Introduction

This time, I'd like to talk about " RE100 ".
As the shift to a decarbonized economy accelerates internationally, companies are rapidly moving toward adopting renewable energy sources.
A symbolic initiative in this regard is our participation in "RE100."
RE100 is an international initiative in which companies pledge to cover 100% of their electricity consumption with renewable energy, and it plays an important role for Japanese companies in terms of improving their brand value and dealing with investors.
Some readers may not be familiar with RE100, so let me start by explaining what RE100 is.
As I will explain later, I personally believe that this is an initiative that could (and may already be) influencing each country's electricity policies.

What is RE100?

RE100 is an international corporate coalition led by The Climate Group and CDP, in which participating companies commit to switching their electricity usage to 100% renewable energy.
As of 2024, there are more than 400 companies worldwide, including approximately 70 Japanese companies, participating , representing a wide range of industries including manufacturing, IT, finance, and retail.

The significance of RE100 goes beyond simply setting targets; participating companies are obligated to transparently disclose their progress through annual reports and are required to systematically advance the introduction of renewable energy while receiving the scrutiny of global investors, NGOs, and market participants.

Case study: Ricoh and Aeon's RE100 initiative and renewable energy adoption

Ricoh Co., Ltd. is a pioneer among Japanese companies.
The company announced in April 2023 that it had switched 100% of its electricity usage in Japan to renewable energy.
" Ricoh and Sansan agree to business partnership to promote digital transformation of accounting operations in small and medium-sized enterprises "

The company joined RE100 in 2017 and appears to have responded by combining a variety of methods, including introducing renewable energy at its own facilities, utilizing renewable energy certificates, and even entering into a corporate PPA.
Through this initiative, we are strengthening our system for responding to ESG demands in the global supply chain.

Additionally, AEON Co., Ltd., a major retailer, joined RE100 in 2020 and has set a goal of converting all electricity used in its stores and other facilities to renewable energy by 2040.
The company appears to be aiming to achieve this goal gradually by procuring external renewable energy sources through solar panels on the roofs of its shopping malls and PPA schemes.
" AEON Report 2024 "

RE100 Trends and Scaling Impact

Among the companies participating in RE100 are major American IT companies such as Google, Apple and Microsoft.
These companies have data centers around the world that consume large amounts of electricity, and they are making a strong commitment to 100% of that power coming from renewable energy sources.

The impact of this move is reaching into the very structure of the electricity market in the host country.
In Malaysia, for example, retail electricity is supplied exclusively by the state-owned Tenaga Nasional Berhad (TNB).
However, as the need for introducing renewable energy increases, discussions on Third Party Access will begin in 2021 in addition to the Large Scale Solar (LSS) scheme and self-consumption renewable energy, and based on the Corporate Renewable Energy Supply Scheme (CRESS) , physical PPAs (direct power purchase agreements) will also be recognized under the system as of 2024.
(I don't know if this is true, but I have heard that the RE100 member companies mentioned above have been lobbying the Malaysian government to approve physical PPAs.)

In other words, the expansion and investment enthusiasm of RE100 companies is not merely driven by environmental considerations; in some countries, it may even be forcing changes to the very design of their infrastructure systems.

Challenges and Prospects Facing Japanese Companies

On the other hand, Japanese companies face several challenges when aiming for RE100, including concerns about the rigidity of electricity supply structures and prices, and the non-additive nature of certificates.
In particular, initiatives that rely on renewable energy certificates such as non-fossil certificates may be criticized by outside parties as greenwashing.

Nevertheless, joining RE100 is a core part of the company's sustainability strategy, and various strategies are being explored, including the use of PPAs, collaboration with aggregators and the introduction of on-site power generation facilities.

summary

As mentioned above, RE100 is not just a certification system; it is an initiative that could have an impact on the infrastructure of other countries.
Participating companies are expected to introduce renewable energy that satisfies three criteria: transparency, additionality, and effectiveness.
These corporate actions may also promote reform of electricity systems and structural transformation of regional economies in each country.
Since companies' choices regarding renewable energy will eventually have an impact on national energy policies and the entire international supply chain, it will be necessary to keep a close eye on the RE100 initiative and the activities of its participating companies.