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How Tech Industry Leaders Are Navigating Carbon Reduction Goals
Tech companies have ambitious plans to cut emissions
In a new survey conducted by Endeavor Business Intelligence on behalf of NextEra Energy Resources, nearly nine in 10 tech leaders surveyed said their organization has set a corporate goal to reduce its carbon emissions. However, the explosion of artificial intelligence, cloud computing and digitization has led to massive growth for tech companies — and their energy use. That growth makes tech’s path to complete the clean energy transition harder to achieve.
Learn the biggest challenges tech companies face to continue progress toward emissions-reduction goals and how leaders are working to solve them.
“Growth in commercial demand for electricity is concentrated in a handful of states experiencing rapid development of large-scale computing facilities such as data centers. Data center developments are evolving rapidly, and we plan to re-evaluate our upcoming forecasts as we receive more information.”
U.S. Energy Information Administration
Emissions reduction industry progress report
Motivations
Organizational alignment
Progress to date
Outlook
Motivations
By far, tech leaders say corporate goals are their top motivator to eliminate or reduce carbon emissions. Four in 10 named it the number one motivator, while 56% said it was a top three motivation.
What are your organization’s TOP 3 motivations to eliminate or reduce its carbon emissions?
Corporate emission reduction goals
Desire to achieve more sustainable operations
Federal or state government mandates/goals
Government or regulatory pressure
New profit or line of business opportunities
All sources of energy, including clean energy, needed to meet our growing demand
Customer pressure
Federal or state government funding/incentives
Market demand for low-carbon or zero-carbon products
Investor pressure
We are not motivated to reduce emissions
Base: All respondents (n=208).
Motivations
Organizational alignment
Progress to date
Outlook
Organizational alignment
Nearly nine in 10 survey respondents strongly or somewhat agreed that their organization is aligned across the business to achieve its goals, and 85% agreed that it’s important to consider those goals when making project decisions.
How strongly do you agree or disagree with the following statements?
My organization is aligned across businesses and functions to achieve emissions-reduction goals.
It is important to consider emissions-reduction goals when making project decisions at my organization.
My organization applies a “cost” to greenhouse gas emissions in its decision-making and analysis (e.g., an internal carbon tax).
Base: All respondents (n=208).
Motivations
Organizational alignment
Progress to date
Outlook
Progress to date
Looking at actual emissions-reduction progress, 65% of survey respondents said their organizations have cut emissions by at least 11% from baseline. Impressively, 5% said their company has already achieved net-zero emissions, and 7% said emissions are down more than 50% from baseline.
Which of the following best describes your organization’s overall progress toward reaching its GHG emissions-reduction goal?
Emissions are the same or higher relative to the baseline used for our emissions-reuction goal
Emissions are down 1% to 10% from our baseline
Emissions are down 11% to 25% from our baseline
Emissions are down 26% to 50% from our baseline
Emissions are down more than 50% from our baseline
My organization has achieved net-zero emissions
I don’t know
Base: Respondents who have a decarbonization plan or will announce a plan (n=205).
Motivations
Organizational alignment
Progress to date
Outlook
Outlook
Given the rapidly growing energy demand from many in the tech industry, emissions from increased use of electricity will increase. Clean energy supplies are critical to the industry’s emissions reduction efforts. 53% of leaders said at least half of their organization’s energy use comes from zero-carbon energy sources. More than three-quarters of leaders said their organization is on track or ahead of its goal for zero-carbon energy use.
What percentage of energy use by comes from zero-carbon operations energy sources?
0% to 25%
26% to 50%
51% to 75%
76% to 100%
I don’t know
How would you describe the percentage of energy use from zero-carbon energy sources at your organization?
Behind our goal for zero-carbon energy use
On track with our goal for zero-carbon energy use
Ahead of our goal for zero-carbon energy use
Base: All respondents (n=206).
Tech industry emissions-reduction challenges
Energy demand
As tech leaders make progress toward emissions-reduction goals, they face technical, operational and stakeholder-related challenges. Not surprisingly, given the need for new data centers, the most commonly identified hurdle (39%) was that their organization’s energy demand will continue to rise, causing emissions to rise unless the demand is met by clean energy supplies.
Energy
supply
The other side of the rising energy demand coin is that tech companies are finding there aren’t enough clean energy supplies to meet demand. More than a quarter of leaders reported struggling to secure adequate energy supply of any type in the South Atlantic U.S., with other top areas of struggle including the Southeast (23%), California (21%) and the Mid-Atlantic (21%).
Renewable energy development
38% of tech leaders said it was too complex to develop on-site renewable distributed energy resources (DERs) and microgrids, and 35% said clean energy supplies were not well-matched with the location of their operations. At least 30% also said the cost of clean electricity or developing renewable DERs was too high.
Tech’s top tactics to reduce emissions
According to surveyed leaders, tech organizations are driving toward emissions-reduction goals with an all-of-the-above approach. Tech leaders say their companies use or are evaluating the following measures:
Software and analytics to optimize energy needs, usage and trading
Energy and energy efficiency consulting
Contracts for a clean energy grid power option
On-site battery energy storage systems
Traditional energy efficiency implementations
Renewable energy credits or carbon offsets
Electrify a greater portion of operations
PPAs or VPPS for clean energy
On-site renewable DERs (e.g., solar)
How economic are clean energy supply alternatives?
Contracts for zero-carbon electricity
Contracts for zero-carbon electricity
54% of tech leaders surveyed say contracts for zero-carbon electricity are usually economic.
Developing on-site renewable DERs
Developing on-site renewable DERs
47% of tech leaders surveyed say developing on-site renewable DERs, such as solar or battery energy storage, is usually economic.
Developing on-site fossil generation
Developing on-site fossil generation
42% of tech leaders surveyed say developing on-site fossil generation is usually economic.
One interpretation of the tech industry’s approach of trying and evaluating every means possible to continue reducing emissions is that it demonstrates companies have yet to hone in on the optimal set of effective methods that will keep moving the needle forward. Assessing and implementing those potential solutions requires expertise that is often out of the wheelhouse of tech organizations. That could be why 82% of leaders said their company currently has or is evaluating a large-scale relationship with a clean-energy provider across multiple locations.
Additional Resources
The Grid’s Struggle to Meet Tech’s Surging Electricity Demand
Electric utilities are sounding alarms that they’re struggling to keep up with the tech industry’s demand for power. Tech companies are in fierce competition for scarce locations to interconnect new facilities to the grid.
View BlogOpens in a new window.Tech Companies Set Ambitious Carbon Reduction Goals: How Industry Leaders Are Navigating the Journey
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View White PaperOpens in a new window.Planning a strategic energy transition looks different for every company
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