First Solar

First Solar is a US-based manufacturer of solar photovoltaic (PV) panels. Headquartered in Arizona, the company is the leading global supplier of thin-film modules that are used primarily in utility-scale and commercial power plants. The company has manufacturing facilities in India, Malaysia and Vietnam as well as the US and operates a sector-leading approach to the manufacturing and recycling of its solar modules.

Engagement objective

Substantive reductions in greenhouse gas (GHG) emissions across all scopes and net zero carbon (NZC) emissions by 2050.

Background

Despite its products representing a critical technology in decarbonising the global economy, First Solar is one of the strategy’s top GHG emitters by financed emissions. An additional frustration of ours has been that the company has failed to capture the opportunity to use its own panels to help reduce their own Scope 2 emissions.

We have therefore been engaging the company on this, as well as other issues, jointly with the Investors for Sustainable Solar initiative¹.

Actions

We took part in a group call with First Solar’s Head of ESG and Sustainability, along with our collaborating investors, in which we pushed for reduced Scope 2 emissions by replacing fossil based energy sources with renewable energy and increased energy efficiency.

During the latest call, in December 2023, the company highlighted its commitment to sourcing 100% renewable energy by 2028. Disappointingly, this has been pushed back by two years primarily due to First Solar’s considerable growth rate, which will cause a continued increase in its emissions through to 2026.

More positively, the company has now received Science Based Targets initiative (SBTi) validation of both their near and long-term NZC targets and has published a carbon reduction roadmap.

Outcome: Milestone 4 - Company provides evidence that the issue is being managed in line with the policy or strategy, demonstrating concerns have been addressed

As the global economy continues to decarbonise, First Solar is positioned to benefit from increased solar demand. Its decarbonisation targets are now aligned with the Paris Agreement, and it is implementing robust systems and processes to reduce its absolute emissions, which we hope to see in the next five years.

Furthermore, in January 2024 we were pleased to see First Solar announce plans for its Indian operations to be 70% powered by renewable electricity provided by its own panels by the end of the year. This is expected to displace 7,000 kilotons of CO₂e emissions over the 15 year duration of the Power Purchase Agreement. On top of this, emissions overall have not increased, which is impressive given the company’s rate of growth.

With us having made a commitment for our investment portfolio to be NZC by 2050, we will continue to monitor the company’s progress in achieving absolute emissions reductions across all Scopes.