Many businesses the world over are committing to genuine climate action, which is a great first step in the right direction. Having spent some time over the last few days investigating climate targets by some of the biggest businesses in the world, I noticed a small discrepancy in wording that could turn into unrealistic expectations.
"100% Renewable Energy" by 2025.
It's an ambitious target, pledged by the likes of Microsoft and Amazon, and one that seems almost too good to be true. 100% directly connected renewable power and heating in 4 years time? Across the entire business? I investigated further.
After looking into the definition and methodology more closely, I noticed that the term 'energy' is being used to mean electricity, exclusively. Energy is more often than not reported as both Electricity and Gas consumption by an entity, site, or household. Take the example of a building. That building will be grid connected to power the lights and the vending machines, but it will also have a few gas-fired boilers mainly for heating purposes connected to the separate gas grid. Looking closer into Microsoft's publicly available emissions report from 2019, I noticed that their gas consumption was almost the same size in terms of MWhs as their electricity consumption across their business.
Despite the large quantities, gas consumption for heating isn't mentioned in their 100% Renewable Energy commitment by 2025.
The important point here is that renewable energy should refer to both heat and power. And when a commitment is proposed to power operations by 100% renewable energy by 2025, it should most definitely include natural gas (a fossil fuel) used for heating. If the commitment is only for electricity, it should be called just that (which of course is still a big achievement).
Decarbonisation of heat is an even bigger challenge. Whether it's achieved by electrification, using technologies like heat pumps to remove the burning of a gas altogether, or a substitute to natural gas like hydrogen, the systemic change will be a paradigm shift involving billions in investment.
We need those businesses that are championing climate change to be clear on their messaging. Transparency, methodology, and science-based targets are fundamental, but so is the definition of key terms like 'energy'. Energy accounts for 73% of emissions globally, whereas electricity, the sole candidate in Microsoft and Amazon's pledge, is closer to 30%. Part of that percentage gap is natural gas we use for heating, and it is incredibly important to call that out as a separate target, or include it in the energy target, but ignoring it will not solves the climate crisis.
For policy makers and other businesses it is essential for those leading in climate action to be clear on what fossil fuels are and aren't involved in their targets.