|Customers line up at The Apple Store during the phase 4 reopening in Manhattan in July 2020. In its just-released sustainability report for 2020, the tech giant said using low-carbon materials and processes is the next step in reducing the footprint of all of its products worldwide.
Source: Star Max photo
Big tech companies have a mixed record when it comes to disclosing their carbon footprints, but there are recent indications the industry is taking note of investor demands for greater transparency.
In July, social media giant Facebook Inc. published its first-ever sustainability report touting progress toward the goal of reducing its greenhouse gas emissions by 75% and powering its global operations with 100% renewable energy by the end of 2020.
"As we look into the future, increasing our reporting on supply chain emissions is something we are looking at," a Facebook spokeswoman said in an email.
The report marks a change for Facebook, which has historically achieved low ratios when it comes to environmental disclosures, according to data from Trucost. Trucost is a part of S&P Global Market Intelligence that measures how transparent U.S. companies are being about their operational environmental and climate change-related risks through the lens of weighted disclosure ratios. It gave Facebook a weighted environmental disclosure ratio of 11% for 2018, the most recent year available.
For details on Trucost's disclosure ratio methodology, see the informational box below.
This is one of four stories that review how transparent U.S. companies are being about their operational environmental and climate change-related risks through the lens of Trucost's weighted disclosure ratios for 2018, the most recent year available. The other stories examine how key companies in the energy, consumer and food industries stack up against their peers.
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Facebook is not alone in its recent push for greater transparency. In July, Apple Inc. published its 2020 environmental progress report pledging to become carbon neutral across the entire business, product life cycle and manufacturing supply chain by 2030. The company said it is already carbon neutral for its corporate emissions, including corporate travel.
"But we're going further to cover our entire, end-to-end footprint," the report said. Apple received a Trucost weighted environmental disclosure ratio of 9.6% for 2018.
Anthony Toppi, senior manager of the company network at sustainability nonprofit Ceres who has worked closely with Apple on its various sustainability efforts, applauded the tech company's latest environmental commitments, noting such initiative will be crucial for the entire industry to maintain strong governance practices.
"From the investor perspective, this is communicating, 'We at Apple know our risks, we've put in the work to figure out the best ways to manage them and here's how we're going to do that,'" Toppi said in an interview.
Prioritizing climate change is also crucial for companies to keep their reputations intact, said Andrew Behar, CEO of As You Sow, a shareholder advocacy group that works with large tech companies on climate change and content management.
"It's also really important I think for their brand, for the brand of all these companies to be associated with that," he said.
Netflix narrows gap
The tech industry still has a ways to go when it comes to transparency around carbon footprints. Trucost gave streaming service Netflix Inc. a weighted environmental disclosure ratio of 0% for 2018.
Netflix did not respond to a request seeking additional comment about Trucost's ratio calculation methodology or the company's latest environmental transparency efforts. But the company has taken steps to increase its disclosure on environmental, social and governance issues.
In 2019, Netflix released an ESG report using the framework laid out by the Sustainability Accounting Standards Board, a nonprofit organization that created widely recognized industry-specific disclosure standards across ESG topics relevant to different industries. In the report, Netflix noted that 100% of its estimated direct and indirect nonrenewable power use in 2019 was matched with renewable energy certificates and carbon offsets. The company also noted it supports renewable energy projects in 20 countries and 15 U.S. states.
"We're working to understand and minimize our environmental impact," the report stated.
Amazon, Alphabet take action
On the other end of the spectrum, e-commerce giant Amazon.com Inc. earned a 72% weighted environmental disclosure ratio for 2018. Google LLC's parent company Alphabet Inc. achieved a ratio of 98.2% for the same period.
Alphabet, which did not respond to a request for comment, in an April blog post said it has been carbon neutral since 2007, and 2019 marked the third year in a row the company matched its energy usage with 100% renewable energy purchases. The company said it is now working to source carbon-free energy on a 24-7 basis at all data center locations.
"Addressing the challenge of climate change demands a transformation in how the world produces and uses energy," the Alphabet report stated.
The tech industry is built on innovation, noted Toppi from nonprofit Ceres; the challenge going forward is using that innovative edge to tackle climate change.
"How can they take what they've had to date in terms of incredible products that have changed the world and make them as sustainable as possible?" he asked.