Money, PR, or Peer Pressure? Why Big Business is Backing Renewables

In January this year Facebook announced plans for another 100 percent renewable energy powered data centre to be built in Clonee, County Meath, Ireland. It will be the company’s sixth data centre worldwide. Facebook is far from being the only corporate giant going ‘green’, in fact the momentum of the renewable energy revolution does not appear to be slowing down.

From huge multinational corporations to the smallest of start-ups, an ‘eco’ approach seems to be a must-do for business to keep up with the pack. So what’s pushing these companies to cosy up to environmental organisations and adopt considerably greener practices than before?

Just a few decades ago, big business and environmental groups weren’t exactly seen to have a loving relationship. So, why have some of the largest entities in the world changed their tune?

Money, money, money

Politicians and business owners have long justified an opposition to climate action, like renewable energy, as an economically oriented move. The main reasons being that moving to renewable energy and away from fossil fuels would have devastating impacts on certain industries and jobs around the world.

Interestingly, this argument has become not only redundant but has flipped entirely in recent years. It’s called the low-carbon economy, whereby renewable energy growth has significantly disrupted long held doubt as to its economic advantages.

“In the early 90s there was a sense that business was holding us back and governments were trying to push forward. Now, companies are coming forward to say, ‘This is important’” says David Levy, professor at the University of Massachusetts.

Whatever is meant by the term ‘important’ is up to interpretation, but it’s quite clear to see that high return on investment is a huge incentive for corporate investors in renewable energy.

Being Good To The Earth Is Good For Your Image

In terms of corporate incentives to go green, many believe the explanation could really stop at the financial incentives, as it’s hard to say that other reasons for change would occur without the money issue. However, the power of positive public opinion as a behavioral incentive cannot be underestimated.

The marketing benefits of investing in renewable energy, while providing lucrative return on investment, also provides a valuable return on public opinion. Buying into wind power or solar power farms sends a strong message to a company’s customer base and fellow corporates that they are committed to the serious issue of climate change.

Mark Kenber, CEO of the Climate Group says “lowering risk, protecting against price rises, saving millions and boosting brand is what shaping a low carbon economy is all about”.

Peer and Public Pressure

A natural progression when one company is getting positive publicity is that others will want in on the attention. When analysing human and corporate psychology one can draw many parallels – one of the most common being the sheep mentality or peer pressure.

It’s often difficult to tell whether the huge corporate trend toward renewables was a push by a large group of corporates or if the majority were pulled along by the few who saw the benefits from the start. Either way, everyone wants a piece of the renewable pie.

Furthermore, advocacy groups and environmental NGOs have exploited this corporate dynamic to their own advantage by creating prestigious awards, ‘clubs’ and public recognition mechanisms that entice companies to reduce their carbon footprint.

Photo Credit: Christopher via Flickr

The Author

Hi, my name is Georgia and I am an editor and content creator working at Australian Solar Quotes. I have a passion for sustainable and ethical living. I want to inform and educate others on sustainable practices like using renewable energy. I invite you to join the conversation by commenting below with your thoughts.