What does Vestas new year's resolution on emissions mean for wind?

New year’s resolutions. We’ve all done it. Set a grand goal at the start of the year, tell people at work, and then quietly drop it in when it gets a bit tough.

It’s different for companies though. They have to stick with it.

And that brings us to Vestas. We had barely re-occupied the grooves in our office chairs when Vestas set out its plan to become carbon neutral by 2030. To achieve this, it plans to reduce its carbon dioxide emissions 55% by 2025, and then extend this to 100% by 2030.

It said the plan will not use carbon offsets and that it will only deliver planned carbon dioxide reductions via its own actions. This includes electric company cars; renewables-fuelled service vehicles; and other emissions cuts.

Vestas also said its factories and offices have been powered by renewables 100% since 2013. Given that the company has installed more than 108GW of wind farms during its four decades, that seems only right!

But this grander plan will also have ramifications for companies throughout its supply chain, who will need to look at their own operations.

Lisa Malmquist Ekstrand, head of sustainability at Vestas, said cutting carbon emissions in its supply chain was “the next phase of our journey to ensure a more sustainable planet for future generations”. The move has been lauded on social media, with Vestas praised for leading on carbon neutrality.

This is where it gets murky. Vestas isn’t the first to pledge carbon neutrality.

The first high-profile company we recall doing so is blade specialist LM Wind Power with its CleanLM programme, which it announced in December 2016 with a pledge to achieve carbon neutrality by 2018. It has since achieved that milestone, although that includes offsetting for unavoidable emissions.

Likewise, LM parent group GE Renewable Energy has pledged to go carbon neutral by the end of 2020, and Siemens Gamesa by the end of 2025. In the case of the latter, that includes commitments to reduce emissions from its operations as well as using offsetting in some cases.

And utilities are doing so too, with Equinor saying this week it would go near zero by 2050, and others including Iberdrola making similar pledges.

We see the Vestas plan as significant for the market for a few reasons.

The first is that when the world’s largest turbine manufacturer by annual sales says it will do something, others will follow.

This can only be good for the wind sector, where firms are held up to higher green standards than others. It’s the same mentality as those who prefer to criticise Greta Thunberg for hypocrisy than engage with the climate crisis.

This is also likely to start a conversation in the wind industry about the role of carbon offsetting, which appears to be getting a reputation as ‘not really green’ as it simply moves emissions elsewhere. This is unfortunate.

Even if we can argue that carbon offsetting isn’t as good as cutting emissions, we still need to recognise it is likely to be an important tool for companies at the start of their emissions reduction journey.

Those are the big issues. For Vestas itself, the rationale is straightforward.

This shows wind investors and developers that it is taking its environmental responsibilities seriously. With the growth of corporate power purchase agreements, developers are under more pressure to prove to corporates that they are ‘greener than green’ with respect to the companies they work with.

It shows employees that it is taking these issues seriously too.

Let’s compare this to Amazon. We can’t forget the image of CEO Jeff Bezos standing on a wind turbine a to show Amazon’s green credentials. However, it has also been accused of threatening to sack employees who are speaking to the press to put pressure on Amazon to do more on environmental issues. This is a claim that Amazon has firmly denied.

Vestas’s approach should show employees that it is practising as it preaches on the climate crisis. If a firm can keep its employees and customers happy, then it should keep shareholders happy too.

That’s why this is a resolution is can’t afford to break.

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