AWEA Blog - Will Michigan policymakers follow the private sector’s lead?

The Michigan Forum is an opportunity for the state to reflect on the benefits it enjoys from the renewable energy industry and to consider the path ahead. Many may look at Michigan and see an opportunity for both economic growth and investment. Following Governor Rick Snyder’s call to increase the state’s renewable energy and energy efficiency goals, Michigan has an opportunity to boost both.

At Pax World, we see tremendous value in clean energy across the many industries we invest in. We are an investment management company that seeks positive impact by investing in solutions-oriented companies and engaging directly with companies to improve their environmental, social and governance (ESG) performance. We believe this leads to improved returns for shareholders. 

There is a tremendous story to be told about the jobs and opportunities coming from the various industries represented at the Forum—the wind industry has generated over $2 billion of investment in the state.

What might surprise you is how much non-energy companies are getting into the business of renewable energy to better their bottom line—that’s good for their customers and good for their investors. A recent study, Power Forward 2.0, found that among the Fortune 100, clean energy goals are saving companies $1.1 billion annually in energy costs. It is no surprise then that 60 percent of the Fortune 100 companies—and 43 percent of the broader Fortune 500—have renewable energy, energy efficiency, and/or greenhouse gas reduction goals.

Just looking at the scale of the projects shows how serious these companies are. Microsoft has contracted with two utility-scale wind farms just in the past year: a 100 megawatt project in Texas and a 110 megawatt project south of Chicago. Mars, IKEA, and Facebook have similar projects either completed or underway. Google alone has invested over $1 billion in renewable energy projects. In Michigan, Ford, General Motors, and IKEA all have solar arrays helping power their operations.

Good policy helps drive investment and companies are choosing to deploy projects in states with strong policy. In some cases a strong renewable energy commitment in a state is determining whether or not a company comes to a state. Nebraska reeled when Facebook passed it over for Iowa, in part because of the robust wind industry in Iowa. Sadly, Michigan was on the losing end of one of these decisions. In 2010, American Express passed over Michigan as it was trying to build a data center. In a letter to the state’s economic development agency, the company said it sought “a community and state whose power providers are seen as environmentally friendly.” Michigan has one of the lowest renewable energy standards in the country.

Michigan’s work reaching its renewable energy standard is laudable, but it risks missing out on investment if the state doesn’t raise the bar. Governor Snyder has called for raising the state’s renewable energy and energy efficiency goals. As the legislature gears up for the coming session its members should heed the Governor’s call and take note of what is happening at the Forum and in boardrooms around the country.

Article Co-authored by Julie Fox Gorte, Ph.D. (Michigan State ‘80), SVP for Sustainable Investing, Pax World Management LLC and Greg P. Hasevlat, Sustainability Research Analyst, Pax World Management LLC

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