Whitepaper produced by Reuters Plus

The round table hosted by Epson, sustainability experts from around the world convened to discuss sustainability in business.

¹ Reference link: International Energy Agency (IEA) website

² Reference link: IRENA report "Renewable Power Generation Costs in 2022"

But it is not just the price of renewable energy, low as it is, that dictates a manufacturer's ability to move to 100% renewable energy. Both the required initial capital investment and first-mover disadvantage-where it costs pioneers more than those that follow them to deploy new technologies—can significantly slow down a fully renewable transition. Not to mention the lack of availability of certain renewables in certain geographies and the fact that the appropriate infrastructure must be in place for this energy to be delivered—something no one company can do on its own.

Manufacturing requires an enormous amount of electricity in comparison to powering offices. In some countries or regions where the supply of renewable electricity is limited, like Japan, Taiwan, and Singapore, it is much more expensive than electricity produced by traditional means, placing a significant future cost burden on companies that purchase renewable electricity.

Epson is working to popularize the use of renewable electricity, despite the certainty of short-term cost increases. The company is advancing investment in sustainability to enrich communities and invest in future generations to create social value.

Wherever they are in the world, with whatever types of renewable energy available to them, companies need to adapt to local, national, and global circumstances. Seiko Epson, based in Japan, has done just that. Having switched to 100% renewable electricity for all its sites in Japan in 2021, it completed the transition to renewable electricity globally by the end of 2023³.

This goal has been made achievable through steady implementation of decarbonization targets and the use of renewable electricity since 2018. In Nagano Prefecture and Tohoku region, Japan, for example, where water sources are abundant, Seiko Epson relies on hydroelectric power.

The company is taking a similar approach outside Japan. In the Philippines, it taps into local geothermal and hydroelectric sources. While in Indonesia, it uses yet another renewable source—sustainable biomass power.
"We have used locally produced energy wherever possible," says Junichi Watanabe, Managing Executive Officer / General Administrative Manager, Production Planning Division, whose role encompasses the promotion of Epson's procurement strategies in the supply chain, including the use of renewable electricity. "Rather than using energy generated in faraway countries, using a particular region's abundant renewable resources brings many benefits, such as improving energy self-sufficiency and creating jobs."

In addition to purchasing renewable electricity, Epson co-creates and develops other power sources through continuous renewable electricity purchases. In partnership with Nagano Prefecture and Chubu Electric Power Miraiz Company, Inc., Japan, the company began support of hydroelectric power plants in Nagano Prefecture. Two are already in operation (totalling 5,770 kilowatts) and another is scheduled to begin operation in 2024. That number is expected to increase to five by 2025.

³ Click here for datails about Epson's decarbonization

Such targets can help a company stand out from the crowd. "Based on our research, setting a near-term goal for 100% renewable electricity use is an example of leadership and a differentiator. Some companies also have roadmaps to transition over longer time periods," says Holdredge.

When it comes to solar power generation systems, Epson's sites also decide whether to adopt self-investment or power purchase agreement (PPA) based on the individual circumstances of each country or region. The solution will vary from company to company. But most manufacturers are likely to find a combination of these elements will go a long way to reaching their renewable electricity goals.
What's more, many manufacturers like Epson realize that their indirect GHG emissions from their entire value chain (Scope 3) are much greater than the GHG emissions from their own electricity use (Scope 2). As such, by reducing the sector's Scope 2 emissions using renewable energy—something the sector can do independently—is likely to have a far greater impact on society. Setting goals early and demonstrating a company's stance toward solving climate change is the key to co-prosperity with suppliers and a sustainable society.

"For large companies the return on investment is there to make the case for investment in renewables. For smaller companies this can also be true, but it depends on the geography. Government incentives can only speed up transition which is sorely needed," says Christy Slay, Chief Executive Officer of The Sustainability Consortium.

There are big gains for humanity if climate change can be addressed, but for manufacturing companies and their shareholders the best approach could also deliver commercial gains.

Consumers and investors are increasingly likely to reward companies with greener credentials, making it an essential part of long-term market positioning. In addition, greater use of renewables and greater self-generation can make a company more resilient to volatile electricity prices on the open market.

"Reaching 100% renewable is tough but pushing to get as close as possible, as soon as possible should be every company's focus right now," says Slay.