The role of long term contracts in your climate & CSR strategy- three issues to ponder on

my preferred way in meeting clients or getting to university is to take the train, but sometimes I can take my bike for a short (30 minutes) ride to get to an event I am interested in. Luckily enough,the headquarters of the Dutch association of multinational companies (VNO-NCW)  is situated near to where I live, so I could take my bike to get to their event on climate change and the role of businesses (June the 3rd).

Three issues keep popping up at VNO-NCW:

1. Will fossil fuel subsidies last much longer? At this moment, the amount of money spent on fossil fuel subsidies (in countries like Indonesia, China) is a far larger amount than the subsidies on green energy. Fossil Fuel subsidies are above the 700 trillion dollars per year, where as green energy gets less than 10 billion.. What can new thinking on fuel subsidies bring to our world? What will it mean for our energy structure, progress, and climate actions if we cut down on these subsidies? The IISD (International Institute on Sustainable Development) has been working on researching these questions, and we hope to hear more from them the coming months. I am curious to know what the energy and petro- chemical companies will make of it in their business scenarios, how will cutting down on these subsidies effect them? What will disinvestment on fossil fuel companies effect them?

2. What will China do on climate change? Will they make firmer commitments, will they step up not only on reducing air pollution rates, but work on a greener energy program the coming years? They are still opening new coal factories every week…

3. How can companies change the way they see themselves as an actor in climate change? We heard the story of the Dutch railway company NS (1.2 million travelers per day, about the same as the subway in Beijing…) , that when they decided to go into a phase where they want to end up being climate neutral in 2020, and thought not only on the measures they wanted to take, but also the role they had as they were thinking long term: This changed how they could approach their main suppliers, with a new ten year contract that could make this happen. They wanted green energy from their supplier, but they didn’t want their supplier to take this from the existing green grid, but that the electricity supplier would build new ventures for their demand in electricity. And because they were in a contract together for ten years, this was doable for the supplier.  Here we can see that its not just the moral issue of being green together that brings together a supplier and a company, but also a green deal for a longer term, that makes new investments possible for the supplier.  Not that a long term deal by itself is a morally good thing, there is no moral claim on long or short term contracts, but the form of a contract create a new business paradigm, something any company can think about when re-discussing contracts with suppliers.

From NS:

Inkoop van groene stroom In 2018 rijden al onze treinen op nieuwe groene stroom. De stroom is afkomstig van nieuw te bouwen windparken van onze energieleverancier Eneco. Zo krijgt ook de energiemarkt een impuls en groeit het aanbod aan groene stroom. Vanaf 2015 rijdt 50% van de treinen op groene stroom en in 2018 rijden we volledig groen. Hiermee wordt het voor reizigers mogelijk klimaatneutraal te reizen over langere afstand. Duurzame ambitie Mobiliteit is verantwoordelijk voor ruim 20% van de CO2 uitstoot in Nederland. Als voorloper in duurzaam vervoer wil de spoorsector haar verantwoordelijkheid nemen. Dit verwachten onze reizigers en andere stakeholders ook van ons. Iedere reiziger die zijn auto laat staan en de trein neemt, stoot nu al 75% minder CO2 uit voor zijn reis. Over een paar jaar zal een treinreis vrijwel geen CO2 uitstoot meer veroorzaken. Nieuwe bronnen NS heeft met Eneco een contract gesloten voor de levering van tractie-elektriciteit. De benodigde elektriciteit, 1,4 terra wattuur (dat komt neer op 1% van het Nederlandse elektriciteitsverbruik en het energieverbruik van alle Amsterdammers per jaar). De groene stroom die we gaan gebruiken is afkomstig uit nieuwe windparken die stapsgewijs in gebruik worden genomen de komende jaren in onder meer Nederland, Scandinavië en België. De energie is daardoor direct herleidbaar naar de bron. NS maakt geen aanspraak op bestaande duurzame energiebronnen. Het aanbod van groene stroom op de energiemarkt groeit hierdoor flink. Ook andere spoorvervoerders mee NS koopt de groene stroom in namens VIVENS, de vereniging van spoorvervoerders, hierin zitten: ProRail, Arriva, Veolia, Connexxion, Kombi Rail Europe, DB Schenker, ERS Railways, HSL Logistik, Rotterdam Rail Feeding en Rurtalbahn Benelux. Infographic groene stroom