Data centers guzzling electricity and electronic manufacturing plants creating greenhouse gas emissions during product production are often cited as the biggest obstacles to the tech industry in achieving carbon neutrality.
Currently, the tech industry’s carbon footprint ranges between 5 to 10 percent of all greenhouse gas emissions across the globe, said Marta Muñoz, technology for sustainability and social impact practice lead for IDC Europe.
Although the tech industry is not among the worst culprits for greenhouse gas emissions like the oil and gas industry, electric industry, or heavy industrial companies, it holds a dual responsibility for not only mitigating its own carbon footprint but also helping the world achieve carbon neutrality and net zero emissions through its products, services and business models, said sustainability experts.
What Is Carbon Neutrality?
“It’s sort of incumbent upon tech companies to further our ability to stay within our global carbon budget,” said Simon Fischweicher, head of corporations and supply chains for the North America operations of CDP, a non-profit organization that runs the world’s largest environmental disclosure system.
Adopted in 2015, the Paris Agreement was formed to reduce global warming to pre-industrial levels of below 2 degrees Celsius, or ideally 1.5 degrees, by mid-century in order to avert the catastrophic effects of climate change — melting Arctic polar ice caps, rising sea levels, excessive heat and more wildfires.
But recent legislation and the impact of Covid 19 has helped fuel the desire to achieve carbon neutrality as soon as possible, sustainability experts said.
4 Categories of Greenhouse Gas Emissions
- Scope 1: Direct greenhouse gas emissions from sources a company owns or controls, such as a manufacturing plant.
- Scope 2: Indirect emissions from the electricity, steam, heating or cooling systems that a company uses.
- Scope 3: Other indirect emissions that occur as a result of a company’s value chain, such as its supply chain or end-user customer.
- Scope 4: Reducing emissions outside of a product’s life cycle or value chain, such as using teleconferencing or fuel-saving tires.
- Source: Net0 and Carbon Trust
In March, the U.S. Securities and Exchange Commission proposed a rule change that calls for publicly traded companies of a certain size to disclose their Scope 1 and Scope 2 greenhouse gas emissions by the fiscal year 2023. Scope 3 disclosures would come as early as fiscal 2024.
And in December, President Biden signed an executive order calling for net-zero emissions by 2050 for companies wanting to do business with the federal government.
However, the reduction in greenhouse gas emissions that resulted from the pandemic’s lockdown when far fewer people were traveling to and from work in gasoline-powered cars was a wake-up call, Muñoz said.
“Since then, we have seen tremendous change in the speed at which the technology industry has adopted solutions and innovations to become carbon negative,” Muñoz said.
What Is Carbon Neutrality?
Climate change is driving the push to reach carbon neutrality into the near-future.
But what exactly is carbon neutrality you may ask? Simply put, it’s sizing up the greenhouse gas emissions your company, directly and indirectly, is putting into the atmosphere. It’s finding ways to offset the same amount of emissions by adding more trees to the environment. It’s using and investing in renewable energy. And, it’s purchasing unused carbon credits from another company.
Climate Change Definitions
- Carbon Footprint: The amount of greenhouse gas emissions an organization or individual generates at any time.
- Greenhouse Gas Emissions: Gases that trap heat in the atmosphere are called greenhouse gases, according to the U.S. Environmental Protection Agency.
- Carbon Neutral: Offsetting the amount of greenhouse gas emissions produced by a company by purchasing carbon credits, planting new trees, or investing in renewable energy.
- Net Zero Emissions: This means cutting greenhouse gas emissions to as close to zero as possible.
- Global warming: The constant increase in worldwide temperatures due to a rise in greenhouse emissions, which traps the sun’s heat between the earth’s surface and the greenhouse gases.
- Climate Change: A long-term shift in weather patterns, due to global warming. This weather pattern shift contributes to droughts, severe fires, melting polar ice, rising sea levels and freshwater scarcity.
- Source: Neste
“It’s not enough to be carbon neutral,” Michael O’Hara, co-founder of Techies Go Green, told Built In. “It’s quite easy to do if you are a service company like a distributor or reseller. Net carbon zero is really where we all need to be going.”
Net carbon zero involves directly removing the Scope 1, 2 and 3 sources of greenhouse gas emissions from your products and services so that your company is eliminating as much greenhouse gas emissions as it produces.
Tech’s Role in the Climate Change Conundrum
“The tech sector is either solving the climate crisis with the products they develop or exacerbating it by developing technologies that make it potentially easier to extract fossil fuels,” Fischweicher said.
Additionally, the tech industry is also facing a double-edged sword when it comes to managing climate change. The more products and services it sells, while good for business, also throws off more greenhouse gas emissions because more electricity is used to create and run the devices, and more fossil fuel is burned to transport the devices from the factory to consumers.
Data centers and cloud services are electricity hogs and tech manufacturing plants also contribute a heavy volume of greenhouse gas emissions for the tech industry, sustainability experts said.
As a result, these areas of tech can benefit greatly from carbon neutrality efforts to deal with the greenhouse gas emissions that often come when generating electricity through hydroelectric power plants, natural gas and oil.
But Chris Cleet, vice president of policy, environment, sustainability and regulatory for the Information Technology Industry Council, countered that the tech industry’s energy use has remained flat over the past decade when comparing it to the more than 250 percent increase in computing power.
