Major Technology Companies’ Sustainability Targets
By Ally Friedman
The technology sector has expanded dramatically over the past few decades. It captures countless categories (retail, software, telecom, etc.), generates trillions of dollars in revenue, creates millions of jobs worldwide and has significant presence in most countries. This research explores the environmental impacts of the technology industry and analyzes what the world’s top technology companies are doing to counter these impacts.
The rationale behind this research and visual display was to shed light on the nature of sustainability targets adopted by the world’s top 10 technology companies. What I found is that while most technology companies are concentrated on similar sustainability issue areas – namely, waste, water, and energy – there are no common metrics to easily compare them side by side. With the exception of Microsoft, most seem to be focusing their efforts on a handful of issues at a time. Technology companies need to be taking a more holistic approach in order to outpace the climate impacts of this rapidly growing industry.
Getting Clear on the Definition of a Target
While wading through companies’ sustainability reports, data, and websites, I found I needed a common definition of “target” to distinguish commitments that could be quantified and analytically compared across companies. I therefore adopted the broad definition of a target as an internal effort that is in some way measurable and/or timebound. This definition allowed me to narrow down the amount of initiatives I was analyzing and also to create a bar for more tangible commitments.
I found that virtually all of the companies had many commitments and “visions” of a more nebulous nature that did not meet my definition of a target. This in itself was an interesting finding, because it says something about the companies that simply have a high number of targets. Samsung, Microsoft, Hitachi, and Dell had the most targets under my definition. All four companies also stood out for creating specific timelines and deadline-driven sustainability efforts.
Waste, Energy, Water
All 10 companies have at least one target related to waste. Many of these targets are related to “waste to landfill” reduction efforts, and several companies also set specific targets related to recycling, e-waste, and sustainable packaging. For example, Dell set a target to recover 2 billion pounds of used electronics by 2020. Alphabet Inc. has a goal that by 2022, 100% of Made by Google products will include recycled materials.
Nearly every company has both a renewable energy and an energy efficiency target. All have at least one or the other. Apple is a clear leader here, having already converted 100% of its operations to clean energy. Foxconn, as one of Apple’s suppliers, has committed to manufacture all Apple products with 100% clean energy, but doesn’t yet have a company-wide renewables target. Amazon also has a 100% clean energy target, set for 2030, and Microsoft has charted a pathway to 100% beginning with reaching 70% by 2023. Alphabet Inc. set a goal to triple their purchases of renewable energy from 1.1 GW to 3.4 GW by 2025.
On the energy efficiency side, there are a wide range of approaches. Many companies set broad energy consumption reduction targets, either as a percentage of total operations or per unit. Foxconn, for example, is aiming to achieve a 22% reduction in energy consumption, equivalent to 1,723 million kWh, by 2020 against the base year of 2015. Others were more specific about efficiency gains; IBM committed to certify at least two-thirds of eligible new server products to the U.S. Environmental Protection Agency’s (EPA) ENERGY STAR program criteria, and Microsoft has a dedicated Energy Smart Buildings program in place to identify building efficiency savings.
Water conservation targets emerged as a more unexpected standout. The technology sector is not known for being especially water-intensive, relative to industries like agriculture or textiles. Nonetheless, every company except one had a goal to reduce water consumption across their operations. It seemed like most were able to quantify and report on their water resources with some precision. Some went a step further than setting a water reduction target. Dell, for example, requires a five-year responsible water risk mitigation plan from their top 250 supplier facilities in water-stressed regions or with water-intensive processes. Foxconn runs a water recycling project, through which they were able to reclaim 3.77 million tons of water in 2018.
Companies also adopted dozens of sustainability targets beyond waste, energy and water, although most other categories had targets from only a handful of companies. For example, only four companies had targets related to transportation. Of all ten companies, only Alphabet Inc. mentioned reducing food loss and waste as part of its sustainability strategy, and its goal was not concrete enough to be included as a target. Though perhaps not core to their products (with the exception of Amazon) transportation and food waste are universal sustainability challenges that any major multinational company would arguably contend with.
Leadership
Microsoft – even before they announced their goal to become carbon negative by 2030 – was a sustainability leader. Microsoft was the only company besides Dell to check all the “big picture” target-setting boxes, and unlike Dell they scored an “A” in climate change from the Carbon Disclosure Project (CDP). Microsoft also stood out for its unusual and innovative targets, which range from implementing an internal carbon price to completing a global travel analysis to identify “travel hot spots” where the company can transition from carbon-intensive business travel to remote meetings.
Aside from Microsoft, most companies are leaders in one area but laggards in another. Certain companies are pace-setters in terms of transparency, rigor, or within different categories of sustainability. For example, Apple has achieved its 100% renewable energy target, but has yet to set an overall greenhouse gas emissions reduction goal. Hitachi is not yet aiming for carbon neutrality like some of its peers but is running several unique sustainability efforts focused on air quality, carbon pricing, and engaging their employees.
My Approach
My focus on the world’s 10 largest technology companies by revenue allowed me to see a geographic spread of companies and dive deep on industry leaders. Drawing from the most recent version of each companies’ corporate social responsibility report and external sustainability resources, I quickly discovered just how challenging it would be to compare the environmental impacts of these 10 companies, let alone the whole sector.
All 10 companies report environmental data to varying degrees and with different metrics. For example, most companies recorded some measure of total electricity consumption, but how they break down their energy footprint differs. Foxconn quantified the total carbon emissions from its manufacturing activities, while Alphabet, Inc. identified the annual power usage effectiveness for all of its data centers. Not only does the type of sustainability data vary from company to company, but so does the way they talk about their sustainability commitments.
Because of this variation, I decided to use sustainability targets themselves as a measure of which environmental impacts technology companies are prioritizing. I zoomed in on the issues that companies are setting sustainability targets around to see which categories tended to be more popular. Despite some overlap, the categories that emerged as most common, separate, and distinct were: waste, renewable energy, water conservation, energy efficiency, supply chains, transport, forest resources, employee incentives, carbon pricing, and air quality.
I also wanted to use some external benchmarks to gage the level of rigor and transparency within these companies’ sustainability strategies. For this, I choose 4 determinants: whether companies set a big-picture greenhouse gas emissions reduction goal, aligned their targets with the sustainable development goals, reported to the Carbon Disclosure Project (CDP), or set a target with the Science-Based Targets Initiative.
Why Does this Matter?
On the whole, the visualization provides a more complete picture of the sustainability efforts big technology companies are undertaking. It is evident that the priorities within each companies’ sustainability strategy, like transparency, ambition, and quantifiable impact, vary significantly. It is worth pressing further to understand the reasons for this variation. Though initially I was inclined to directly compare which companies are doing “better” than others, the resulting research has started to color in a more nuanced reality.
It is evident that most companies are not looking holistically at their sustainability efforts, instead setting piecemeal targets. Companies may need to integrate environmental perspectives into every link of their supply chains in order to maximize impact. The wide array of approaches and focus areas across the 10 industry leaders reveals that the technology sector does not yet have a common understanding of what the most urgent or high-impact sustainability strategies are. Identifying and collaborating on the highest priorities would be a good place for these 10 companies to start.
Acknowledgements: This research was conducted as part of Ally Friedman’s Master of Arts in Law & Diplomacy at the Fletcher School. Special thanks to Miquel Munoz Cabre and the graphic design team at World Resources Institute. She can be reached at: https://www.linkedin.com/in/ally-friedman-b9320399/