Tech companies take steps towards net zero

Digital companies are playing a growing role in the race to eliminate harmful emissions from industry, transport, energy production, and other activities. By purchasing growing shares of renewable energy, investing in carbon removal, and issuing green bonds, the technology firms driving the world’s digital transformation have also come to the forefront in efforts to reduce carbon dioxide (CO2) and other greenhouse gas (GHG) emissions.

A report to be published later this month by the International Telecommunication Union (ITU) and the World Benchmarking Alliance (WBA) documents the emissions and energy use of 150 of the world’s leading tech companies. Beyond assessing corporate climate data and targets, the report – Greening Digital Companies: Monitoring Emissions and Climate Commitments – highlights best practices for digital companies to slash their emissions and achieve carbon-neutral operations.

To mark World Environment Day (5 June) and this year’s #OnlyOneEarth campaign, here are five key takeaways from the report:
1. The 150 digital companies consumed 1.6 per cent of global electricity production in 2020
Operational GHG emissions of the companies accounted for 239 million tonnes in 2020, equivalent to 0.76 per cent of the world total. The overall footprint of digital companies is estimated to be much higher, but it cannot be determined precisely as not all companies calculate their upstream and downstream emissions. The 150 digital companies in the study consumed 425 terawatt-hours of electricity in 2020, accounting for 1.6 per cent of global electricity production.
2. A few companies account for the bulk of digital company emissions
Just 20 companies account for three quarters of the operational emissions, while 9 companies headquartered in East Asia accounted for half of all the emissions of the 150 reviewed in the report. Compared to others, East Asian-headquartered companies use relatively little renewable energy. They have delayed adopting climate-friendly strategies, and will largely not reach carbon neutrality until after 2050 or around two decades later, on average, than companies headquartered in other regions.
3. The purchasing power of digital companies helps scale up renewable energy markets
Digital companies are helping to build viable markets for renewables and accelerate global progress towards carbon neutrality. Seven of the world’s top ten largest corporate purchasers of renewables in 2020 were digital companies, and the digital sector accounted for almost half of the renewables purchased that year. Digital companies are also working with their suppliers to encourage them to use renewables and reduce emissions. But reflecting solar and wind use correctly in power bills can get complicated. Although the companies pay for their renewable electricity, constraints in electrical grids mean it is not always delivered to them. Google is partnering with UN Energy and Sustainable Energy for All to boost the availability of renewables to purchasers over the grid 24 hours a day and seven days a week.
4. Sixteen digital companies report they are already carbon neutral
In all but two cases, firms reporting carbon neutrality are headquartered in Europe or the United States and are offsetting remaining, unavoidable emissions through climate-friendly projects, mainly in low- and middle-income countries. Along with helping to reduce emissions, such projects can achieve positive spill-over effects for sustainable development. Examples include solar and wind farms, reforestation, providing sustainable cookstoves, and pay-as-you-go solar power schemes. Forward-looking firms plan to move beyond carbon neutrality to net zero, where unavoidable emissions in a company’s footprint are removed from the atmosphere. Digital companies are investing over USD 4 billion in carbon removal technologies.
5. Digital products and services are making an impact by enabling wider emission reductions
The products and services of digital companies have become crucial to enable emission reductions in other sectors, including through video conferencing, as well as smart metering for buildings and transport systems. Telecommunications operators report that their services are enabling customers to avoid emissions more than six times what the operators generate in their operations.

Join the report launch webinar on 23 June to discuss key findings and hear from experts across civil society, the private sector, and governments. Register here.