Why tech giants’ money is a hidden source of greenhouse gas emissions
Even tech companies that have promised to reduce their greenhouse gas emissions have a big climate blind spot, according to a new report published by three environmental groups. With their money and investments, Google, Apple, Meta and other tech giants are indirectly funding fossil fuel companies.
Although these companies may have taken steps to reduce pollution within their own operations and supply chains, the financial institutions they bank with continue to funnel Big Tech’s profits in heavily polluting industries. The emissions associated with this financial activity are so significant that they actually far exceed the emissions from each company’s operations, according to the report.
This pollution has gone unnoticed because it is not usually included in company emissions assessments. But if the emissions associated with the liquidities of Google, Meta, Microsoft and Salesforce have been taken into account, this would increase their carbon footprint by 91 to 112%, according to the report.
The problem comes from how banks decide to use their customers’ funds. When businesses entrust their cash to banks, the banks put that money to work. The money could be used to fund energy projects or provide loans to other businesses. The world’s 60 largest commercial and investment banks have collectively invested $4.6 trillion in the fossil fuel industry since 2015, according to the report.
These types of investments lead to an increase in pollution that warms the planet. Every billion dollars in cash a bank puts to work is responsible for pollution comparable to the annual emissions of 27,398 vehicles, the report says. This figure is based on a year 2021 report which estimates that the carbon intensity of the US financial sector is roughly equivalent to 126,000 metric tons of carbon dioxide per billion dollars. These emissions can come from projects and companies funded by the financial sector, which can include things like utilities, mining exploration, or even real estate and IT projects.
The report, for the first time, estimates the financial carbon footprints of nine different technology and media companies: Google, Meta, Amazon, Apple, Microsoft, Salesforce, PayPal, Disney and Netflix. The researchers obtained information about each company’s liquidity and investments from filings with the SEC. The report’s authors then compared this to established measures of carbon intensity for different types of investments to estimate each company’s financial footprint.
Apple reported $191 billion in cash and investments to the SEC in 2021. The report estimates that those billions generated nearly 15 million metric tons of global warming emissions. That figure represents three times more climate pollution than the emissions generated from the use of every Apple product worldwide that year, the report said.
By 2030, Apple plans to reduce its own carbon dioxide emissions by 75%. On its way to this goal, the company has pushed hundreds of its suppliers to reduce their own pollution. Companies like Apple that want to have a positive impact on climate change should consider applying the same pressure to banks, say the report’s authors.
The report was compiled by the international Climate Safe Lending Network, think tank The Outdoor Policy Outfit and BankFWD, founded by the Rockefeller family. The groups brought in financial data experts from the social enterprise South Pole, which advises companies on their sustainability goals.
“The power of this report is that its data tells us that the leverage we use the least turns out to be the most powerful tool we have – where and how we choose to bank,” said Valerie Rockefeller. , co-president of BankFWD, in a Press release. “Choosing the bank is a largely untapped frontier for climate leadership with enormous potential for impact.”
Google, Netflix and Microsoft declined to comment. The edge on the file. The other companies did not provide a response at press time.
To see how each company’s financial carbon footprint stacks up, see the full report.