Source: The International Telecommunication Union
Cutting value-chain emissions could be key to reducing carbon footprints to net zero, ITU-WBA report shows.
Geneva, 30 September 2024 – The carbon footprint of the digital technology sector is growing to keep pace with global demand for hardware, network services, data storage and emerging technologies, according to a report co-authored by the International Telecommunication Union (ITU) and the World Benchmarking Alliance (WBA).
Alongside commitments expressed across industry to embrace both digital growth and environmental sustainability, the report reveals an overall decline in progress towards climate goals. Greenhouse gas (GHG) emissions and energy consumption in the global tech sector have increased, while transparency and accountability remain a challenge.
Greening Digital Companies 2024 offers insights and best practices to help tech companies worldwide accelerate their emissions reductions, achieve low-carbon operations, and improve climate reporting.
“An effective green transition needs digital companies to drive progress and lead by example,” said ITU Secretary-General Doreen Bogdan-Martin. “This report is an important tool for understanding where to focus efforts to maximize digital technology’s immense potential to advance sustainability in the face of climate change for the digital future we want. The report’s findings formulate a clear call for action for leaders gathering at the Green Digital Action meeting at COP29’s landmark Digitalisation Day.”
Balancing benefits and costs
Digital technologies offer numerous socio-economic benefits and can accelerate progress on the UN’s Sustainable Development Goals (SDGs).
Tech can enhance weather predictions and climate-change monitoring, optimize energy use, and help integrate low-emission technologies.
But to advance sustainable development, industry must monitor and address its own environmental challenges, including carbon emissions, energy and water consumption, e-waste, and raw-material depletion.
Greening Digital Companies 2024 evaluates the greenhouse gas emissions and energy use of 200 leading digital companies around the world.
Of the 200 companies covered in the report, 148 reported electricity consumption totaling 518 terawatt-hours (TWh) in 2022, about 1.9 per cent of the world total. The 10 companies with the highest consumption levels – all headquartered in East Asia or the United States – consumed 51 per cent of this total, 9 per cent higher than in 2021.
Assessing the corporate value chain
The report’s 2024 edition provides the first comprehensive overview of corporate value-chain emissions. Often referred to as “Scope 3,” these make up most of the emission footprints of digital companies.
Scope 3 emissions include everything from material suppliers and outsourced device production to the use of a company’s end-products by consumers. Such end-products range from cell phones and computers to search engines and AI chatbots.
On average, these emissions are six times greater than the combined Scope 1 and Scope 2 emissions that a company produces itself or is responsible for indirectly, according to the report.
Many companies struggle to accurately calculate and attribute their Scope 3 emissions, with common challenges including lack of data from suppliers, double counting, and inconsistent application of emission-allocation principles.
“Digital companies need to do their part in the fight against climate change,” said Lourdes O. Montenegro, Director of Research and Digitisation at the World Benchmarking Alliance. “This report uniquely offers evidence-based insights on the sector’s state of play. We are bringing these data and insights to the attention of the international community to help ensure that the impact on people and planet is consequential to success in business.”
Managing emissions from emerging technologies
The rapid growth of artificial intelligence (AI) technologies will further strain energy resources and keep adding to emissions, the report makes clear.
The report also notes the contributions that AI and other transformative technologies can make to support sustainable development.
To help digital companies meet sustainability goals, Greening Digital Companies 2024 underscores the role of governments in implementing monitoring frameworks and accelerating the availability of green energy.
“From the development point of view, it is increasingly important for industry players to more closely monitor their own greenhouse gas emissions and act to reduce emissions and energy use,” said Cosmas Zavazava, Director of the ITU’s Telecommunication Development Bureau.
“GHG impacts can be devastating and include extreme and changing weather patterns and rising sea levels. If left unchecked, climate change will undo part of the development progress of the past. Governments can support the tech industry’s efforts to balance innovation with sustainability, fostering a twin transition towards digital growth and environmental responsibility.”
Liberalizing energy markets, reducing red tape for permitting, modernizing power grids, and investing in energy storage are all ways that governments can support industry sustainability efforts. Renewable energy investment is also critical.
Research and analysis to support green digital action
Greening Digital Companies 2024 reflects ITU’s wider push for effective climate action across the global tech industry.
