for the local people to transport agriculture,” says Nhi Hoang, MarComms and Sustainability Manager at the EDP subsidiary EDPR Sunseap in Vietnam.
The construction and maintenance of solar farms also creates local jobs, Nhi says. “As we develop more solar or wind farms, we hope to empower the local community with either skills or some other form of benefit,” she adds. Getting community buy-in will be key for scaling up renewables deployment to the level needed for the energy transition. “These investments will require a special attention to the local communities,” concludes Setas. “We need solutions of stability, safety and security for the populations where we are developing these.”
