Corporate decarbonisation the key to the global push towards net zero - Image by Paul Brennan from PixabayAs we emerge from lockdowns, environmental goals have become a core focus as global economies and industries plan to ‘build back greener’ – recovering from the pandemic in a sustainable way. This presents an opportunity for companies to commit to their ESG strategies and attract both investors and new business.

Indeed, governments around the world have been announcing scoping policies outlining ambitious decarbonisation goals. Take, for example, Joe Biden’s first 100 days in office. The US President has re-joined the Paris Climate Agreement. He also proposed a $2 trillion green infrastructure plan to deliver a target of 50-52% reduction in US Greenhouse Gas Pollution from 2005 levels by 2030.

While much has been said in the rush to achieve net-zero from a political perspective, the private sector has faced different challenges. Companies are treading the fine line between profitability and sustainability.

Targeting the private sector

Today, green-tech has advanced to such an extent that it is now feasible in many use-cases to replace fossil fuels more cost-effectively. Solar power currently makes up around 2% of total energy production in the US – but we expect that to rise as the cost per watt continues to fall. In the early 2000s, the average US solar system cost was $10/watt. Today, the price hovers around the $2-$3 mark. Similar price falls in wind and hydroelectricity present an ever-weakening argument for the renewed usage of carbon-based power.

Now, this effort towards decarbonisation can be applied across many industries, even those that were traditionally hard to decarbonise. Such as mining, which currently contributes 4-7% of global greenhouse gasses. It is an industry currently attracting a great deal of attention from an ESG perspective. Mining giants such as BHP and Glencore are aiming to achieve net-zero by 2050.

How can companies achieve net-zero

Converting mining fleets to zero-carbon would be a huge step in getting there, VivoPower has targeted this need in particular.

Tembo – a specialist battery-electric and off-road vehicle company that converts Toyota Land Cruisers and Hiluxes to full EVs for industrial use, especially in the mining sectors. It has made it possible for mining firms to reduce their footprint without hurting their operational capabilities. Last year, VivoPower announced a US$250 million deal to distribute Tembo’s all-electric utility conversion kits in Australia. We also entered a deal to green the Canadian mining industry this past month for US$120m. These recent deals demonstrate that corporate decarbonisation is gathering pace across the global mining industry. Whilst electric vehicles will not prompt complete carbon neutrality, they highlight a position from which companies can make environmental progress in an industry that is a high polluter. In June 2021 we reached what was perhaps our biggest deal as VivoPower announced it had entered into a partnership with the world’s largest car manufacturer, Toyota, to create a collaboration program between the two parties for the electrification of Toyota Landcruiser vehicles using Tembo convertors.

Attracting less attention around discussions of ESG is entertainment. However, given the size of the industry and the expected growth when restrictions end, scrutiny surrounding its ESG credentials are likely to increase. In this context, Premier League soccer club and NFL host Tottenham Hotspur has partnered with VivoPower to provide green solutions for the club’s stadium, training ground, and electric vehicle solutions for transport.

Benefiting the planet and the investor

As companies and governments continue to decarbonise with increasing urgency and economic incentive, investors are presented with the opportunity to help support the transition. To indicate the kind of growth expected in providing green solutions, the S&P Global Clean Energy Index has risen 91.7% (at time of writing) over a turbulent year in the wider markets. As a result, specialised companies with the capacity to provide green energy and infrastructure that can be tailored to the precise needs of a company will thrive.

While VivoPower is one of a few firms that occupy this area, I feel it could develop into a sector that will have to sustain rapid growth to keep up with demand as more firms look to decarbonise. Indeed, this will be pushed further by investor interest in ESG compliant companies in the first place. Four in five companies plan to introduce ESG measures, according to a global Willis Towers Watson report. These measures are primarily driven by the desire not to be left behind by a global investor shift towards ESG funds. Investment in these funds more than doubled over 2020 – capturing $51.1 billion of net new money from investors.

Ultimately, waiting for technology to evolve to a point where businesses can address their carbon footprint is no longer a valid excuse. Those who aren’t employing carbon-neutral tactics will likely be left behind as environmental scrutiny continues to grow.

VivopowerVivoPower is a sustainable energy solutions company focused on battery storage, electric solutions for customized and ruggedized fleet applications, solar and critical power technology and services. The Company’s core purpose is to provide its customers with turnkey decarbonization solutions that enable them to move toward net zero carbon status. VivoPower is a certified B Corporation with operations in Australia, Canada, the Netherlands, the United Kingdom and the United States.


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