How Industry Growth, Rising Energy Consumption Put Pressure on Global Tech Sector Sustainability Drive
Emma Okonji
A report co-authored by the International Telecommunication Union (ITU) and the World Benchmarking Alliance (WBA), has revealed that energy consumption of the digital technology sector is growing with global demand for hardware, network services, data storage and emerging technologies.
The report explained that Greenhouse gas (GHG) emissions and energy consumption in the global tech sector increased, while transparency and accountability remained a challenge, thus putting pressure on the global tech sector’s digital growth and environmental sustainability drive.
The report tagged ‘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.
Giving details of the report, ITU Secretary-General, Doreen Bogdan-Martin, said: “The report is an important tool for understanding where to focus efforts to maximise 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 upcoming UN Climate Conference in Baku, Azerbaijan for the Green Digital Action meeting at COP29’s landmark Digitalisation Day.”
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, the report said.
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 and the United States, consumed 51 per cent of this total, which is nine per cent higher than in 2021.
The report provides the first comprehensive overview of corporate value-chain emissions. Often referred to as ‘Scope 3’, they 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, the report added.
Analysing the report, the Director of Research and Digitisation at the World Benchmarking Alliance, Lourdes O. Montenegro, said: “Digital companies need to do their part in the fight against climate change. The 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.”
Director of the ITU’s Telecommunication Development Bureau, Cosmas Luckyson Zavazava, said: “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. 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.”
According to the report, the rapid growth of Artificial Intelligence (AI) technologies will further strain energy resources and keep adding to emissions.
The report however noted the contributions that AI and other transformative technologies could 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.
