Renewable energy is an essential part of the global energy landscape. In concert with our continued commitment to reducing our carbon footprint, we are powering 100% of our owned North American operations with clean energy through the purchase of renewable energy certificates. In this installment of our ongoing responsibility communications series, we explain how renewable energy certificates work and the specific causes we support when choosing the certificates we purchase. Understanding Renewable Energy Certificates (RECs) A Renewable Energy Certificate (REC) represents the environmental attributes of one megawatt-hour (MWh) of electricity generated from a renewable energy resource, such as wind, solar, or hydropower. RECs are an important component in promoting renewable energy and reducing greenhouse gas emissions. Here's how they work: Generation of Renewable Energy: A renewable energy facility (e.g., a wind farm or solar plant) generates electricity. For every MWh of electricity produced, the facility earns one REC. Certification: The REC is certified and issued by a third-party certifying body to ensure its authenticity. These bodies track RECs' creation, transfer, and retirement to maintain transparency and prevent double-counting. Separation of Attributes: Electricity generated from renewable sources and its environmental benefits can be sold separately. The physical electricity goes into the grid and mixes with electricity from other sources, while the environmental benefits (embodied in the REC) can be sold separately. Trading RECs: RECs can be bought and sold in voluntary markets or to meet regulatory requirements. Buyers can be utility companies, businesses, or individuals seeking to claim the use of renewable energy. Retirement of RECs: When an entity purchases a REC, it can retire the certificate to claim the associated environmental benefits. Retiring a REC means that it cannot be sold or transferred again, ensuring that only one entity can claim the renewable energy attributes of that MWh of electricity. Benefits and Uses of REC's Compliance: Utilities and other entities may be required by law (Renewable Portfolio Standards, or RPS) to obtain a certain percentage of their electricity from renewable sources. RECs provide a flexible way to meet these requirements. Voluntary Green Power Market: Businesses and individuals can purchase RECs to reduce their carbon footprint and support renewable energy development. This is often part of corporate sustainability strategies. Tracking and Transparency: RECs offer a transparent and standardized method for tracking renewable energy production and its environmental benefits, preventing double counting and ensuring that claims about renewable energy use are credible. Economic Incentive: By creating a market for RECs, renewable energy projects have a reliable source of revenue, making them more financially viable and encouraging further investment in renewable energy infrastructure. Example Scenario Generation: A wind farm generates 100 MWh of electricity and is issued 100 RECs. Selling Power: The wind farm sells the electricity to the grid, where it mixes with other electricity sources. Selling RECs: The wind farm sells the 100 RECs to a tech company looking to reduce its carbon emissions from the use of purchased electricity. Claiming Benefits: The tech company retires the 100 RECs, allowing it to claim that it has used 100 MWh of renewable energy, contributing to its sustainability goals. “Our North American facilities accounted for approximately 1.3% of our entire Greenhouse Gas Footprint in 2022. By purchasing RECs, Outdoor Research reduced the amount of carbon we produced through our operations, but enabled collective action by funding projects that other companies can join into as well.” – Haylee Utt, Outdoor Research Sustainability Specialist Partnering with Bonneville Environmental Foundation (BEF) We partner with Bonneville Environmental Foundation (BEF) to purchase the RECs that support our North American operations. BEF is a certified non-profit whose mission is to unite partners from all sectors of society, fostering entrepreneurial solutions that tackle climate change and restore freshwater ecosystems. Their ultimate goal? To catalyze a renewable energy future for all. Learn more about Bonneville Environmental Foundation.Because we do not own all the verticals in our supply chain, it's important to note that we don't purchase RECs for our Scope 3 emissions. However, we are continually exploring and examining our supply chain relationships to improve processes, increase recycled materials content, and uphold social responsibility standards and supplier code of conduct. See our Climate Goals blog post for more on Scope 1, 2, and 3 emissions. RECs vs. Offsets: What's the Difference? It's easy to confuse RECs with offsets, but they serve different purposes in environmental sustainability. Both represent the ecological benefits of specific actions mitigating greenhouse gas emissions. However, the critical difference lies in what they represent: Offsets represent a metric ton of emissions avoided or reduced, often through activities like planting trees or capturing carbon. RECs represent the attributes of 1 MWh of renewable energy generation, ensuring the energy produced is from renewable sources. In essence, while offsets help to 'clean up' emissions already released into the atmosphere, RECs ensure the generation of clean energy right from the start. Investing in "Stacked" RECs One of the unique aspects of our partnership with BEF is our investment in "stacked" RECs. Stacked RECs offer a way to recognize and monetize the broader range of benefits that renewable energy projects can provide beyond just reducing greenhouse gas emissions. This stacking can encompass a range of characteristics beyond the primary benefits traditionally associated with RECs. The certification and verification process for stacked RECs is the same as standard RECs (see above).As a non-profit, BEF reinvests a portion of its revenue back into the programs that create renewable energy projects. These projects are run by local non-profits, amplifying the impact of every dollar spent. Benefits of Stacked RECs Enhanced Value: Stacked RECs often command higher prices in the market due to their additional verified benefits. Comprehensive Sustainability: They provide a more holistic approach to sustainability by addressing multiple environmental and social issues. Market Differentiation: Companies can differentiate themselves by purchasing stacked RECs, demonstrating a deeper commitment to sustainability. Transparency and Trust: The certification and verification process for stacked RECs adds a layer of credibility and transparency, ensuring that claims made by buyers are trustworthy. Our Stacked REC's Portfolio Promise the Pod – Promise the Pod focuses on bringing together habitat restoration efforts across the Pacific Northwest to support resident Orca populations. By restoring streams that feed the Pacific, planting trees that enhance regional habitats, and educating the public on the importance of clean food and water, Promise the Pod exemplifies the multifaceted benefits of BEF's approach. West Coast Tree Planting – BEF's West Coast Tree Planting program ensures one tree is planted for every REC purchased. These trees contribute to habitat restoration and recovery and symbolize a tangible environmental impact. Imagine knowing that your commitment to renewable energy is also helping to reforest areas, provide wildlife habitats, and combat climate change at a grassroots level. “Outdoor Research has always been committed to our Pacific Northwest home and playground, so partnering with BEF and purchasing Stacked RECs was a natural win-win for us. We are thrilled to be offered an option where our dollars can keep more carbon out of our atmosphere and stay local to support like-minded initiatives.” – Haylee Utt, Outdoor Research Sustainability Specialist Ensuring Accountability with Green-e Energy Certification To maintain transparency and integrity, all our RECs are third-party verified by Green-e Energy. This certification guarantees that the renewable energy purchased is generated from new facilities, ensuring that it is additive to the grid and not simply displacing existing renewable sources. Green-e certification also ensures that the energy comes from unlimited domestic resources like the sun, wind, and water, providing full chain-of-custody transparency. Businesses like Outdoor Research can have complete confidence in what we've invested in, knowing exactly where our investment goes. In Summary RECs play a crucial role in promoting renewable energy by providing a market-based mechanism to support and incentivize the generation of green power. They help bridge the gap between renewable energy production and consumption, allowing more entities to participate and benefit from the transition to a cleaner energy grid.Our collaboration with BEF and our investment in RECs are just parts of our broader commitment to a sustainable, renewable future. By understanding and leveraging tools like RECs, we can ensure that our operations minimize their environmental footprint and actively contribute to generating clean, renewable energy. As we continue our sustainability journey, partners like BEF are invaluable in helping us meet our current energy needs while investing in the future, ensuring a healthier planet for future generations.
