Renewable Energy Procurement (Scope 2)

Business Case

Brand reputation

Renewable energy procurement demonstrates environmental leadership and strengthens credibility with customers, investors and employees, improving positioning in tenders and ESG performance.

Financial resilience

Renewable energy procurement provides more control and insight into the energy portfolio, reducing exposure to fossil fuel price volatility driven by geopolitical events, supply disruptions and market speculation, and can result in reduced costs from lower price of electricity. As renewable energy mandates and fossil fuel phase-out policies make non-renewable energy progressively more expensive, early movers in renewable procurement secure competitive pricing before demand drives costs up.

Investor confidence

Alignment with ESG investment criteria and climate commitments attracts capital from sustainability-focused investors and lenders, while reducing exposure to fossil fuel-related stranded asset risk.

Operational continuity

The transition to renewable energy drives better energy management, improved monitoring, and cost control across operations and supply chains.

Strategy & Planning

Assessment

Initial Action

Review type of energy procured and how much of the procured energy comes from fossil fuel vs renewable sources, including:

  • electricity sources
  • fuel types purchased for heating, cooling and fleet (natural gas, diesel, propane, etc.)
  • current energy mix being procured (grid mix, green tariff, renewable content)
  • current renewable energy percentage
Intermediate Progress

Conduct on-site energy audits across priority sites to understand efficiency upgrade opportunities to pursue before transitions, including energy‑storage opportunities (batteries, thermal storage) to stabilize renewable supply; and conduct a detailed energy procurement analysis across all sites and operations, identifying specific contract-by-contract transition opportunities, cost implications and available procurement pathways.

Advanced Practice

Conduct comprehensive energy transition assessment across own operations, identifying remaining fossil fuel dependencies and pathways to full renewable energy coverage across all energy types (electricity, heating, fleet) and determine the best-fit renewable energy options (REC, onsite, PPAs, etc.).

Policy

Initial Action

Establish renewable energy procurement policy covering commitment to transition energy purchases away from fossil fuel sources.

Intermediate Progress

Determine procurement pathways to achieve renewable energy goals, including Renewable Energy Certificates, Power Purchase Agreements, Green Tariffs and options for on-site generation, with support from sustainability teams.

Advanced Practice

Commit to 100% renewable energy procurement across all operations with verified additionality.

Targets

Initial Action

Work with sustainability team to set time-bound goal for procuring energy coming from renewable sources that will meet the organization's energy requirements.

Intermediate Progress

Set target for 100% renewable electricity procurement by specified date in alignment with RE100 or geography‑adjusted targets based on local renewable‑market feasibility.

Advanced Practice

Set targets for percentage of total energy procurement (electricity, heating, fleet) covered by verified renewable sources.

Supplier Selection

Screening

Initial Action

Add renewable energy related questions to RFPs for energy suppliers, such as:

  • renewable energy products available
  • source of the renewable generation
  • documentation proving the energy is renewable
Intermediate Progress

Request detailed renewable energy documentation from energy suppliers, including certificate types, generation sources and additionality claims, as well as contract structures, including contract length, price‑stability mechanisms and delivery guarantees.

Advanced Practice

Require energy suppliers to demonstrate third-party verification of renewable energy claims and certificate retirement as a prerequisite to participate in RFP.

Selection

Initial Action

Prioritize energy suppliers that offer credible renewable energy products with clear documentation.

Intermediate Progress

Score energy supplier bids based on renewable energy quality, additionality, documentation credibility and long‑term price‑stability instruments.

Advanced Practice

Select energy suppliers offering the best combination of renewable energy quality, long-term price stability and proven delivery track record.

Contracts

Initial Action

Include contractual clauses requiring energy suppliers to provide documentation of renewable energy source and attributes.

Intermediate Progress

Include clauses requiring energy suppliers to provide annual documentation of renewable energy attributes and certificate retirement, as well as annual minimum renewable‑energy delivery thresholds.

Advanced Practice

Require third-party verification of all renewable energy claims and include contractual renewable energy transition milestones with consequences for non-delivery.

