GENEVA (AN) — Growth among digital companies to keep pace with demand for hardware, network services, and data storage is raising carbon footprints and undercuting progress on climate goals, a new report finds.
Artificial intelligence’s rapid advancement also is driving more energy consumption and greenhouse emissions for digital companies, adding to human-caused climate change, while the companies' transparency and accountability remain a challenge, the International Telecommunication Union and World Benchmarking Alliance reported on Monday.
ITU Secretary-General Doreen Bogdan-Martin described the report as a tool that technology companies can use to cut more carbon emissions and improve their climate reporting. “An effective green transition needs digital companies to drive progress and lead by example,” she said.
Digital technologies can help accelerate progress on the U.N. 17 Sustainable Development Goals for 2030, but they also add to energy and water consumption, e-waste and depletion of raw materials.
The report shows 148 of 200 digital companies covered in the report consumed 518 terawatt-hours of electricity in 2022, or 1.9% of the world total. The ten biggest electricity users, all headquartered in Asia or the United States, consumed 51% of this total, or 9% more than a year earlier.
More broadly, the report shows that companies could have a huge climate impact if they cleaned up their indirect or "Scope 3" emissions that come from the "upstream and downstream" activities of its value chain.
These include raw material suppliers, outsourced device makers, and consumer uses of products like computers and mobile phones.
"Given that Scope 3 emissions are, on average, over six times greater than Scope 1 and 2 emissions combined, there is significant potential for carbon reduction in this area," the report says. "It also highlights the importance for the 125 companies which do not disclose a full Scope 3 emission inventory to track and monitor these emissions."
More transparency and accountability needed
This year's report measured companies' compliance with global climate goals under the 2015 Paris Agreement by only accepting emissions reduction targets that were submitted and validated to the Science Based Target initiative, or SBTi, a collaboration between the CDP, the U.N. Global Compact, World Resources Institute and WWF International.
Only 70 companies achieved a passing grade of 50% or more; the median score was just 36% and 27 companies scored zero. Just 26 companies scored 75% or higher, while three companies, Apple, Logitech and Telefonica, scored over 90%.
Cosmas Zavazava, director of the ITU’s telecommunication development bureau, said governments can help technology companies more closely monitor their own greenhouse gas emissions and act to reduce emissions and energy use.
Some of the ways that governments can help, according to Zavazava, are by liberalizing energy markets, reducing red tape for permitting, modernizing power grids, and investing in energy storage.
“GHG impacts can be devastating and include extreme and changing weather patterns and rising sea levels," he said. "Governments can support the tech industry’s efforts to balance innovation with sustainability, fostering a twin transition towards digital growth and environmental responsibility.”
But many companies aren't accurately calculating and attributing their Scope 3 emissions, the report says, due to lack of data from suppliers, double counting, and inconsistent application of emission-allocation principles. The rapid growth of AI technologies will further strain energy resources and keep adding to emissions.
“Digital companies need to do their part in the fight against climate change,” said Lourdes Montenegro, WBA's director of research and digitization. “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.”
Earlier this year, the International Energy Agency's forecast for global energy use over the next two years included first-time projections for electricity consumption from AI, cryptocurrency, and data centers. Taken together, the electricity consumption was almost 2% of global energy demand in 2022 and forecast to double by 2026.
Data centres are significant drivers of growth in electricity demand in many regions. After globally consuming an estimated 460 terawatt-hours in 2022, data centers' total electricity consumption could reach more than 1,000 TWh in 2026," it said. "
This demand is roughly equivalent to the electricity consumption of Japan. Updated regulations and technological improvements, including on efficiency, will be crucial to moderate the surge in energy consumption from data centres."