ITU, the UN Agency for Digital Technologies, urges the industry to take responsibility for its own emissions; helps develop and promote technical standards to cut emissions in line with global climate goals; and encourages industry partners worldwide to support ITU’s Green Digital Action, aiming to strengthen the contribution of digital technologies to climate and environmental action.
Notes:
Advance interviews under the embargo are available.
The full report is available for media preview at https://bit.ly/4gAdZYI
The report will be launched Monday 30 September during the ITU-WBA webinar: “Greening Digital Companies 2024: Monitoring emissions and climate commitments,” taking place in two sessions to accommodate different world regions:
Session One: 9:00 – 10:15 CEST / Session Two: 18:00 – 19:15 CEST
To register: http://www.itu.int/go/gdc-24
The upcoming UN Climate Conference in Baku, Azerbaijan (COP29) will host the first Digitalisation Day at a COP, shining a spotlight on the growing opportunities and challenges posed by increasing digitalisation. This will include the inaugural high-level meeting on digitalisation at a COP.
Resources and background information:
- Virtual launch event of the Greening Digital Companies 2024 report, 30 September 2024
- Greening Digital Companies 2024: Monitoring Emissions and Climate Commitments
- Greening Digital Companies 2023: Monitoring Emissions and Climate Commitments
- Greening Digital Companies 2022: Monitoring Emissions and Climate Commitments.
International Telecommunication Union (ITU)
About ITU
The International Telecommunication Union (ITU) is the United Nations specialized agency for information and communication technologies (ICTs), driving innovation in ICTs together with 194 Member States and a membership of over 1,000 companies, universities, and international and regional organizations. Established in 1865, it is the intergovernmental body responsible for coordinating the shared global use of the radio spectrum, promoting international cooperation in assigning satellite orbits, improving communication infrastructure in the developing world, and establishing the worldwide standards that foster seamless interconnection of a vast range of communications systems. From broadband networks to cutting-edge wireless technologies, aeronautical and maritime navigation, radio astronomy, oceanographic and satellite-based earth monitoring as well as converging fixed-mobile phone, Internet and broadcasting technologies, ITU is committed to connecting the world.
Learn more: http://www.itu.int
About WBA
The World Benchmarking Alliance (WBA) is a non-profit organization that assesses and ranks the performance of the world’s most influential companies on the United Nations Sustainable Development Goals. Data in this report were collected as part of the WBA Digital Inclusion Benchmark, which assesses the world’s leading technology companies on their performance in enhancing access to digital technologies, improving digital skills, fostering trustworthy use, and innovating openly, inclusively and ethically. In addition, WBA produces the Climate and Energy Benchmark, which measures corporate progress against the Paris Agreement and covers 450 of the world’s most influential companies in high-emitting sectors such as the automotive, utilities, oil, gas and transport industries.
Learn more: https://www.worldbenchmarkingalliance.org/
Appendices
Greening Digital Companies 2024 report: a focus on Scope 3 emissions
The Greening Digital Companies 2024 report provides the first comprehensive overview of corporate supply chain, or Scope 3, emissions, which are roughly six times Scope 1 and 2 emissions combined.
Scope 3 emissions are indirect emissions from a company’s upstream and downstream activities, such as outsourced suppliers in information and communication technologies (ICTs) manufacturing and emissions from the use of products like computers and smartphones.
By definition, Scope 3 emissions are outside the company’s direct control. But firms can exert important influence through their choice of suppliers, on the one hand, and the energy efficiency of their products and services, on the other.
Scope 3 reporting, however, is beset by a lack of data from suppliers and transparency. A total of 75 of the 200 companies provide relevant data across all 15 categories, ranging from purchased goods/services, upstream transportation and distribution, waste generated in operations, to business travel, use of sold products, and downstream leased assets. But most fall short in their reporting.
“Despite an abundance of guidance, the majority of digital companies do not calculate a full Scope 3 emissions inventory,” said the report. “This makes it impossible to assess progress in reducing emissions across their value chain.
While 103 digital companies covered in this report have submitted an emissions reduction target to SBTi, only 73, just over one-third, have a Scope 3 target.
By the numbers:
ASSESSMENT: DISCLOSURE, TARGETS, PERFORMANCE
• The Greening Digital Companies report assesses companies on their data disclosure, targets and performance.
• Only three of 200 digital companies scored 90% or higher (Apple, Logitech, Telefonica).
