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Corporate energy goals: guarantees of energy within ESG strategies

June 30th, 2024
Wind turbines

The rise of corporate energy goals means businesses are carefully considering the impact of their businesses on the environment, with many going a step further to consider their business' impact on society. This wider view is called Environmental, Societal and Governance (ESG) strategic planning and tends to be influenced by key stakeholders values. We take a look at best practice for integrating Guarantees of Origin into ESG strategies.

The role of Guarantees of Origin in ESG reporting and sustainability planning

Guarantees of Origin (GOs) are EU-certified guarantees that track and verify the source of renewable energy directly back to the power plant that produced it, confirming the source of the energy is 100% green. This is an element of green power sourcing. 

The key objective of a Guarantee of Origin is that it gives energy buyers accurate information about where their renewable energy comes from, which can be passed on to potential consumers, stakeholders and investors who might want in-depth information about your business' environmental strategies. 

 It's obvious that acquiring a Guarantee of Origin feeds into the environmental element of ESG strategy, but how do Guarantees of Origin satisfy the other two elements, societal and governance? We take a closer look at how Guarantees of Origin can satisfy all factors of ESG frameworks.

Enhancing environmental claims and energy strategy with GOs

Potential stakeholders, consumers and investors may be what's known as carbon conscious portfolio managers, which involves examining all elements of their portfolio to identify the impact of every business connection on their carbon footprint - and this includes potential suppliers or investment opportunities. 

These potential business connections may attempt to work out how dedicated to reducing carbon emissions your business is before they enter a business partnership with you. Providing Guarantees of Origin can help position your business as environmentally conscious business, potentially increasing your chances of new partnerships:

You're investing in renewable energy - Ethically some companies will favour businesses that are investing in green energy and carbon reduction methods. Providing Guarantees of Origin 

You can calculate precisely what percentage of your green energy is - Carbon conscious portfolio managers can accurately calculate the effect your business might have on their own carbon footprint, potentially convincing investors to invest in your business over less environmentally transparent business propositions. 

You're actively reducing your carbon footprint - Businesses actively attempting to reduce their carbon footprint, either voluntarily or to hit carbon reduction targets, may be attracted to companies that look to be actively reducing their own carbon emissions via methods such as renewable energy procurement, and Guarantees of Origin certify this.

GOs as a part of social responsibility initiatives

 Social responsibility tends to identify schemes and projects that impact positively on humans, particularly those in developing nations. Guarantees of Origin bolster the renewable energy industry as they provide a revenue stream for renewable energy producers and as renewable energy producers increase and the industry expands, more jobs in the renewable space are created. 

This is particularly valuable in relation to underprivileged groups or developing nations - for example, the recent Guarantee of Origin schemes developed in Ukraine - as renewable producers are creating job opportunities for these groups in sustainable fields that have potential longevity as the technologies and industry builds. This shows the direct societal impact Guarantees of Origin can have, feeding into social responsibility strategies. 

Governance and Compliance: Managing GOs Effectively

Governance and compliance practices tend to be less altruistic than environmental and societal, but they can be just as vital to ESG strategy planning. Factors of governance and compliance strategy tend to include reporting financial performance, operations and business strategy to investors and stakeholders. 

Guarantees of Origin can assist in this strategic reporting as it provides accurate evidence of energy procurement. Acquiring Guarantees of Origin may also signify that your business is aware of carbon reduction compliance, feeding into general compliance strategy, as well as highlighting how your company's board approaches concerns such as carbon emission reduction. 

Integrating GOs into Environmental, Social and Governance Strategies & Frameworks

There's no ignoring the increase in the importance of sustainability reporting, and ESG is no different - in fact one of the key drivers is to have transparency around your business' values to allow potential connections the opportunity to make their decision to do business with you based on shared ESG values. 

It's imperative that ESG strategies should sit alongside government-led directives, to make sure your ESG strategies align with policies and directives set by the government, both to confirm compliance and potentially reduce penalties and fines associated with impending carbon emissions targets. 

One key directive that should influence your ESG frameworks in relation to Guarantees of Origin is the EU's Corporate Sustainability Reporting Directive. This directive mandates that companies will need to share more information with consumers, investors and stakeholders around environmental and societal risks, which correspond directly with the EGS targets your business may be working towards. This transparency can be aided in part by the acquirement of Guarantees of Origin as GOs give you the ability to verify and track your renewable energy back to the precise plant it was generated from, giving full transparency in regards to the environmental element of ESG frameworks. 

From a societal perspective, Guarantees of Origin can make transparent the positive employment opportunities your investment in renewable energy creates. Investing in renewable energy bolsters the industry, creating more long-term employment opportunities for people in the field of sustainability, hitting societal goals within an ESG framework.  

Case Examples: ESG Success Stories Involving GOs - Kings Cross & Argent

Argent leads the development, asset and estate management of property related projects, namely a large mixed-use residential and retail development in north London called Kings Cross. Argent had an ambitious ESG strategy to reach Net Zero regarding the Kings Cross development. Guarantees of Origin helped Argent achieve these environmental ESG goals in the following way:

  • Procurement of green gas and green electricity to power the Kings Cross development

  • Robust sustainability reporting through the project 

  • Green gas certificates provided total transparency of the source of the green gas energy mix

  • Guarantees of Origin were used to track the procurement of renewable energy for the site, helping to identify the development's net-zero rating.

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