On October 1, 2024, global adhesives manufacturer Henkel completed the switch to renewable electricity at all of its factory sites in the Middle East and Africa region, including Nairobi, joining a growing list of global companies that have taken this path.
This transformation by Henkel included on-site solar installations and external renewable energy sources such as hydroelectricity and wind energy. For example, the solar installation at Henkel’s Nairobi plant currently provides about 95 percent of daily electricity needs on ideal days, with the remaining five percent running on external renewable sources.
Another global company, Epson, in December 2023 completely switched to renewable energy at all of its manufacturing sites around the world. The company switched to 100 percent renewable electricity for all of its sites in Japan in 2021, before repeating this globally by the end of 2023.
Locally, many manufacturers including; Total Energy Kenya, Maisha Mabati Mills, Simba Cement, Unilever Tea Kenya, British American Tobacco, Africa Logistics Properties, Bidco and Devyani Food Industries are also shifting to private power generation.
While some of these shifts may be driven by the quest to lower operating costs through cheaper and more reliable energy, the strong influence of green consumers is accelerating the shift to renewable energy by manufacturers on the global stage.
“Today’s consumers are more environmentally conscious than ever before. They no longer view the company’s environmental impact as a secondary consideration, but rather a key factor in their purchasing decisions,” said Mukesh Bector, Epson’s Regional President for East and West Africa.
This means that more consumers are now prioritizing sustainability when choosing brands – putting pressure on manufacturers to improve their green credentials to compete in a tight market fraught with competition and the erosion of consumer purchasing power due to high inflationary pressures.
Nancy Mwati, director of Henkel’s adhesives plant in Nairobi, said that switching to renewable energy is part of a broader sustainability strategy than just reducing carbon emissions.
“Our shift to renewable energy is about much more than just cutting emissions. It is about setting a standard in Kenya and across the region. We are committed to fostering a future where sustainability and business success go hand in hand,” she said when the company unveiled its renewable energy plant in Nairobi. “Side by side.”
Separate research by consulting firms PWC and Deloitte shows that consumer decisions are more focused on manufacturing using clean energy.
For example, PricewaterhouseCoopers’ 2024 Voice of the Consumer survey in May showed that consumers are willing to spend an average of 9.7% more on sustainably produced or exported goods, even as costs of living and inflationary concerns weigh on them.
The study, which gathered the views of more than 20,000 consumers from 31 countries and regions, found that nearly nine in ten (85%) consumers are directly experiencing the devastating effects of climate change in their daily lives and are prioritizing consumption that incorporates sustainability-focused practices. .
“More than four-fifths (80 percent) of consumers say they are willing to pay more for goods produced or exported sustainably. In terms of price premium, some consumers are willing to pay an average of 9.7 percent more for goods that meet specific environmental criteria, including These are local products, made from recycled or environmentally friendly materials, and produced in a supply chain with a lower carbon footprint, PWC said.
A separate Deloitte survey showed that about 25 percent of consumers are willing to pay a premium for sustainably produced goods.
“A quarter of consumers are willing to pay more for sustainability. This includes paying more to protect biodiversity or for sustainable products and packaging, or for the products or services of suppliers that respect human rights or adhere to ethical business practices,” the consultancy said in its report.
“A third of consumers (34 percent) stated that their trust in brands would improve if they were recognized as an ethical/sustainable supplier by an independent third party. A similar percentage (32 percent) added that their trust in brands would improve if they had a transparent, accountable and responsible supply chain.” Socially and environmentally.
Mr Pector said the shift to renewable energy provides manufacturers with greater green credentials as a key differentiator in the market.
“In highly competitive industries, a strong sustainability profile can be the deciding factor that sets one company apart from another. As companies like Epson have shown, adopting renewable energy not only benefits the environment, it also enhances brand reputation, attracting environmentally conscious consumers, It meets the growing demand from investors for sustainable business practices.
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