How Is Tech Taking Responsibility for Carbon Neutrality and Net Zero Emissions?
Microsoft, Google, Cisco and Amazon Web Services (AWS) are hiring sustainability experts, a movement that is growing in the tech industry, Muñoz said.
Meanwhile, HP Inc. was the only tech company on CDP’s A List in 2021 that received an A rating in all three of its categories — climate change, forests and water security — marking the third year that HP accomplished that feat.
“We’re on track to exceed our goal of reducing emissions from global operations 60 percent by 2025.”
“HP’s A ratings are thanks in part to our comprehensive and ambitious climate action strategy. They’re also a reflection of the way we’ve integrated sustainability at all levels of the company, including our governance,” David Eichberg, a spokesman for HP Inc., told Built In in an email interview.
HP Inc. managed to directly shrink its greenhouse gas emissions by 9 percent in 2021 from 2019, Eichberg said, pointing to the company’s 2021 HP Sustainable Impact Report.
“We’re on track to exceed our goal of reducing emissions from global operations 60 percent by 2025,” Eichberg said. “That progress, along with our 100 percent renewable electricity goal and the headway we’ve made in reducing greenhouse gas emissions from our fleet, makes me optimistic about the journey we’re on to become carbon neutral in our operations by 2025.”
Reducing Direct and Indirect Emissions For a Carbon Neutral Footprint
Hardware equipment makers have been extremely busy slashing their Scope 1 and 2 greenhouse gas emissions through recycling, Muñoz said. HP, Cisco and Dell are partnering with companies that recycle their equipment, as well as working with partners to identify environmentally friendly metals it can use in their components, she added.
Microsoft implemented an interesting tactic to spur its leaders into reducing their carbon footprint for their division or unit. The software giant implements an internal carbon tax on the division if they exceed their allotted emissions level and that “tax” money goes to the company’s sustainability research and development lab, according to Muñoz.
For HP Inc., most of its Scope 1 and 2 greenhouse gas emissions are related to the electricity it uses to power its facilities. As a result, the hardware maker is aggressively reducing its energy consumption, seeking ways to increase its on-site renewable energy and procuring off-site renewable power, Eichberg said.
Reducing Indirect Supply Chain Emissions
Scope 3 greenhouse gas emissions usually account for the largest portion of a carbon footprint but are the hardest to assess in scope and size, sustainability experts said.
“You know how renewable energy sources you have for your own operations, but when you go beyond your operations it becomes a lot more complicated,” Muñoz said. “You have to know what products and services your supply chain vendors are using.”
You then have to factor in their carbon footprint as it pertains to their handling of your products and services and also take into consideration the end-user’s greenhouse gas emissions when they are using your service or product.
Large tech companies might have a greater ability to get insight on their supply chain’s effort to become carbon neutral or net zero, but tech behemoths may not be doing that, said O’Hara.
Microsoft, for one is not, O’Hara said, noting the Redmond giant has over 400,000 partners worldwide that it encourages to be transparent with their carbon neutrality and net zero plans but doesn’t make it mandatory to be a Microsoft partner.
“Businesses invest heavily to be Microsoft certified. If and when Microsoft makes that a criteria to be a partner, these businesses will have to act,” O’Hara said. “It’s just a matter of time before this happens.”
He added Microsoft will have a difficult time achieving its carbon neutral and net zero emission goals without accurate and extensive information from its supply chain to gather the Scope 3 data.
Under Biden’s executive order on climate change, federal agencies are to consider the social cost of greenhouse gas emissions when doling out contracts.
Tech Products and Services Targeting Carbon Neutrality
Cisco, HP and Dell are also heavily focused on launching new products under a leasing program, where they will take back the equipment at the end of its life and then repurpose or remanufacture it for resale, Muñoz said.
Electric-powered, autonomous vehicles that act as a shuttle or taxi will reduce greenhouse gas emissions from fossil fuel-burning cars and also encourage more people to consider living life without owning a car, O’Hara said.
Smart thermostats, decarbonized buildings that do away with oil and gas heaters, and new technologies that capture and measure carbon emissions are just some of the products and services tech companies are rolling out to achieve carbon neutrality and net zero emissions.
Carbon Neutrality and Net Zero Emissions a Reality One Day — Some Day?
For the tech industry, Muñoz believes 90 percent of the sector will have set their own carbon neutral and net zero emissions goals by 2040. But will they achieve these goals?
“This is the sort of question that I think keeps everyone in the climate space up late at night,” Fischweicher said. “On one hand, we’ve seen a lot of progress from companies that have utilized best practices. But on the other hand, when you look at the overall state of emissions, we are so far off from where we need to be.”
“We need to have a unified vision at a global level. We won’t get there if the U.S. does it but nobody else does.”
In order to move the ball forward with greater speed, tech companies need to think beyond their own operations and that of the industry and collaborate with other sectors to achieve carbon neutrality and net zero emissions, he added.
Muñoz shares that view and is optimistic the goal is achievable by 2050, but with a caveat.
“There are a number of factors and agents that need to come together to make this happen. I’m talking about policymakers, private and public organizations, and the investment industry,” Muñoz said. “We need to have a unified vision at a global level. We won’t get there if the U.S. does it but nobody else does.”
