Big tech firms say they are turning green but can they deliver?

Tech hasn’t always had a great image when it comes to climate and eco responsibility. If it’s not data centres sucking up power from the grid, it’s the environmental impact of global ecommerce, raising emissions as packages are shipped all over the world. Or the mining activity for rare earth minerals scarring the earth, and the growing pile of electronic waste as a testimony to our insatiable appetite for new electronics.

But things are starting to shift. Major companies such as Apple, Microsoft, Amazon and Google are backing initiatives that will cut their environmental impact, making an effort to be seen as environmentally conscious and responsible. Apple plans to be carbon neutral through a series of green energy and recycling initiatives by 2030. That's the same year Microsoft has targeted to become carbon negative. Amazon, like other tech giants, is turning to green energy to power its data centres, while Google has pledged to use only carbon neutral energy sources by 2030. Amazon owner Jeff Bezos has pledged $10 billion to fight climate change.

Driving this push for sustainability is the growth in awareness at a consumer and investor level about the impact we are having on our environment. It’s not only good for corporate consciences; it’s good for business too.

Karen O'Regan. managing director at Accenture, said research by the company has shown 65 per cent of consumers are asking and demanding greater responsibility from companies for driving sustainable action in the future.

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“Smart companies are the ones who put their consumers at the centre and if you are listening to consumers, that is what you are going to be doing,” she said.

However, while companies have been recognising they have responsibilities with regards to sustainability, Covid may have threatened to derail some of the progress made as companies cut costs and scaled back spending in response to the tough business environment.

“The pandemic hasn’t dampened in any way the importance of sustainability, particularly for consumers, investors and employers,” said O’Regan.

“Particularly at the very beginning [of the pandemic], there was a priority on cost protection and on what companies were doing to get through the next few months. The question was around new investments they were going to make in the area of sustainability and were they going to be able to afford those.

“I think as we moved through the pandemic, what became obvious from a lot of the research was that consumer sentiment didn’t change. And if anything, it proved consumers were making an increased link between sustainability and the pandemic, and resilience going forward.”

So despite the pandemic, the trend for technology to shift towards a greener and more environmentally responsible future is continuing. In March, 24 chief executives of major companies operating in Europe signed a declaration to take action in a number of areas, including to invest in the development and deployment of greener digital technologies and services that are energy and material efficient and to join with NGOs to develop tools to measure the net impact of green digital technologies on the environment

Among the signatories were Microsoft, escooter company Bolt, IBM, Ericsson, Nokia and SAP. The companies also pledged to become carbon neutral by 2040. Microsoft has said that by 2030 it will be taking more carbon out of the air than it emits.

Delivering on those promises will be crucial. Companies are very conscious of being accused of “green washing”, which is designed to make people believe that companies are doing more than they actually are. It gives a thin veneer of eco responsibility, with little substance to back it up.

“Investors have got much smarter in knowing how to measure ESG [environmental, social and corporate governance]. There are lots of ways in which sustainability and the claims you make in the market can be measured,” said O’Regan. “Companies are becoming very fearful of greenwashing. We’ve seen a number of organisations called out for that approach. If you go down that route, you can damage your brand very significantly.”

The fear of potential backlash and brand damage has held some companies back from engaging in sustainability at all. "They're afraid of being tarnished with the greenwashing label," said Dr Cara Augustenbourg, environmental policy fellow at University College Dublin.

“Where I’ve seen success is where there is full transparency across the business’s supply chain; where they recognise there are impacts across the supply chain, from the products they use to build their widget all the way to the retailers they transport the widgets to. And they publish the lifecycle analysis of those impacts in a fully transparent way, and admit imperfection.”

Stripe Climate

Payments company Stripe launched Stripe Climate in 2020, a way for businesses to easily invest in technologies that support climate action, by diverting a fraction of their revenue towards initiatives that permanently remove carbon dioxide from the atmosphere.

Initially available to US businesses, it launched the product globally with a beta in January before opening it up more widely in February.

For Stripe, the project was an easy climate win. Businesses running on the platform can back projects with a few clicks. All funds contributed through Stripe Climate will go to the development of carbon removal technologies, with Stripe forgoing any transaction fees on the contributions.

"We tried to make it as easy as possible for businesses. It's literally two or three clicks," said Ryan Orbuch, who leads the project at Stripe . " For Stripe, the interest in climate responsibility wasn't a new thing. The company originally had been looking into a corporate offset programme, but became more interested in the idea of removing the carbon from the atmosphere altogether. In 2019, it committed to spending $1 million a year to support carbon capture technologies.

“The hypothesis was that there was a really significant gap in demand for permanent removal as a whole,” said Orbuch. “There are some scientists and entrepreneurs working on solutions that could capture CO2 out of the air and permanently store it in a variety of different methods. But those solutions, we hypothesised, were slow to scale, and there were less people working on them than there should be because there’s no demand. No one ever said ‘we’ll come out, we’ll pay you what it costs to run your carbon capture machine, to run your new solution and help it scale up’.”

Orbuch believes carbon capture will play a key role in fighting climate change.

“If we want to keep to something like a 1.5-2 degree warming target we’re going to need to do dramatic emissions reductions across sectors, energy, industry, transportation and so on. But we’re at a point now where additionally we need to do significant carbon removal,” he said.

“There are some solutions today that can cover some portion of the problem. But the world does not have the portfolio of solutions that are going to be needed to actually solve this at reasonable cost.”

Stripe’s Climate fund is attempting to stimulate the demand needed to make these solutions scale up and become cheaper. It has so far chosen four companies in which to invest its money, but it plans to expand that further. In March, it opened a new round of applications, the results of which are imminent, and expects to add more each year.

Among the current crop is CarbonCure, which reduces the carbon impact and water footprint of concrete production; Climeworks, which is developing a carbon removal plant in Iceland; Project Vesta, which is boosting investments in research; and Charm Industrial, which has developed a bio-oil sequestration process.

“We’re really trying to take a portfolio approach with this,” said Orbuch.

For Dr Augustenbourg, the climate situation is now urgent and getting people to recognise that is key.

“Before Covid, companies weren’t generally doing enough to meet the Paris climate target of 1.5 degrees. That ambition now has to be ramped up even more, and everybody has to do their fair share to meet that target. That means radical emissions reductions and change in business practices to align with the Paris Agreement and the circular economy.”

The problem is that the target is steep. To have even a 66 per cent chance of staying below the 1.5 degree limit we have to reduce emissions by 50 per cent between now and 2030.

“That’s the bare minimum, that everyone is trying to halve their emissions by 2030 and move to net zero by 2050,” she said.

“The definition of sustainability is that it is to allow future generations to avail of the same resources we have today, so it’s living within the limits to growth, to conserve those natural resources. If we could limit our consumption to the level that those resources are available in 100 years time for future generations, then officially we’re being sustainable even though we are making an impact.”