Energy-Credit Buyers Beware

Companies are increasingly touting their green side, hoping that their show of conscience will appeal to customers and maybe even help the planet. One way they’re doing this is by buying renewable energy credits (RECs), instruments that, in theory, offset the environmental impact of the purchaser’s “dirty” energy use by subsidizing clean energy from renewable sources such as wind. Companies like Starbucks, Johnson & Johnson, Staples, and FedEx Kinko’s are all prominent energy-credit buyers, and, last January, Whole Foods Market stunned even these giants by buying enough RECs to offset 100% of the company’s annual electricity use—the largest wind-energy credit purchase in U.S. history.