Why tech needs to come clean on climate

“Human innovation has long helped us overcome adversity and now tech has the power to take on one of the greatest challenges we face as a global society. Thanks to this government’s unashamedly pro-tech agenda, the UK is attracting the talent and investment our brilliant tech firms need to grow and use digital innovation to help us achieve net zero.”

This line really encapsulates the approach that worries so many who are working trying to stabilise and mitigate climate change – that governments, and many individuals are hoping that technology can somehow spirit away the threat to humanity without anybody really having to change how they behave in the meantime. Indeed, the term ‘solutionism‘ was coined a few years ago to describe the touching belief that every challenge – big and small – that we face, can be fixed by technology.

To be clear, supporting researchers and entrepreneurs to develop disruptive technologies, including the use of data and artificial intelligence, which have the potential to contribute to the stabilising of climate change is certainly a positive step. Organisations such as Subak are channelling the agility and expertise of certain aspects of the tech sector in this direction.

While technology may provide part of the solution to climate change, right now it’s part of the problem

However, while technology may provide part of the solution to climate change, right now it’s part of the problem. Estimates vary but the ICT sector has been thought to contribute between 1.8 to 2.8 per cent of greenhouse gas (GHG) emissions.

A recent paper published by Lancaster University and the sustainability consultancy Small World Consulting Ltd suggest that emissions are higher than thought and could account for up to 3.9 per cent of GHG emissions. The researchers also believe that contrary to much of the messaging by the industry, emissions are likely to increase without drastic action.

The policy gap

The absence of ambitious and detailed climate policies at a national and international level is contributing to the problem. The Lancaster University paper covers ICT as a whole, whereas our own Tech Impact Campaign has focused primarily on large, established cloud service providers – and it’s not difficult to understand how these cloud data centres are adding to GHG emissions.

Whilst the EU has made a commitment to ‘carbon neutral, energy efficient and sustainable’ data centres by 2030, the emphasis is very much on efficiency, renewable energy and circular economies.

The amount of energy consumed by data centres is likely to grow significantly over the next decade

As the Lancaster paper points out, these factors all have something in common – they don’t actually reduce the rate that the sector is using energy. Indeed, researchers expect the amount of energy data centres consume to grow significantly over the next decade. What the EU policy does is seek to mitigate the effects of rising consumption through tech driven efficiency and the use of renewables.

UK data centres have become a little more efficient over the last few years. In 2013, the UK government put in place a Climate Change Agreement with the data centre sector, which runs until 2023. This means that since 2014, UK based data centres have been delivering energy reductions in return for a carbon tax break.

The target was a 15 per cent reduction in Power Usage Effectiveness (PUE) by the end of 2020, and certainly by the end of 2019 UK data centres overall were ahead of that target. It’s not unwelcome news, but it does raise the question of whether the taxpayer has been subsiding an efficiency target that wasn’t particularly ambitious. There are also questions over whether these efficiencies can continue.

The assumption that data centres will become more efficient as the technologies that power them do so is a perfect example of solutionism. Certainly, AI may well be able to contribute to optimisation of energy use, but Moore’s Law – the assumption that transistors and semi-conductors will continue getting smaller and more powerful and which underpins the expectation of ever greater efficiencies – is slowing. If increasing demand for power is not counterbalanced by corresponding efficiency gains, we’re going to have a problem. In any case, there is also currently no indication that the UK government is devising a replacement programme once the current agreement expires in two years’ time. It will be up to the industry to self-regulate – which means that prospective customers need to be driving the industry to do so.

Onsite or offset?

Climate policies to date are also failing to provide detail on whether renewables have to be generated onsite or whether they can be purchased via offsets. This is a very important distinction – and most of the cloud vendors who have contributed to our Tech Impact series focus heavily on the latter. For many of these vendors, the goal of ‘net zero by 2030’ is now the centrepiece of their ESG profiles. Most can point to detailed ESG reporting, setting out their pledges and (to varying degrees) reporting on their progress towards their deadlines. But how much of this is genuine progress and how much of it is greenwashing?

Some vendors already claim that their data centre operations run at net zero. Computing has already questioned the veracity and transparency of carbon accounting in the market based method of emissions reporting, which uses the purchase of renewables to offset carbon emissions.

Using contractual instruments like Renewable Energy Green Origin Certificates (REGOs) certainly gives the appearance of progression towards net zero. The cloud vendors we have spoken to will happily supply the top line percentage of renewable energy that their data centres consume (typically somewhere between 80 and 100 per cent.) However, this is slightly misleading. What vendors typically don’t do is break it down further, by stating how much of this energy is generated onsite and how much is from green contractual instruments such as REGOs and Power Purchase Agreements (PPAs). ESG reporting is often hazy on this distinction. This is why.

