Is Big Tech using financial metrics and emission-based metrics to evade accountability?
Now that the COP26 has concluded, all eyes are on the climate action that follows. Other than governments, companies are also a key player in the fight against climate change. There are a few notable developments in the corporate world, particularly in the Big Tech space that seeks to take forth the climate agenda.
In a welcome development, the global climate narrative is witnessing more acceptability from diverse stakeholders across the economic spectrum. Even digital economy players, including Big Tech, have announced climate-linked goals and targets in an attempt to contribute to a sustainable future for the planet. Amazon has announced 2040 as the year it achieves a net-zero emissions and by 2025, it aims to power its operations completely by renewable energy. Facebook and Apple are eyeing 2030 as the year for net-zero emissions in their entire value chain. Microsoft, too, has pledged to be carbon-negative by 2030 and to have removed all emissions it has ever emitted by 2050. Google also joined this “race to net-zero” by announcing ambitious plans to power its operations 100 percent by renewable, without using renewable certificates for offsetting any fossil-generated power. Even domestically in India, companies like Amazon India, Zomato, and Swiggy have announced targets for adopting electric vehicles in their delivery fleets to mitigate carbon emissions significantly.
If climate justice is the yardstick, every action on the sustainability front should go beyond merely mitigating the carbon emissions to actually addressing the adverse socio-economic and ecological impacts of their operations, especially on vulnerable communities.
While it seems that such deep-pocketed technology companies are aggressively pursuing climate-friendly policies and targets, a deeper examination of these developments reveal an insightful picture. This is even more crucial when such actions are measured on account of climate justice—the core element of the fight against climate change. If climate justice is the yardstick, every action on the sustainability front should go beyond merely mitigating the carbon emissions to actually addressing the adverse socio-economic and ecological impacts of their operations, especially on vulnerable communities. And it is not an easy task to gauge such impacts holistically because of the qualitative nature of such impacts which affect the lives and livelihoods of people.
However, it has become a norm to quantify socio-economic impact through financial metrics, and ecological impact through emission-based metrics. This has almost reached a point where it is becoming propaganda to shadow the importance of people’s quality of life by covering it up with some percentages or numbers. For instance, as per emission calculations, Big Tech only contributes to 0.3 percent of global GHG emissions including Scope I emissions through data centres and operations, Scope II emissions through electricity and other inputs, and Scope III emissions through deliveries, employee travels, and logistics. However, it becomes problematic when such low percentages are used as a tool to suggest that they are doing more than enough to combat climate change. This is because while they are emitting miniscule proportions of emissions, the socio-economic impact of such emissions is widespread and are actually adversely affecting the lives and livelihoods of people living in precarious conditions. The small proportions cannot be used as a tool to detach such businesses from their social responsibilities. For instance, in 2019, Microsoft alone accounted for 392,557 metric tonnes of GHG emissions only through its business travels. The impact of such emissions is geographically and demographically widespread affecting communities where mining of fuels, production, processing, transportation, and other activities in the value-chain are present. Similarly, the emissions are warming the Earth’s surface resulting in ecological imbalance, which is affecting environmentally vulnerable communities by enhancing the frequency and intensity of disasters like floods, droughts, and others.
As per emission calculations, Big Tech only contributes to 0.3 percent of global GHG emissions including Scope I emissions through data centres and operations, Scope II emissions through electricity and other inputs, and Scope III emissions through deliveries, employee travels, and logistics.
Another critical attribute of the climate actions of technology companies is the methods deployed to actualise the targets and announcements of emission-reduction, net-zero, and offsets. Offsets are scientifically detrimental as they would be simply increasing emissions on one hand by offsetting them somewhere else while scientists have sternly warned us about peaking emissions by 2030. Additionally, the quality of offset is also questionable as several reports point out how trees were planted in locations that were never at the risk of climate change and therefore, no climate benefits would entail from an afforestation drive in that particular location. Similarly, to actualise targets, such technology companies are adopting a value-chain approach to mitigate the emissions in their entire value chain. While this is a welcome step, however, there exists plausible deniability while including or excluding the buyers, sellers, and even consumers of various products in the definition of value chain, especially the micro, small, and medium enterprises linked with the technology company. Thus, a credible and independent monitoring framework is indispensable to achieving the intended objectives of climate justice.
