Looking for unique opportunities, integrating ESG and starting small
In 2013, Alain Desvigne co-founded Amarenco, a company dedicated to deploying solar power around the world. Today, the organisation employs 145 people in 10 countries and has invested more than EUR500 million in solar projects.
With 173,000 terawatts striking the earth continuously – that’s more than 10,000 times the world’s total use – solar energy is the most abundant resource we have. For this very reason, renewable energy is projected to account for more than half of global electricity production by 2035, a key component to our transition from fossil fuels.
The co-founders of Amarenco – an independent power company headquartered in Ireland – sensed an opportunity in 2013. The company works closely with farmers, local authorities, businesses and real estate developers to invest in, build and operate power plants and ‘unlock the untapped economic advantages’ of this energy source.
To date, Amarenco has developed more than 2,000 solar photovoltaic infrastructure projects, with many more currently underway. Current ventures include the construction of eight solar farms in Ireland and the acquisition of a 50-MWp (megawatts-peak) solar farm in Spain.
“We were a team of four who shared the opinion that solar was going to become the main source of energy power,” says co-founder and CEO Alain Desvigne. “This was back in 2012, so it was still a bet – it certainly wasn’t confirmed.
“But the way we looked at it was that there was a real chance for it to become competitive. Today, we have projects that cost less than 2c per kilowatt hour. In the UK, for example, you consume electricity at 12p to 15p to 20p. So, the price of electricity being produced by solar infrastructure is very, very cheap.”
Solar also has the lowest carbon footprint of any energy source. “Because of climate change, the story was obvious – we had to decarbonise the energy mix. Even today, 85% of energy is from fossil fuel, so we knew the ramp up was going to be huge.
“Finally, solar is the only form of energy that is multifunctional. With wind or gas turbines, their purpose is simply to produce power, but solar is ubiquitous – if you put it on rooftops it can protect and shelter buildings or livestock, all while producing power. You can solarise car parks. You can plug it anywhere and on anything.
“All of these aspects informed our decisions when it came to starting the company – because these are what makes this energy source unique. That’s why we as a group decided to focus on solar and solarised structures.”
But how can forward-thinking companies follow suit and successfully combine profit and purpose? The key, according to Desvigne, is having the right shareholders. “If you don’t have them, I would say you either need to convince them to change or you have to change them. If you’re very clear with where you want to go, you need to find a pool of capital and the people who are managing it need to have the same mindset.
“You have to all be aligned regarding the fact that you might not get your 12% return over 20 years, instead you might get 11.5% over the same time horizon because of your ecological regenerative mindset. But when you push to a 30-50 year investment horizon, you might do even better than 15%. And you all have to be mindful of the fact that 11.5% is just the short-term outcome, and that in the long run there is more value to be created.”
But what if sustainability isn’t naturally at the heart of a business’s purpose? How can leaders still ensure they are incorporating strong ESG practices into their long-term strategy?
“Any company can decide to shift its mindset by asking, ‘how can we do less harm and focus on having a positive impact?’” says Desvigne.
“The first step is to simply choose the factor that makes most sense to your company – one that allows you to build on your current success.
“So, say you decide to focus on environment, and you are an industry that is consuming plastics in a way that is damaging – by oversupplying or not recycling. You start small and assess how you can change that behaviour.”
The next step, according to Desvigne, is to measure and track the impact of these actions. “This is where we use KPIs. It’s about saying: ‘Today, 10% of my plastic goes to waste – how can I move on from that so that it goes from 10 to nine to eight?’ That’s how you build your ESG roadmap.”
But he cautions against objectives that are too lofty. “The worst thing is when you aim too high and fail on all accounts – then everyone ends up demotivated.”
Findings by the Changing Markets Foundation – which analysed internal commitments from the 10 biggest plastic polluters – echoes this sentiment. For example, in 1990 one of the world’s leading soft drinks companies pledged to make its bottles from 25% recycled plastic by 2015. More than 30 years later, the target is nowhere near completion.
“The world is in crisis, but if we rush, then everything we do will fail and then we’ll fail as a whole. It’s better to start small and go gradual rather than trying to say, ‘I’m going to change everything right now.’”
2000: Graduates from the French water engineering school ENGEES
2000: Joins a portfolio company of Engie as a technical & commercial manager
2003: Appointed business unit manager & board member of the portfolio company
2007: Joins the chairman’s office of Samsung in Korea
2013: Co-founds Amarenco in Ireland