REGOs and PPAs are applied to offsetting calculations so a company can claim to be using 100 per cent renewables. However, REGOs are unbundled from the unit of electricity that came from a renewable source – and the sources of these energy have already been built. When REGO certificates are traded, all that happens is that the same source of green energy is being virtually moved around between different organisations – no additional renewable energy is being generated. Collectively, we haven’t really moved forward.

PPAs are better because they can’t be unbundled – they’re direct contracts between renewable generator and customer. However, they still aren’t a guarantee of renewable energy use because when the renewable source needs topping up, fossil fuels kick in, and organisations may well use REGOs to fill the gap. Vendors would have to overbuy PPAs on a grand scale to guarantee renewable generation 100 per cent of the time.

Finding any details on how vendors source their renewables within the glossy ESG reporting they provide is difficult, if not impossible. If prospective cloud customers are keen to understand exactly how their buying decisions will contribute to the building of additional renewable energy sources, they should ask for a clear breakdown of how much power is generated onsite via the vendor’s own renewable generation, and exactly which instruments they use to make up the shortfall.

Questions should also be asked about the quality of carbon offsetting projects. These vary enormously. ESG reports are full of beautifully photographed reforestation and rewilding projects. Cloud vendors have pledged collectively to plant billions of trees over the next decade. However, if vendors are doing this in order to offset their own activity and include it in their carbon accounting, they need to be able to show prospective customers that the carbon savings would not occur regardless of the project. They also need to be transparent about timescales. If they are to be effective, offsetting projects have to actively remove CO² from the atmosphere which means companies also have to show that these projects are going to last long enough to make that happen.

Scope for more transparency

Prospective cloud customers also need to ask about Scope 3 emissions, which are indirect – that is, emissions originating in the entire value chain. Scope 1 and Scope 2 emissions are narrowly defined, with the former being direct emissions from company assets and the latter indirect emissions from purchased energy. This means that the majority of emissions are categorised as Scope 3. Because of their indirect nature, accurate calculations of Scope 3 emission are challenging – which is probably the main reason that at the time of writing, reporting them is still voluntary. The reporting of Scope 1 and 2 emissions has been compulsory for listed companies since 2013, and since 2019 for all UK incorporated large companies and Limited Liability Partnerships (LLPs).

This poses two challenges for cloud service providers. The first is to accurately quantify and transparently report their own Scope 3 emissions, which every vendor we have talked to for our Tech Impact campaign does. They also have a responsibility – which again, many ESG reports already refer to – to encourage their customers to calculate and report their Scope 3 emissions and provide the tools for them to fold the cloud services they subscribe to into the calculation. Progressively more cloud vendors are doing just this and providing calculators for their customers to help them more accurately quantify their own carbon footprints.

Many in the industry have been calling for parity of reporting on all GHG emissions in order that customers can have transparency when making decisions on cloud services, and the UK government supports these calls. A government spokesperson said:

“It is critical that businesses disclose their emissions so we can deliver on our world-leading climate targets while helping companies maintain a competitive advantage in the UK and globally. That is why we’re leading global efforts to introduce measures increasing corporate transparency, making climate-related financial disclosures mandatory across the economy by 2025, requiring companies to take our net zero commitment into account, and establishing a new UK Green Taxonomy to help clamp down on ‘greenwashing.'”

This government line, the growing number of voices calling for mandatory emissions reporting and of course the upcoming COP26 summit, suggest that it’s only a matter of time before reporting the largest category of emissions ceases to become voluntary. Whether more detailed scrutiny of carbon accounting and offsetting follows it remains to be seen. Nonetheless, it seems clear that self-regulation of what appears to be a deliberately complex area is failing to produce the necessary outcome.

Governments, enterprises and individuals need to stop assuming that technological capacity for efficiency is infinite

In fairness, neither of these issues are exclusive to the technology sector, and the proportion of GHGs the industry produces overall is small. But if technology is to form part of the solution to climate change, as we all hope it will, then the industry itself, governments, enterprises and individuals need to stop assuming that technological capacity for efficiency is infinite. Greenwashing will only stop if individuals and enterprises use their purchasing power to demand greater transparency of carbon offsetting methodologies and of their impact on emissions reporting.

Few individuals or enterprises contend now that the planet has begun to burn. Many more need to call time on accepting the use of smoke and mirrors to obscure the obligation of the technology sector to account for their share of the damage – and fix it.

This article was originally published at Computing. 

Next year Computing will be running the Tech Impact Conference to explore the relationship between technology and the climate – including case studies about the road to net zero, how to go green in your data centre and supply chain, and how to make small changes with a big impact.