Revealed: Tech's oil-stained savings accounts

Way back in March, we highlighted a recipe for tech climate plan success. One idea got left on the cutting-room floor: ensuring a company’s investments aren’t financing more fossil fuel extraction. We cut it mainly because it was hard to pin down how much carbon pollution was tied to Big Tech’s bank accounts.

But that has changed, thanks to a new report that shows for the first time how major tech companies are inadvertently fueling the climate crisis. A trio of NGOs — CSLN, TOPO and BankFWD, if you’re the acronym type — crunched the numbers, which show that companies like Salesforce, Microsoft, Google and others are doing more to damage the climate through investments than any gains their climate plans can make. The good news? There are ways to fix it.

Tech companies are sitting on boatloads of dirty cash. Success is a lovely thing, and tech companies — the current stock market correction excepted — have experienced lots of it. Companies have taken their billions in profits and plunged them into everything from investment accounts to sovereign debt. That’s a nice way to generate some more cash! There’s just one tiny problem.

• Banks and governments have been throwing fossil fuels a lifeline for years. Since the Paris Agreement was inked in 2015, 60 large multinational banks have financed the fossil fuel industry to the tune of an astounding $4.6 trillion.
• The new report from the NGOs, titled “The Carbon Bankroll,” is the first-ever attempt to calculate how much of that is tied to tech company’s holdings, and what the associated carbon emissions add up to. The answer: a lot.
• The authors examined major companies’ consolidated financial statements and parts of their 10-K forms to glean how much cash and investments they had. Then they combined those numbers with the average carbon intensity per $1 billion in various investments. Voila: You have a rough — and, according to the report, conservative — estimate of how much carbon pollution Big Tech’s money is responsible for. (Side note: The Securities and Exchange Commission should read this report.)

The carbon footprint of tech’s bank accounts dwarfs its climate plans. Companies that don’t sell tons of products or have heavy cloud computing infrastructure but hold lots of cash, such as PayPal and Disney, have what the report calls a high “uplift” in carbon emissions.

• In PayPal’s case, it’s financing 5,512% more carbon pollution than its reported carbon emissions. Disney sits at 169%.
• Cash-rich companies such as Apple, Google and Microsoft have smaller percentages of uplift — though Google’s uplift is still 111% of its emissions — but are financing way more pollution in absolute terms.
• Apple, for example, has about $190 billion in cash and investments, which finances nearly 15 million tons of carbon pollution. The report notes that’s triple the amount of carbon dioxide emitted from the use of every Apple product on Earth in 2021.
• All this goes to show that any climate plan worth its salt also has to look beyond the usual Scope 1, 2 and 3 emissions and toward what company’s money is financing.
• A Google spokesperson said the company would look at the report’s methodology in more detail and that it welcomed other financial experts to do the same. An Apple spokesperson noted that the company is divesting from fossil fuels and investing in renewable energy, including issuing $4.7 billion in green bonds. PayPal, Disney and Microsoft did not respond to requests for comment.

You hate to see it — but there is some good news. “Strange as this sounds: as a climate activist, I think this research is great news because it provides an opportunity to finally transform the dirty banking sector,” Todd Paglia, the executive director of Stand.earth, said in an email. That’s because the information here is actionable, and tech companies have in the past shown a willingness to, well, try to act. (Just look at all those climate pledges.)

• The report lays out 10 steps companies can take to ensure their investments aren’t being shoveled to fossil fuel companies. Among them are accounting for indirect carbon emissions tied to their investments.
• Beyond that, companies can work together to crank up the pressure on banks. On their own, tech companies are powerful. Together, they could exact real change in the banking system.
• The report suggests the tech industry move money to lower-emitting banks en masse, implementing a “freezer box” program that ranks banks for their climate bona fides. The bottom two banks would get zero dollars from tech companies until they improve their practices, bumping two more to the bottom. Consider it relegation from the Premier League, but higher stakes. (No shade to the race between Burnley, Leeds and Everton!)

