Protecting the environment has been a priority for ALDI for many years. In 2014, the company began implementation of its first international climate strategy, which included the goal of reducing its greenhouse gas (GHG) emissions by 30% per square meter of sales area by 2020.
In 2021, ALDI South, which includes ALDI U.S., went a step further and announced it would join the Science Based Target Initiative (SBTi), committing to reduce its overall operational emissions by more than a quarter by 2025 as part of the company’s 2030 vision for sustainability. Additionally, ALDI has encouraged 75% of its suppliers to commit to science-based targets by 2024.
ALDI U.S. continues to implement initiatives in support of these goals, including integrating solar design for stores and warehouses where feasible, and procuring 100% renewable energy for all of its operations. ALDI achieves this through a portfolio approach using onsite solar generation, competitive retail supply contracts, and independently sourced unbundled renewable energy certificates (RECs). ALDI enlisted 3Degrees to help evaluate its short- and long-term goals, inform the company’s procurement strategy, and execute its first purchase of renewable energy.
Challenges
ALDI outlined several criteria to ensure its renewable energy purchasing strategy was a good fit with its business model. To this end, 3Degrees’ recommended approach needed to:
- Support the company’s aggressive U.S. growth plan
- Fit within its existing energy procurement strategy
- Mitigate potential REC market volatility, while providing flexibility to handle the company’s projected growth and any future changes to how it procures renewable energy
- Provide meaningful impact
Additionally, since this would be its first large-scale renewable energy purchase in the United States, the ALDI team was looking for support educating national and international stakeholders on renewable energy certificates (RECs), their role in a renewable energy purchasing strategy, and the challenges unique to purchasing renewable energy in the U.S.
How we helped
3Degrees took the company’s needs into careful consideration and created a tailored plan to deliver on the ALDI goals of meeting 100% renewable energy for all of its U.S. operations while mitigating risk and providing some long-term price certainty.
We began by engaging ALDI, educating key stakeholders, and completing a renewable energy options assessment which outlined the various paths that the company could take to achieve its goals. As a result, ALDI elected to move forward with a multi-year REC purchase that would serve as the anchor point for its most immediate renewable energy needs in the U.S. but still provide flexibility to explore options beyond unbundled RECs over time. Our work with the ALDI team also supported the business case for a longer-term renewable energy procurement strategy that balances impact and economics while allowing the company to drive rapid adoption of renewable energy within its operating footprint.
“ALDI has been investing in programs to protect the environment for many years now, and our commitment to our climate strategy is a significant corporate priority. We are thrilled to partner with 3Degrees on this unique, multi-year REC purchase, which will play an important role in helping us achieve our renewable energy goals.”
— Dan Gavin, Senior VP of National Real Estate, ALDI
Results
Through its long-term REC procurement, ALDI:
- Is addressing 100% of its U.S. electricity load with renewable energy at a favorable fixed price in the short term
- Sets the stage for its renewable energy procurement strategy to play a pivotal role in achieving the company’s ambitious science-based target GHG goal
- Demonstrates the role RECs can play in enabling a realistic, business-conscious approach to GHG reduction
- Is able to make a meaningful impact in the national renewable portfolio through its investment