Supplier Engagement

Goal Setting

Initial Action

Communicate renewable‑energy expectations to energy suppliers and establish transition plans with appropriate targets and timelines for each market.

Intermediate Progress

Set time‑bound renewable‑energy transition targets with suppliers. Require contract‑level transition roadmaps, listing when each energy contract (electricity, heat, fleet fuels) will be replaced with renewable alternatives.

Advanced Practice

Develop multi‑year renewable‑energy roadmaps with strategic suppliers for all energy types (electricity, heat, fleet). Require RE100‑aligned 100% renewable‑electricity commitments supported by third‑party verification.

Data

Initial Action

Request detailed energy source data from energy suppliers, including generation mix, certificate types and additionality documentation.

Intermediate Progress

Require energy suppliers to provide real-time or periodic reporting on renewable energy generation, delivery and certificate retirement.

Advanced Practice

Establish shared platforms with energy suppliers for real-time energy source tracking and verification.

Certifications

Initial Action

Verify energy supplier certifications and renewable energy product credentials.

Intermediate Progress

Require energy suppliers to maintain and provide evidence of relevant renewable energy certifications and standards compliance.

Advanced Practice

Require full third-party verification and independent audit of all energy supplier renewable energy claims.

Advisory

Initial Action

Work with energy suppliers to identify opportunities for new renewable energy projects or products tailored to your needs.

Intermediate Progress

Work with energy suppliers to develop tailored renewable products that meet your quality and additionality criteria.

Advanced Practice

Consult with energy suppliers on designing long-term energy transition strategies that align with your decarbonization roadmap.

Financial Support

Initial Action

Signal demand commitment to energy suppliers by consolidating energy procurement volumes and providing visibility on future energy needs to support renewable project planning.

Intermediate Progress

Enter into long-term agreements that support new renewable energy project development.

Advanced Practice

Co-invest in new renewable energy generation or storage infrastructure with energy suppliers.

Audits

Initial Action

Review energy supplier documentation to verify renewable energy claims, including certificate types and generation source evidence.

Intermediate Progress

Conduct on-site visits to energy supplier generation facilities to verify renewable energy source, capacity and operational status match what was contracted.

Advanced Practice

Implement third-party verification programs for all energy supplier renewable energy claims and generation sources.

Project Partnerships & Innovation

Initial Action

Explore joint renewable energy procurement opportunities with energy suppliers.

Intermediate Progress

Co-develop dedicated renewable energy projects with energy suppliers, such as new generation facilities or innovative storage solutions.

Advanced Practice

Partner with energy suppliers on pioneering renewable energy projects.

Continuous Improvement

Metrics

Initial Action

Track the following:

  • percentage of own procured electricity from renewable sources (by site and total),
  • current renewable energy procurement spend as percentage of total energy spend
  • number of energy contracts reviewed for transition opportunity
Intermediate Progress

Track progress indicators such as:

  • percentage of own energy contracts transitioned to renewable sources
  • quality and additionality of renewable energy procured
Advanced Practice

Track indicators such as:

  • percentage of total energy procurement covered by third-party verified renewable sources
  • renewable energy cost performance vs. conventional energy benchmarks
  • percentage of energy spend covered by long-term renewable contracts
  • long‑term avoided emissions, combining electricity, heat and fleet transition pathways

Scorecards

Initial Action

Include renewable energy quality and documentation indicators in energy supplier evaluations.

Intermediate Progress

Integrate renewable energy quality KPIs into energy supplier performance reviews.

Advanced Practice

Evaluate energy supplier contract performance against renewable energy delivery commitments, pricing competitiveness and documentation quality, linking performance to contract renewal decisions.

Impact Verification

Initial Action

Gather feedback from energy suppliers on feasibility of transition targets and availability of renewable products in each market.

Intermediate Progress

Assess whether energy supplier engagement is delivering measurable increases in renewable energy procurement and meeting transition milestones.

Advanced Practice

Calculate Scope 2 emissions reductions attributable to renewable energy procurement transitions.

Sources consulted

Supply Chain Energy Transition (Scope 3) Child Labour