• 26 companies scored 75% or higher (see figure below), up four from the assessment in the 2023 edition of the report.
• Only 70 companies had at least a “passing grade” of 50%, and 27 scored zero.
• The top 26 performers are all headquartered in Europe or the US
SCOPE 1 & 2: OPERATIONAL EMISSIONS
● 166 companies reported emissions totaling 293 million tCO2e in 2022, amounting to 0.8% of global emissions from energy use and 12% more than in 2021.
● Top 10 emitting companies – all in the US or East Asia – accounted for 55%of the total, with all but one reporting increased operational emissions in 2022.
● The Science Based Target initiative (SBTi) has not validated the emissions reduction target of any top ten emitters as aligned with the Paris Agreement 1.5°C target.
ELECTRICITY & RENEWABLE ENERGY
● 2022 electricity consumption for the 148 companies providing data topped 500 terawatt-hours (TWh), 1.9% of the global total.
● The top ten – all headquartered in East Asia and the US – consumed 51% of the total, 9% more than in 2021.
● The top four corporate purchasers of renewable energy globally in 2022 were digital companies: Amazon, Meta, Alphabet and Microsoft (see figure below).
● Sixteen companies reported sourcing 100% renewable electricity (see figure below). Four of which – Alphabet, Amazon, Microsoft and Deutsche Telekom – highlight that despite purchasing renewable electricity, it is not always available where their data centres are located or the electricity grid was not always supplying them.
● Four top ten companies consuming electricity in 2022– Alphabet, Amazon, Microsoft and Deutsche Telekom – purchased 100% renewable energy, but it has not always been available where needed.
● Samsung and TSMC have committed to 100% renewable electricity, but not before 2050 and 2040 respectively.
● None of the three Chinese telecom operators in the top ten electricity consumers have made commitments towards 100% renewable electricity.
TARGETS VALIDATED BY THE SCIENCE BASED TARGETS INITIATIVE (SBTi)
● 104 (out of 200) digital companies have submitted Scope 1 & 2 emissions reduction targets to the SBTi, of which 69 have been validated.
● Of the 69 validated targets: 45 companies are on track, 13 are not on track, and 11 have seen emissions rise.
● Validated targets account for 19% of the 200 companies’ total emissions (56 million tCO2e).
● 81% of the 294 million tCO2e of total operational emissions are not covered by an SBTi target.
SCOPE 3: CORPORATE VALUE CHAIN EMISSIONS
● Among companies that report all relevant Scope 3 emissions, Scope 1 accounts for 4%, Scope 2 for 15% and Scope 3 for 81%. Scope 3 emissions are on average 6 times greater than Scope 1 and 2 combined (see figure below).
● Only 75 of 200 companies provided a complete Scope 3 inventory despite it accounting for most digital company emissions.
AI & DATA CENTERS
• Generating responses to Chatbot queries (“inference”) accounts for up to 90% of total machine learning cloud computing costs according to research by Amazon Web Services.
• A ChatGPT inquiry needs almost ten times as much electricity to process as a standard web search.
• Data centers consumed about 460 TWh of electricity in 2022, a figure which is projected to increase 35% to 100% by 2026. At the upper end of this range, this demand is roughly equivalent to the electricity consumption in Japan.
• Large cloud providers are experiencing rapid growth in energy use and consequent emissions. Alphabet, Amazon and Microsoft operational GHG emissions are up 62% from 2020 reaching 47 million metric tons in 2023 (see figure below). Electricity use has grown even faster, up 78% over the same period and standing at just over 100 TWh in 2023, around what the entire country of the Philippines uses in a year. The trio have made huge investments to decarbonize their operations: they all procure 100% renewable electricity and they were three of the top four corporate purchasers of green energy in 2022.
• Given the uncertainty surrounding the climate impacts of AI, it will be important for energy usage and GHG emissions to be included as key metrics when evaluating AI models.
ADDITIONAL NUMBERS
● The number of global Internet users has doubled since 2010, and data traffic has expanded 25-fold
● E-waste increased 82% from 2010 to 2022, and on current trends will reach 82 million metric tonnes by 2030, equivalent to nearly 8 kg of e-waste per person every year according to the Global E-waste Monitor 2024.
The International Telecommunication Union: http://www.itu.int
World Benchmarking Alliance: worldbenchmarkingalliance.org