How green became the new black for Orsted
As companies embrace sustainability goals, they’re taking incremental steps to conserve and reuse in various parts of the supply chain. Some are working with suppliers to reduce water use in farms. Others are making electric fleets to transport goods a priority.
But what happens when a company’s core mission and product is connected to goods and services no longer considered sustainable?
That was the dilemma facing the company formally called DONG — Danish Oil and Natural Gas.
DONG had been around more than 40 years, supplying power to customers through oil, gas and coal. But the problems of climate change were all too evident in Denmark, where the average height of the country sits just 100 feet above sea level.
So the company made a commitment, to transform itself from black to green, and in the process changed its name to Orsted, named after a Danish scientist.
“It's a massive and very bold move,” Thomas Brostorm, president of Orsted North America, told attendees at the Ethical Corporation’s Responsible Business Summit in New York Monday.
The power of wind
The switch to green and renewable energy required a complete overhaul of the company’s supply chain, sourcing, operations and branding.
But Orsted couldn’t just stop providing its customers with energy and power. Instead, it started investing in a power source with limitless supply: wind.
“Wind is seen across the board as a reliable [energy] source,” Chris Thomas, chief innovation officer of the Sierra Club, told attendees at the summit.
Orsted built offshore wind farms in Europe, Taiwan and the U.S. Not only did the wind farms contribute to goals of reducing fossil fuel usage and greenhouse gas emissions, but they helped Orsted’s bottom line.
We had a long-term commitment from our board and CEO to say, ‘we want to be more green.'
President, Orsted North America
In 2017 “for the first time in history, it has become cheaper to build and operate offshore wind farms than new coal- and gas-fired power stations,” the company states on its website.
Offshore wind farms have their fair share of skeptics, however. Many argue their construction disrupts marine life, and they threaten the natural beauty of coastal landscapes. The turbines also pose a risk to birds.
“There's always that dilemma,” Brostrom said. “We think it's better for environment, but then you kill a bird or two.” He said Orsted uses data to study birds’ flight and migration patterns, and the company has worked with that data and its suppliers to minimize risks to wildlife. For example, increasing space between the turbine’s arms helped decrease the risk to birds flying near the turbines.
Approaching transformation from all sides
With consumers caring more about the good of the planet and renewable energy, companies can’t afford to fall behind on sustainability goals. “People are becoming more activist-oriented,” Thomas said, pointing to examples of the weekend’s “March for Our Lives” across the U.S., where hundreds of thousands protested in the streets for stricter gun control after a school shooting in Parkland, Florida.
“We wanted to lead by example,” Brostrom said, and it seems other energy companies may be taking the cue. Shell released a report Monday outlining a future with reduced fossil fuel use.
Partnerships with research institutions and non-profits can help companies overhauling their operations and end-to-end supply chains.
Orsted signed a research agreement with the University of Oxford to optimize offshore wind turbine design. The Sierra Club partners with numerous companies, including Patagonia and Salesforce, to further their sustainability goals.
But perhaps most critical to changing the fundamental nature of a company’s operations is a top-down leadership approach.
“We had a long-term commitment from our board and CEO to say, ‘we want to be more green,’” Brostrom said.
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