🔎 Market Mysteries

To tackle our reliance on fossil fuels, we need the biggest consumers to step up. Big Tech companies, being some of the largest energy consumers globally, are responsible for significant harmful emissions. Although they've set impressive sustainability goals, we can't ignore their impact on the climate crisis.

The world is grappling with an environmental crisis fueled by our insatiable consumption of finite resources. Our actions have led to a complex web of challenges, from our depletion and pollution of water sources to our burning of fossil fuels, trapping heat in the atmosphere, and disrupting the global ecosystem. There may be debate about the severity of the effects of fossil fuel pollution on the climate crisis and the pace of the effects, but in the last few years, we have witnessed things worsening more quickly than scientists predicted. Global leaders are striving to limit the planet's temperature increase to 1.5 degrees Celsius above pre-industrial levels. Last summer was the hottest on record, and just last month, we exceeded pre-industrial temperatures by 1.7 degrees Celsius. This acceleration is alarming, emphasizing the urgent need for action. Climate change is here, and our lives will be spent mitigating its effects. Rebuilding ecosystems or restoring freshwater reserves is not quick work. The most effective way forward is reducing our reliance on fossil fuels.

We’re wasting our time trying to shut down oil companies. They’ll keep pumping as long as there’s demand. We need to focus on reducing demand. Since it’s difficult to track the physical volume of coal or gas burned by individual companies, global leaders have crafted a way to account for the more important aspect: the pollution created by burning fossil fuels. By tracking these greenhouse gas emissions, we can identify which companies are most responsible for the demand for fossil fuels.

Big Tech companies like Google, Microsoft, Apple, Amazon, and Meta play a significant role in global emissions. The whole tech industry accounts for nearly 4% of global emissions. Their massive energy consumption and complex supply chains contribute to this. These companies operate data centers worldwide, consuming vast amounts of electricity and water to cool them. As a result, they are vulnerable to climate change impacts like water scarcity and energy shortages. The combined power usage of Amazon, Google, Microsoft, Facebook, and Apple is equivalent to New Zealand's. With the increasing demand for artificial intelligence and machine learning, their energy and water consumption have only accelerated.

Addressing climate change isn't corporate altruism - these companies face mounting financial risks and supply chain disruptions. Apple, for instance, has a complex and vulnerable supply chain that has already suffered floods and other climate disruptions. Most of Apple's supply chain facilities lie in regions most susceptible to climate change fallout. The escalating water demands for Microsoft's data centers have strained local supplies. Heatwaves shutting down data centers is such a regular occurrence for many in tech that Microsoft has started building them underwater. With the growing frequency and severity of climate events, it’s crucial for Big Tech companies to take action, reduce their emissions, and mitigate climate-related risks.

The good news: a lot. Of course, heightened emissions reporting regulations internationally and abroad have forced companies into action, but Big Tech has been ahead of the curve with ambitious climate goals.

Microsoft, out of the five, has the most audacious goal: to completely eliminate its carbon footprint from the face of the earth. By 2030, Microsoft aims to be carbon-negative, actively removing more carbon dioxide from the atmosphere than it generates, including emissions from its suppliers and products. Achieving this will require not only transitioning to renewable energy for its colossal energy consumption but also developing innovative technology to extract pollution from the air. Microsoft has already made significant investments in renewable energy and aims for 100% of its electricity usage to come from or be matched by renewable sources by 2030. Additionally, it has been a major supporter of carbon capture technology, investing in various experimental approaches like large-scale air purifiers and carbon-absorbing rocks. While Microsoft deserves recognition for its commitment to clean energy and decarbonization, progress on reducing its emissions has been modest. In 2022, its total emissions showed a slight decrease from 2021 but remained higher than 2020 levels.

Google has set a goal to stop adding new pollution to the atmosphere by 2030, and it's all about renewable energy. They want to power their operations with carbon-free energy 24/7, which is no small feat. Some companies buy renewable energy certificates to compensate for the electricity they get from their coal-powered local grid, but Google is different. They're investing in actual infrastructure changes to make sure they're running on clean energy everywhere they operate. It's a commitment that requires significant investment and policy advocacy across local communities. Right now, they're already 64% carbon-free around the clock, but there's still work to be done to further reduce emissions. They're also working to make sure Google users can access sustainable options. Emissions reduction progress, however, is still weak.

Meta has set some ambitious carbon reduction goals, but unfortunately, it still has a long way to go. The company aims to achieve net-zero emissions across its entire supply chain by 2030, but its emissions from the full value chain actually increased by almost 50% last year. However, Meta is not giving up. They are taking a multi-faceted approach to tackle this issue. They plan to reduce direct emissions by improving energy efficiency, investing in electric vehicles, and partnering with suppliers on renewable energy projects.

Apple is setting an example for helping its suppliers, aiming to get its entire supply chain on renewable energy by 2030. That's a big goal for a lot of companies of varying sizes and complexity across the world. Its overall emission goal, while ambitious for most companies, falls behind the others. It hopes to be carbon neutral by 2030, allowing more room for offsetting emissions rather than reducing them for a net-zero target. It might be a more realistic goal, as Apple has made more reduction progress than others in the past few years. It hopes to slash emissions by 75% across its entire supply chain by 2030 and has invested heavily in carbon removal technologies as well.

Amazon, combining a massive e-commerce logistics business with a huge data business, creates the most pollution of them all, but is making substantial efforts. Amazon plans to power its operations with renewable energy by 2025 and achieve net-zero emissions by 2040. The company has also established a $2 billion fund to invest in start-ups that help companies cut emissions, advancing carbon capture technology and low-emissions fuels. It has created carbon-free facilities and ramped up its electric vehicle fleet. Though Amazon bought more renewable energy than any other company in 2022, its emissions have increased over the past few years. Amazon's progress has been unsatisfactory enough to be kicked out of the Science Based Targets initiative, the leading global organization validating that businesses' carbon reduction goals will meet the goals of the Paris Agreement.

When it comes to climate change solutions, we must celebrate the progress while also acknowledging that it's never fast or significant enough. We can't ignore the role of Big Tech in the climate crisis. The good news is they're starting to see the light and realizing it's in their own interest to make a change. It's not easy, but they're up for the challenge of transitioning swiftly.

The key here is to really grasp their work, hold them responsible, and inspire other companies and industries to do the same. Every CEO knows about the growing environmental risks. We can gauge climate accountability by the level of inaction. Let's challenge the status quo and make a difference!

Keep fighting,

The Scoop Team