Capital buildings in Sacramento California are going 100% renewable, and the rest of the government buildings in California will soon follow. The announcement coincides with a new report that investors are pulling about $2.6 trillion out of fossil fuels and into clean energy. Powerful people are finally ready to tackle the climate change issue together.
Last year at Climate Week, it was announced that 181 organizations and 656 individuals were divesting about $50 billion away from fossil fuels and investing in clean energy. This year the money has jumped up to $2.6 trillion, backed by 430 organizations and 2040 individuals as part of the Divest-Invest Movement. These include big time players like Goldman Sachs who has pledged to be carbon neutral by 2020, and Proctor & Gamble who has pledged to increase their investments in clean energy from 7% today to 30% by 2020 with further increases in the decades ahead. That $2.6 trillion is as significant as it sounds as a milestone of the movement, and the momentum is expected to continue.
The concerns surrounding fossil fuels will continue to escalate. Food, water, and energy demands are rising, and they are expected to continue rising dramatically due to population growth and increasing global wealth. The fossil fuel industry is one of the biggest users of water, and they are likely to experience water scarcity, causing costs to increase. Market pressures will force the fossil fuel industry to conserve water and push harder toward renewables. However, organizations should be looking beyond direct financial returns and looking more at how the movement will help their processes overall. It will help protect them against fluctuating fossil fuel prices, and their marketing and branding may soon depend on it.
Renewable energy has never been the best investment. A recent survey showed that 50% of organizations that responded only earned 1%-9% return on their investments. Such low returns are not enough to motivate large organizations to change anything, but the important thing is that they did not lose money. In fact, 20% of the organizations said they had seen a return on their investments in renewable energy of higher than 15%, a more significant direct return.
With so much money being poured into renewables, the initial costs for their installation is expected to continue dropping. Already, solar power is as cheap as coal in much of the world. And by 2030, solar power is expected to cost half of what conventional energy does today. That means that average consumers are likely to join this movement too because they will finally be able to afford to be green. Once consumers take renewables mainstream, companies will no longer have much excuse not to switch from fossil fuels to renewables.
To get a broader view of the future of energy and to get your strategic team on the same page quickly and effectively, get the Gist of the Future of Energy: Decentralization of Power.