Why Microsoft’s and Apple’s 2020 climate target announcements are such a big deal
Earlier this week tech giant Apple announced that it would go carbon-neutral for its products and supply chain by 2030. Already carbon-neutral for its worldwide corporate emissions, Apple effectively doubled down on its climate strategy with low-carbon product design, expanded energy efficiency, renewable energy investment, process and material innovations, and carbon removal.
Of course, Apple’s is just the latest in a recent string of big climate announcements from major tech firms.
Back in January, Microsoft dropped the bombshell that it would go carbon negative by 2030 and by 2050 remove atmospheric carbon equivalent to all of its historical emissions since the company’s founding in 1975. A few months before Microsoft’s landmark reveal, Amazon declared it too would go carbon-neutral by 2040, including buying 100,000 electric delivery vans, followed by an announcement last month that it was establishing a $2 billion climate pledge fund.
Can you smell the winds of change for corporate sustainability?
The standard for corporate sustainability just got raised
It often feels like it was not all that long ago—circa the late 1990s and early 2000s—that corporate sustainability amounted to the idea of ‘do less harm.’ Make some energy-efficiency upgrades to facilities. Start a recycling program and reduce waste. But make no mistake: corporate operations and products still had a climate impact, and sometimes a big one.
Soon enough, renewable energy procurement started to enter the scene as a way to further take a slice out of the corporate emissions pie. Such renewable energy investments originally took the form of buying unbundled energy attribute certificates (EACs), such as renewable energy certificates (RECs) in the U.S. and guarantees of origin (GOs) in the EU.
Critics often denounced EACs as greenwashing, amounting to little more than the medieval Christian practice of buying indulgences to offset the penalties of one’s sins. Yet it was true then and remains true now that EACs are an important, core part of corporate sustainability efforts and renewable energy markets alike. EACs funnel investment to renewable energy developers, while also serving as the crucial ‘proof of purchase’ for corporations and others (such as utilities) buying renewable energy through power purchase agreements (PPAs), whether for regulatory compliance or voluntary sustainability reporting.
Speaking of PPAs… and so we entered the recent era of additionality—the idea that corporate investments in PPAs caused new renewable energy capacity to get built and added to power grids. EACs are still a part of the equation, but now get coupled with electricity sales in various ways (depending on whether we’re talking about direct / physical PPAs or virtual PPAs). This approach has often come part-and-parcel with ambitious corporate renewables targets. For example, to date more than 240 companies have made the commitment to go 100% renewable as part of the RE100, up from 100 companies just three years ago.
Which brings us to present day. As my Energy Web colleagues Doug Miller and Meerim Ruslanova have pointed out, we’ve now entered an even newer era of corporate renewable energy procurement they call ‘proof of impact.’ They compellingly argue that large-scale corporate renewable energy procurement and additionality remain important, but they are relatively blunt instruments in an age when sophisticated corporations are looking for more-granular options and better ways to prove the connection between corporate investments and beneficial emissions impacts.
The recent and impressively ambitious carbon-neutral targets announced from the likes of Amazon, Microsoft, and Apple raise the standard yet again. They’re both a natural extension of ‘proof of impact’ corporate sustainability and a complement to it.
Do no corporate climate harm
Make no mistake: carbon neutrality—and the renewable energy investment it takes to achieve it—on the scale of a Fortune Global 100 corporation is no small thing. Consider Google. As of last year, its renewable energy portfolio totaled nearly 5.5 GW of capacity (equivalent to one million solar rooftops), including a September 2019 announcement of 1.6 GW in what amounted to the world’s largest corporate purchase of renewable energy in history.
Yet carbon neutrality as a term also has an air of Jekyll and Hyde to it. On one hand, it represents the best of corporate sustainability… a target that relatively few have set and even fewer have achieved. On the other hand, it risks hiding corporate climate emissions behind a convenient mathematical equation of pluses and minuses… of negating emissions a company does little to abate with corresponding investments in offsetting emissions-reduction and clean energy projects.
The spirit of carbon neutrality lies in steadily marching corporate climate impact toward zero, not in balancing out a kharmic scale of good and harm toward net neutral.
What we’re seeing now from the Microsofts and Apples of the world is a big step in the right direction. They’re leading with strategies that do no harm in the first place, and then lean on carbon sequestration and other such projects for the last wedge of emissions they’re unable to truly zero out.
If this trend continues—and I hope it does—we may find ourselves talking about zero-carbon corporate sustainability as a fuller realization of today’s carbon-neutral flavor. Maybe, rather than ‘proof of impact,’ corporations will leverage the power of blockchain to start documenting the ‘proof of no impact.”
That’s why Micrsoft’s and Apple’s recent announcements are such a big deal. They re-set the frame of reference for corporate sustainability—from a reduction of impact to not starting with an impact at all.
Blockchain’s role in zero-carbon sustainability
Zero-carbon corporate sustainability will be a phenomenally lofty goal to achieve in practice, and it’ll likely be equally hard to prove. But I’m confident that blockchain can help along the way.
For starters, it can in part enable corporations to achieve zero-carbon sustainability, by helping to wrangle the complexities of multinational supply chains and international operations, such as renewables procurement in emerging markets, as one example.
Consider EW Origin, a suite of blockchain-based software development toolkits being used for digital renewable energy markets by grid operators from Central and Southeast Asia to Europe to Central and South America. It allows corporations to source EACs from (likely new) renewables projects to cover company-specific operations in a region, even if they’re unable to take physical delivery of the electricity (not unlike virtual / remote net metering solar programs, for customers to get clean energy from a project even if they can’t host PV panels on their rooftop). And it also allows companies’ external suppliers from their supply chain to buy EACs equal to their energy consumption to guarantee that products are produced from 100% clean power—where this is all anchored on blockchain to provide non-debatable proof of impact while also maintaining privacy for suppliers.
For another, it can help corporations prove their achievements. In short, bigger claims require better proof. ‘Take my word for it’ isn’t going to be sufficient when the size of the claim is ‘Fortune Global 100 company causes no GHG emissions.’ How can a corporation convince its skeptics—or even its investors—that a fleet of hundreds of thousands of electric vehicles did, in fact, charge on clean energy?
Blockchain is no silver bullet here, to be sure. Corporate sustainability teams are juggling a multi-faceted challenge as audacious as any I’ve seen. But I fully expect that blockchain will become a cornerstone in their toolbox.
