Design of a practical guide for implementing community energy initiatives and shared value creation in Brazil

Abstract

Since its formulation in 2011 the concept of shared value has been extensively used by corporations in order to show activities developed that created positive social and environmental impact while, at the same time, generating financial return for the company. However, the lack of guidance available for concrete measuring approaches, reporting standards and verification systems has created a situation in which the term shared value is often used inconsistently. In addition, the difficulty for forecasting the impacts of proposed interventions has an influence in the way companies perceive which environmental and social benefits could arise from such activities. Like ways, while investors do give a value to the capacity of their investments for generating impact beyond the pure financial return, there is no available guidance that allow forecasting the shared value created by the investment in company activities. Brazil is a country of continental dimension that has experienced for the first time the consequences of climate change at a big scale. The country experienced during the period of 2014-2016 the worst drought in last 83 years in the south-eastern part of the country, which is the most industrialized region. During this crisis it became clear that the availability of water influences the capacity of the country to maintain its relatively low-emission electricity grid factor which is heavily influenced by the significant contribution of hydropower. In addition, Brazil’s centralized approach for the distribution of energy is leaving behind those communities that have little or no access to energy. The potential of the country for creating distributed generation of energy is relevant but, in order to make possible the development of non-centralised approaches, the country needs changes at the technical and administrative levels. One of the solutions proposed to this situation is the promotion of community energy initiatives, including renewable energy. This investigation has developed a guide for the implementation of community energy initiatives with focus on shared value creation. The proposed approach consists of understanding the potential of regions, sectors and activities for creation of shared value through energy efficiency initiatives, the development of a methodology for forecast of potential shared value created by projects that are at design stage and a questionnaire focusing on understanding the motivations of the private sector for undertaking initiatives focusing on shared value creation. The main conclusion of the proposed approach is that Brazil shows its highest potential for creating shared value through community energy in the north-east region of the country, in household and small and medium size enterprises (SMEs) in the industrial and the agriculture and livestock sectors. The proposed methodology has provided indicators showing only partial capacity for forecasting the generation of shared value. This investigation has not been able to gather statistical evidences from the motivations of the private sector for undertaking initiatives focusing on shared value creation, since the participation of the private sector in the proposed questionnaire has been negligible.