The Big Tech Companies Going Carbon Neutral

Big tech carbon neutral

Big Tech companies say they are going carbon neutral by 2030. That’s the target date in the Paris Agreement for the world to cut carbon emissions by 50% so we can stay below 1.5°C of global warming.

Why is Big Tech Going Carbon Neutral?
The Big Tech Companies Going Carbon Neutral
Photo by Matheus Bertelli

Carbon neutrality is an area of positive competition among technology companies. At least some leaders seem to believe in the mission, and they know their investors and consumers expect progress. Tech only makes up about 3% of global emissions, but that would grow as their users and services expand around the world. The pressure is on Big Tech to do its part for carbon neutrality.

 

So how are the biggest companies doing? Well, they’re all moving rather rapidly to renewable energy sources, and finding efficiencies in their energy usage. But for many, their carbon footprints are still expanding. Here’s our take on some of the biggest companies and the path ahead.

 

 

Big Tech “GAFAM”

 

Google

 

Google promised in 2021 to run all its data centers on carbon-free energy by 2030. CEO, Sundar Pichai said, “So, in the future, every search you do, every YouTube video you watch, every Gmail you send will be powered by clean energy — sources like wind, solar, and geothermal.” The scale of this task seems daunting. According to a report by CNBC, not only does Google have to improve the efficiency of its own data center cooling systems, it will have to push for clean energy in all the regional energy grids where it has data centers. More on this below.

 

Somewhat more controversially, Google claimed to become carbon neutral in 2007 by purchasing carbon offsets. In 2020, it announced that it had offset all of its carbon footprint ever. Great ambition, but this is controversial because off-setting is paying someone else to cut their emissions. Google’s own carbon emissions are still out there, which is why detractors say offsetting isn’t a solution to climate change.

 

Apple

Apple says that its corporate operations became carbon neutral in 2020, and it set a target of achieving carbon neutrality across all its operations by 2030. That means Apple has to make its products and all the suppliers and manufacturers behind them carbon neutral by that year. In 2020, when Apple made the announcement, it planned to make a 75% reduction in emissions from 2015 to 2030, and to use carbon removal technology for the remaining 25%. In its latest 2022 update, Apple said that it had cut emissions by 40% from its 2015 levels, and that most of its supply chain had committed to using 100% renewable energy by 2030. Holding them to that could prove difficult.

 

Facebook

Facebook (Meta) committed to using 100% renewable energy by 2020 in its data centers and to achieving net zero emissions in its supply chains by 2030. It also promised to open itself up to quality assurance in it offset and carbon removal projects. In 2021, Facebook announced that it had achieved its 100% renewable target for its data centers, having cut its emissions by 94% in three years. Facebook said that it achieved this leap by designing “some of the world’s most energy efficient data centers”, and by investing in renewable energy projects in the grids where it has data centers.

 

Amazon

Amazon promised in 2019 to achieve net-zero carbon emissions across all of its operations by 2040. To me, this seems particularly daunting because of the scale of Amazon’s shipping operations on top of its energy use. Transport is the second most polluting industry after energy. Amazon’s priorities are to move its operations to 100% renewable energy by 2030, and to make 50% of all shipments carbon neutral by 2030. Part of this plan is to transition to 100,000 electric vehicles by 2030. By 2020, Amazon said that it had reached 65% renewable energy across its business (up from 42% in 2019) and had become the world’s largest corporate purchaser of renewable energy. Despite this progress, Amazon’s carbon footprint jumped 19% in the same period because of their rapid expansion when everyone stayed home in the pandemic.

 

Last but not least…

 

Microsoft

Microsoft promised to become carbon negative by 2030, meaning it will go neutral then actually start to remove carbon from the environment by 2030. In fact, Microsoft promised to remove all of its carbon emissions since 1975 (direct emissions and consumer usage) by 2050. Ambitious! The plan for getting there involves shifting to 100% renewable energy by 2025, investing in new carbon reduction and removal technology, and charging a $15/metric ton internal carbon tax across its business departments. Like Amazon, however, Microsoft’s carbon footprint actually increased over the pandemic as demand for the Xbox and gaming cloud services exploded. As the company booms, it is projected to open 50-100 data centers every year “for the foreseeable future.” Matching Microsoft’s economic success with carbon neutral ambitions is going to be very challenging.

 

 

Other big tech companies going carbon neutral

 

A recent report by Afiq Fitri at the Tech Monitor delved into the best and worst performers in going carbon neutral in the global tech industry. The report found that Japanese giants, Hitachi and Toshiba, made some of the biggest and fastest in-roads in cutting their carbon emissions. UK-based BT and Vodafone communications companies had made very respectable progress, although from a heavy carbon emissions baseline. On the other hand, the report found sharp increases in carbon emissions from cloud services, such as Oracle, and networking equipment companies, such as Cisco. Given the upward trends in home working and data usage, the report‘s findings underscore the uphill battle for Big Tech to go carbon neutral.

 

 

The path ahead for Big Tech companies going carbon neutral

 

Although practically all Big Tech have promised to be carbon neutral somewhere between 2030 and 2040, I think they are facing three main hurdles.

 

Hurdle 1: Energy suppliers and governments have to step up

 

The first is that Big Tech doesn’t control regional and national energy grids. The energy sector and governments have to offer enough renewable energy for Big Tech operations to go carbon neutral.

 

Although Big Tech has some influence over the energy sources to their corporate offices and data centers (so-called Scope 1 and 2 emissions), they don’t fully control the carbon footprints of their supply chains (so-called Scope 3 emissions). Scope 3 emissions are generated by thousands of suppliers in different countries with varying levels of access to renewable energy in their national grids. For big tech to make their scope 3 emissions carbon neutral, the suppliers and the countries where they operate have to move to 100% renewable energy. For Asian suppliers that are growing rapidly, that will be a tall order. China and India, for example, remain determined to expand coal-powered facilities. Big Tech can apply pressure, but international diplomacy to limit climate change will have to succeed too.

 

Hurdle 2: Big Tech has to achieve a “Moon Shot”

 

The second hurdle is that Big Tech can only really manage the trade-off between constant growth and carbon neutrality by inventing multiple, complex, big engineering solutions. To bring down carbon emissions whilst growing, Big Tech is promising to invest billions in renewable energy projects, energy saving solutions for their data centers and carbon reduction and removal technology. I guess this is why Pichai called Google’s carbon neutral goals a “moon shot.” Let’s hope they all succeed.

 

Hurdle 3: Convincing consumers and investors

 

The third big hurdle is how Big Tech conveys their progress direct to their carbon-conscious consumers and investors.

 

Clearly, there is some corporate dissatisfaction with the ESG scores assigned by the Wall Street ratings firms. Tesla CEO, Elon Musk, recently called third party ESG ratings systems “a scam” and his fellow corporate innovators didn’t jump in to disagree.

 

For consumers and investors, just looking at absolute carbon footprints is also a bit meaningless. Company sizes and products are so different, so how do I know if this carbon footprint number is relatively good or bad? Carbon-conscious consumers and investors need a standard measure of companies’ carbon intensity per unit sold, and whether that intensity is going up or down over time. This way, they can compare products side by side, and Big Tech can convey their progress and the fruits of their innovation directly to the market.

 

Many of the Big Tech have signed up to public carbon reporting. You can read a bit more about company reporting with the Science-based Targets Initiative, which is helping companies work out how to scientifically measure and reduce their emissions.

 

 

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Tags :
Carbon disclosures,Climate Change,Environment,Greenhouse Gas Emissions,Renewable energy
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