Published November 5, 2021 | 3 min watch
Key Points
- What are the key obstacles to the energy transition?
- How dependable is renewable energy compared to old school fossil fuel energy?
- Which parts of consumer staples businesses are the biggest consumers of energy and sources of carbon emissions (scopes 1-3)?
- What is a realistic time frame over which the energy transition process might occur?
- How significant is the move to renewable electricity in the context of overall energy usage?
- What about other sources of fossil fuel energy (eg in distribution)? How much will it cost and who will pay?
To answer this part of the energy transition equation, RBC Capital Markets invited Ezgi Barcenas, Global Vice President, Sustainability at AB InBev; Deborah Byers, EY Americas Industry Leader, at Ernst & Young LLP; and Kevin Groh, Senior Vice President, Corporate Affairs, at Loblaw Companies Limited.
Three Key Takeaways:
Sustainability is key to business resilience
With operations across the globe in more than 50 markets, InBev believes sustainability makes business sense because the company is trying to build its supply chain resilience, from sea to sip. “It’s first and foremost about supply security, with all the raw materials, energy, water or crops we use. It’s also about innovation and a way to future proof our business and for our colleagues - to give them a sense of purpose and pride in being part of the business,” says Ezgi Barcenas. As part of its 2025 sustainability commitments, InBev has two specific goals linked to energy transition: use 100% of its electricity from renewables and 25% emission reduction across the entire value chain (scope 1, 2 and 3).
Who will pay for decarbonisation?
As the largest retailer in Canada, owned by the 4th generation of the same family, legacy is at the heart of the Loblaw brand. The company, an early signatory of the Paris Accord, aims to show leadership in CSR initiatives, said Kevin Groh. “Loblaw’s objective of reducing carbon emissions by 30% by 2030 has already reached mostly by looking at efficiencies. The conversation is around net neutral now.” The question is switching decarbonisation costs and consumer impact. “When we dim lights to reduce energy loads, this can have an impact on the customer experience, which we don’t want to diminish.” Groh thinks consumers are reticent to pay more for the commitments made by businesses, even if they align with their values.
A commitment by the entire value chain is required
For Deborah Byers of EY Americas, energy transformation is required across the entire value chain in the sector to achieve Scope 3 (indirect emissions through suppliers). “It needs to be cleaner through renewables, by capturing emissions, or through efficiencies like reduce refrigerator leaks. The latter have been a good driver in energy intensity reduction in operations. Sustainability is about reduce and re-use, lifestyle changes for individuals, etc. Consumers and investors are looking for you to achieve these reductions and changes,” she points out. For Byers, the ecosystem concept is very important, with a need for new technologies that can help achieve decarbonisation through entire supply chains, such as blockchain, to improve traceability and validation. We need to create public private partnership and invest in R&D to adopt new technology and bring on change, especially in the transportation sector, she concludes.
