Monday, 29th march 2021 | Environment
Marco Arezio - Consulente materie plastiche - How Tech Companies Could Help Reduce Carbon Footprint

Often companies with a strong technological footprint, which have entered the life of citizens in an indispensable way, are accused of little interest in the environment.

Some of them, precisely due to the fact that they offer intangible services, would seem that they do not affect global pollution, while others, which use in their business a part of intangible services and a part of material ones, such as transport in logistics, it would seem that they do not feel called into question in the fight against climate change.

In reality this is not the case as any service, material or intangible, consumes energy, whether electric or fossil, negatively affecting the carbon footprint if this energy is not derives from renewable sources.

But, as Laszlo Varro and George Kamiya tell us, companies that make internet technology their direct or indirect business have become attentive to the problem of their footprint carbon dioxide as this is what customers and the market are asking for.

In the analysis of the data, it was noted that two values have increased in parallel over the last decade: the value of large technology companies on international stock markets and the concentrations of CO2 in the atmosphere.

But in reality there is little direct relationship between these two phenomena: the use of energy by major tech companies is relatively less than their economic footprint , financial and even social.

However it is precisely because of that massive financial footprint, combined with their enormous cultural and scientific influence, that these companies have such a potentially huge role to play in 'face the climate challenge.

The large tech companies have already committed themselves for the most part to achieving zero emissions from their operations. Given their role as often emulated trend setters, these goals set an important example for the rest of the economy.

But it is their work in digitization, artificial intelligence and information systems that could potentially be revolutionary in creating the smarter and more flexible energy systems needed to achieve net zero emissions.

The rise of the big tech companies is undeniably one of the most distinctive financial developments of the last decade. By the end of 2020, the top three tech giants had a market capitalization of $ 5.5 trillion, double that of all German and Brazilian companies listed in Frankfurt and Sao Paulo combined.

The concentration of financial value in the top three tech companies is now twice that represented by Standard Oil, AT&T and US Steel in the era of the Rockefellers and Carnegies.

Tech companies could play a huge role in addressing the climate challenge

Big Tech's energy consumption and emissions are significant in absolute terms, but not in relation to the scale of their operations. For example, data centers account for about 1% of global electricity use, far less than industrial motors or air conditioning as the engine of global electricity demand.

The energy and emissions profile of tech companies obviously varies greatly depending on their business model. Some big tech companies are almost completely digital and electrified.

Others have supply chains for manufacturing carbon-intensive hardware or logistics and delivery systems around the world. Many of these manufacturing and logistics operations are often outsourced and reported in Scope 3 emissions.

Scope 1 (direct) and 2 (electricity, market-based) emissions from the five big tech companies collectively represented about 13 million tonnes of CO2 equivalent in the 2019, or about 0.04% of global energy-related greenhouse gas emissions.

Including Scope 3 emissions - which include business travel, employee commuting, manufacturing and construction - the total reaches around 0.3% of emissions global. Therefore, decarbonising all of these companies' businesses and even their supply chains could have a relatively minor direct impact on global CO2 emissions.

It is also likely that these direct impacts are dwarfed by the enormous potential created by digital solutions applied to energy systems.

But these companies have adopted increasingly stringent and ambitious corporate policies to address emissions.

In addition to general social and political concerns, these changes appear to be partly driven by HR considerations: there is intense competition for technically well-trained young professionals. skilled workers, who increasingly require their employers to take responsible positions on important social and environmental issues, including climate change.

There have been notable examples of technology company employees publicly calling for stronger climate action from their employer, including avoiding the use of learning automatic to support the extraction of fossil fuels.

These considerations focus on the big tech companies based in the United States because the big Chinese tech companies, despite their technical prowess, are sadly still lagging behind in their climate and energy strategies.

The big tech companies have pioneered corporate energy purchase agreements (PPAs) for renewable energy, in fact, in 2020 they bought 7.2 gigawatts (GW) of renewable capacity, representing nearly 30% of all corporate renewable PPAs.

Among large US-based tech companies, it has become standard to commit to getting the same amount of electricity from renewable sources as their annual consumption.

Automatic translation. We apologize for any inaccuracies. Original article in Italian.

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