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Renewable energy is energy derived from natural sources that are replenished at a rate faster than they are consumed, such as solar, wind, hydroelectric, geothermal, and biomass. Unlike fossil fuels, renewable sources produce little to no direct greenhouse gas emissions during operation. The transition to renewables is central to global decarbonisation efforts.
Renewable energy procurement is one of the most direct ways organisations can reduce their Scope 2 emissions. Corporate power purchase agreements and renewable energy certificates have become standard tools for ESG-conscious companies.
Scope 2 emissions are indirect greenhouse gas emissions from the generation of purchased electricity, steam, heating, and cooling consumed by the reporting organisation. They occur at the facility where the energy is generated, not where it is consumed. Companies can reduce Scope 2 emissions by switching to renewable energy sources.
Net zero is a state in which the greenhouse gases an organisation adds to the atmosphere are balanced by an equal amount removed from it. Reaching net zero means cutting emissions as deeply as possible, then removing any residual emissions through carbon removal projects. The aim is to limit global warming to 1.5°C above pre-industrial levels.
A green bond is a fixed-income financial instrument specifically earmarked to raise capital for projects with environmental benefits, such as renewable energy, clean transport, or sustainable water management. Green bonds follow established standards like the ICMA Green Bond Principles and increasingly the EU Green Bond Standard. They provide investors with a way to finance the transition to a low-carbon economy.
Climate risk refers to the potential negative impacts of climate change on organisations, economies, and ecosystems. It is typically divided into physical risks (extreme weather, sea-level rise) and transition risks (policy changes, technology shifts, market repricing). Understanding climate risk is essential for long-term strategic planning and investment decisions.