According to a brilliant report published in 2013 by the WWF : ” The US corporate sector, excluding utilities, could capture up to US$190 billion in net savings in 2020 alone by reducing energy related emissions by 3.2 percent each year on average. “
” Between 2010 and 2020, the US corporate sector can unlock up to $1.26 trillion in savings. Unlocking those savings would require capital expenditures of approximately $480 billion, resulting in a savings of up to $780 billion “
You won’t be surprised to read that this would be possible by investing more in increased energy efficiency and renewable energy sources, mainly solar PV.
As the WWF noted on its website :
Companies can capture these unrealized savings from three primary types of activities:
- Improved energy efficiency through behavioral or management changes
- Energy efficiency through technology improvements, and
- Deployment of low-carbon energy, particularly rooftop solar power
$190 Billion in Unrealized Savings in 2020WWF’s analysis produced three key findings about these profitable opportunities which can be achieved with current technologies and policies:
- Low-Carbon Investments Produce Higher Returns. Seventy-nine percent of US companies in the S&P 500 that report to CDP earn a higher return on their carbon-reduction investments than on their overall corporate capital investments. Similarly, those companies with carbon reduction targets secured 9 percentage points higher overall ROI than their peers without targets.
- The 3% Solution Allocates Financial Benefits, Not Environmental Burdens. Some sectors will have an opportunity to reap greater savings based on their share of the potential US$190 billion of profitable investment opportunities. Sectors with higher reduction targets have greater potential profits than sectors with lower targets.
- Modest Increase In Capital Expenditures Is Needed. While the opportunities are significant, most companies are not investing enough to capture them. These savings could be fully realized if the corporate sectordevoted 3 to 4 percent of its capital expenditures to emission reduction investments (excluding utilities)
The report is called the 3% solution, referring to a 3% annual drop of CO2 emissions across the US corporate sector to prevent a global rise of temperatures of two degrees Celsius.
The report was co-authored by Steven Swartz, partner at McKinsey & Company.