Furthermore, it has also come to light that, on many occasions, Big Tech firms have been aggressively involved in lobbying activities to influence regulatory regimes or public policies and perceptions. This exposes the public policy space to become susceptible to manipulation by such Big Tech players, which dilutes the credibility of climate-conscious announcements and actions on the part of such firms. For instance, in the United States (US), it was reported that of the total US $65 million, which were poured into lobbying by Big Tech in 2020–21, only 6 percent was towards climate action. This, when compared to the political capital deployed by oil and gas companies against positive climate action, presents a disappointing reality. This also puts public policy and perception at a risk of being misinformed by the glamourous climate announcements of such firms, which are actually making no effort to push forth a positive discourse on climate action. A robust oversight mechanism and transparent governance framework is required to ensure that backdoor lobbying to influence regulations, policies, or public perception is kept in check.
The quality of offset is also questionable as several reports point out how trees were planted in locations that were never at the risk of climate change and therefore, no climate benefits would entail from an afforestation drive in that particular location.
Thus, pertinent questions that need to be asked are: Can such tech companies compel manufacturers of their devices and products to reduce factory emissions and switch to cleaner energy? And can they reuse and recycle the materials inside their devices? To what extent would smaller manufacturers, who work on a contractual basis, be able to adopt cleaner technologies at a price parity which is not particularly conducive for their profit margins?
Thus, the way forward is holding climate justice as a sacrosanct benchmark to measure the actions of technology companies, including the Big Tech firms. The first step in this regard would be to change the dominant metrics of measuring climate action by corporates from mere emission standards or investments ploughed into climate-friendly activities. The actual benchmarks should include qualitative standards around welfare of the communities, especially those which are the worst affected by a company’s operations, and how climate mitigation or adaptation efforts are actually enhancing the well-being of such vulnerable groups. This is only possible when processes like community engagement, social dialogue, vulnerability mapping, and systems thinking are institutionalised in the climate-conscious efforts of technology companies.
Secondly, the value chain of Big Tech is notoriously opaque and one doesn’t actually have a complete picture of Big Tech’s carbon footprint, partly because the way their supply chains are set up makes it difficult for researchers to make an accurate estimate. Thus, to effectively tackle carbon emissions through Big Tech, the first step is to calculate a holistic and transparent estimate of its actual carbon footprint, its sources, and impacts.
The first step in this regard would be to change the dominant metrics of measuring climate action by corporates from mere emission standards or investments ploughed into climate-friendly activities.
Thirdly, other than direct and indirect emissions, there is a need to also push digital technology players to actively enable better technology adoption in other sectors that can aid in making those sectors more sustainable. There are low-hanging fruits in electricity, transportation, and various hard-to-abate sectors where technology solutions could result in better monitoring and, therefore, optimising the carbon footprint of such sectors.
Finally, it is only an assumption that Big Tech and other consumer-facing technology companies, which derive their economic profits from consumers, people’s attention, and community’s purchasing power actually invest in addressing the life-threatening impacts of climate change that are fuelled by their own operations. Thus, a whole-of-systems approach, which covers the entire value-chain of operations and accounts for power dynamics within them, is the right strategic approach to institutionalise climate actions in the digital economy. This needs to be coupled with adopting climate justice as the dominant metric of adjudging any company’s efforts towards climate change. It’s high time that climate change and the ways to address it become more about people on the ground instead of being high-level abstract statistics around emissions or investments.
The views expressed above belong to the author(s).
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Sarthak Shukla is an Independent public policy consultant working on issues around sustainability, inclusive economy and resilience
Set up in 1990, ORF seeks to lead and aid policy thinking towards building a strong and prosperous India in a fair and equitable world. It helps discover and inform India’s choices, and carries Indian voices and ideas to forums shaping global debates. ORF provides non-partisan, independent analyses and inputs on matters of security, strategy, economy, development, energy, resources and global governance to diverse decision-makers (governments, business communities, academia, civil society). ORF’s mandate is to conduct in-depth research, provide inclusive platforms and invest in tomorrow’s thought leaders today.
Is Big Tech using financial metrics and emission-based metrics to evade accountability?