If you don’t think tech companies are paying attention, consider this quote from Patrick Flynn, Salesforce’s SVP and global head of Sustainability, which was included in the report: “[W]e welcome this new analysis from CSLN, TOPO, and BankFWD so companies like Salesforce can deepen collaboration with banking sector leaders to accelerate their climate ambition and drive meaningful change at scale.” That’s all but begging users, employees and others to hold it and other companies to ever greater climate ambitions.

— Brian Kahn (email | twitter)

The next Big Tech climate challenge: Business travel

While tech companies sure have a lot of headway to make on their investments, there’s another area where they can get to work right now. Business flights are frying the planet, and tech companies are increasingly trying to eschew frequent flying to meet their climate goals. But it’s not as easy as it seems. (And it frankly doesn’t seem that easy!)

Air travel is a huge climate problem. The aviation industry accounts for about 2.4% of all carbon pollution. That would make it the sixth-biggest source of carbon dioxide on Earth if it were a country. However, those emissions are not equally distributed. Just 1% of all travelers are responsible for 50% of all carbon dioxide emitted. And business travelers are a huge chunk of that 1% pie.

Some tech companies are trying to help employees — and regular people — make smarter choices. Air travel has become an important part of some companies’ climate plans.

• Salesforce has tied some executive compensation to reducing air travel emissions. How that is done, however, is up to individual business units, according to Max Scher, the company’s senior director of Sustainability.
• The company helps employees choose lower-emissions flights using Net Zero Cloud, its own greenhouse gas emissions inventory analytics platform.
• The tool goes even further, providing employees with information on lower-carbon alternatives like taking the train when feasible. (Train travel is also arguably the most comfortable mode of transit.)
• For corporate travelers who don’t have Salesforce’s proprietary software, a new crop of tools has popped up in the last year to help travelers compare the carbon emissions of different flight itineraries before booking travel. Google Flights, Skyscanner, Kayak and Lite Flights all recently released filtering tools showing flights’ climate impact.

Are people using those tools though? That remains to be seen. Salesforce hasn’t gathered data yet to see how often employees are choosing the least carbon-intensive mode of business travel. Still, Sola Zheng, a researcher on the International Council on Clean Transportation’s aviation program team, posited that when employees are charging travel to a corporate card and not their own, they’re likely going to be willing to spend more for a less climate-damaging flight.

A longer version of this story appeared on Protocol.com. Read it here.

A MESSAGE FROM SAP

Did you know that 97% of the greenest companies in the world run SAP? Join SAP for its flagship Sapphire event virtually – it’s free! Learn how to transform your business, and how to approach the balancing act between supporting sustainability and driving efficiency and revenue goals for your company.

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A tweet to make you think

There’s something incredibly poignant about a delivery bot in the woods, wandering like some first-generation Wall-E. Or maybe it’s like the killer robodogs in “Black Mirror,” which is decidedly less poignant. Either way, this tweet spoke to me for many reasons.

Conspicuous consumption is the main driver of the climate and extinction crises currently playing out around the globe. To keep pace with current consumption habits, we need an estimated 1.7 Earths. Given that there’s no spare Earth-like planets laying around (Sorry, Elon: Mars doesn’t count.), it seems like maybe we should address that sooner rather than later. Yet technology has made it easier than ever to consume more.

Delivery robots have become an increasingly common sight in the U.K. The one in the photo appears to be made by the firm Starship, and the West Northamptonshire government said the bots, rolled out earlier this year, can deliver items from a range of 2,000 different products. There are lots of benefits to this, of course: helping those who may be homebound have access to fresh food and reducing unnecessary car trips to the grocery store are chief among them. But it also speaks to how shopping is increasingly frictionless, and that that is increasingly putting pressure on the climate. Maybe this delivery bot just wanted to enjoy a little slice of the natural world before it disappears.

— Brian Kahn

Hot links

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A MESSAGE FROM SAP

Did you know that 97% of the greenest companies in the world run SAP? Join SAP for its flagship Sapphire event virtually – it’s free! Learn how to transform your business, and how to approach the balancing act between supporting sustainability and driving efficiency and revenue goals for your company.

Learn more