Cloud, Climate, Comms: Is Big Tech feeling the heat? 

COP29 may have drawn to a close, but a spotlight remains firmly pointed on the climate impact of the technology sector.  

In 2006 mathematician Clive Humby declared that “data is the new oil”, a statement that came to signify the value and, at that time, untapped economic potential of raw data. Two decades on, however, Humby’s insight has perhaps taken on new meaning.  

With power-hungry data centres working to fuel the AI boom being just one of the challenges tech is facing, the sector kept a largely low profile at this year’s COP climate change conference, with concerns raised by the industry that it was being targeted as the “new oil and gas”. 

COP29: Digitalisation takes the stage 

While this year’s COP was primarily focused on solving the climate finance problem, it has also arguably been a wake-up call for the technology sector.  

As part of the conference this year, the COP29 Presidency launched the inaugural Digitalisation Day. The aim was to embed digital technology as a “transformational tool” in climate action, according to COP29 President Mukhtar Babayev. 

There is no doubt therefore, that the technology sector is being called upon and recognised for its role in accelerating global sustainability.  From artificial intelligence optimising smart grids and renewable energy distribution, to technologies that track and mitigate emissions, to new weather monitoring and earth observation technologies that are providing new climate intelligence and early warnings for extreme weather events, technological innovation will undoubtedly be key to addressing the climate crisis.    

However, the other side of the coin is the sector’s increasing energy demands and potential associated emissions.  

Current estimates show that the technology sector is contributing to approximately 4% of global CO2 emissions, but that this could reach 14% by 2040.  

Big energy users under the microscope 

The technology industry, alongside traditional energy giants, is therefore feeling the heat.  

Major cloud providers and other tech companies rely on colossal data centres, which are significant energy consumers. The International Energy Agency stated that data centres already accounted for 1% to 1.5% of global electricity consumption in 2022 – and that was before the launch of ChatGPT. 

Last month, Google announced it had ordered seven small modular nuclear reactors (SMRs) from Kairos Power, with a total capacity of 500 megawatts, as a medium-term solution to fuelling its energy-hungry data centres. 

This comes at a time when tech titans are cracking down on carbon emissions and publicly announcing ambitious climate goals along with it. Microsoft wants to be “carbon negative” by 2030, and remove the amount of carbon the company has emitted during its lifespan by 2050. Meta has similar goals, aiming to achieve net-zero emissions by 2030. 

The pressure on big energy users and key players like Amazon, Google, and Microsoft is growing, and they are facing tough questions about their greenhouse emissions, particularly with the unprecedented growth of AI technology. 

Even before COP29, this was beginning to have reputational, and commercial, implications for tech businesses – including growing scepticism regarding their status as prospective ESG investments.   

Communicating Climate Initiatives 

Amid these pressures, effective communication is critical. The technology industry is already in deep water from a media perspective.  

To paraphrase the words of the COO of one of the tech groups represented at COP29, if the industry ends up getting the “same treatment” as oil and gas, there’s going to need to be a concerted PR campaign to counter the narrative.   

Tech companies (not just Big Tech) who seek to lead the market and take a public position on sustainability and climate change will need to ensure that claims, goals and ambitions stand up to scrutiny – right across the supply chain. With the growing demands of AI technology, these climate goals are now being jeopardised in some instances. 

Technology companies advocating for AI development and its role in combatting climate change, for instance, could find themselves at risk of greenwashing accusations – with both e-waste and energy use potentially undermining sustainability efforts.  

Regulation and reputation 

With this in mind, regulators such as the Advertising Standards Authority and Competition Markets Authority are cracking down on greenwashing (more regularly associated with FMCG, financial services and travel) in the tech space. 

Regulators will be wary of scaring companies into greenhushing, which could lead to a backwards step away from open, effective climate communications, but at the same time will treat potentially misleading environmental claims by firms with short shrift.  

There is no doubt the technology sector is playing and will play a pivotal role in advancing decarbonisation, by driving innovation and enabling more sustainable practices across industries. Technology companies providing carbon accounting services, for example, help organisations track and reduce emissions using advanced software, AI, and data analytics.  

The inaugural Digitalisation Day at COP29 urged for the use of digital tools to reduce greenhouse gas emissions, strengthen climate resilience, and advance sustainable development. 

However, with growing media and public awareness of the rising energy consumption of new technologies, businesses in the sector have a new reputational risk to consider in their market positioning and communications.