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Report

Correlation between companies committing to 100% renewable electricity and achieving above-average financial performance

"This study shows that there is a direct correlation between committing to 100% renewable electricity and achieving above-average financial performance. RE100 members consistently perform better than their peers on two key financial performance indicators, selected for their importance to assess a company’s profitability: net profit margin and EBIT margin (Earnings Before Interests and Taxes). The difference is significant, ranging from 0.3 to 7.7 percentage points (excluding outliers), and remains true across all sectors...

The analysis shows a strong link between good financial performance and having an ambitious renewable electricity strategy. It is not possible to assess causality from this analysis alone. Companies with greater profits might be more likely to invest time and resources in developing a strong renewable electricity sourcing strategy, supporting potential additional upfront costs to enjoy the benefits in the medium term.

However, there is straightforward evidence that companies embracing the opportunities created by the clean energy transition are also leaders in their sectors. This should convince their peers that setting a 100% renewable electricity target is a smart business decision, either because it helps a company to outperform its competitors, or because setting such targets is becoming established as a priority by market leaders."