New Hampshire businesses are using solar power more and more for their energy needs. The New Hampshire Business Review reached out to a panel of experts, including McLane Middleton attorney Viggo Fish, to discuss what business should consider when looking into solar power.
Q: Why should a business consider incorporating solar or renewable energy beyond the cost savings?
A: Growing concern for the effects of climate change and the related world-wide necessity for sustainable building and development is shifting investment and customer decision-making increasingly toward environmental, social and governance (ESG) business practices and evaluation of investment risk factors.
Federal regulatory changes requiring ESG-related accounting and reporting are also causing companies to integrate and prioritize ESG considerations into their core business objectives and operations.
On March 21, 2022, the U.S. Securities and Exchange Commission (SEC) proposed changes to its climate change disclosure requirements that, if adopted, will require regulated companies (and to some extent those with whom they do business) to publicly disclose specific information about their greenhouse gas (GHG) emissions, their climate change risks, impacts and opportunities likely to have a material impact on their business, as well as other ESG-related information.
Ultimately, companies that proactively set clear and achievable ESG objectives and implement practices to track goal advancement, will be better positioned when regulations concerning climate change and other ESG disclosure requirements take effect in the coming months.
The “E” in ESG — environmental criteria — includes evaluation of a company’s energy use, the natural resources it consumes, GHG emissions and its overall contributions to climate change. It also includes all of the company’s efforts to mitigate climate change, conserve resources and promote sustainable operations.
Investing in cleaner sources of electricity, such as solar power, is one way that companies can reach their ESG goals while also benefiting from lower and more consistent and predictable electricity costs. Generating or purchasing electricity from cleaner energy sources allows companies to reduce their GHG emissions and their reliance on fossil fuels and other natural resources — both factors that investors consider when evaluating a company’s investment risks and customers consider when evaluating a company’s overall reputation including its commitment to corporate social responsibility.
The reality is that ESG is entering the mainstream in domestic and international corporate governance. With investors keenly focused on corporate ESG practices, and consumers demanding more environmentally and socially responsible corporate leadership, corporate boards will need to carefully consider ESG strategy and implementation.
Depending on a company’s specific ESG goals, investing in solar power, or other sources of renewable energy, is a straightforward and cost-effective way to demonstrate a commitment to the “E” in ESG.
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