Greening Digital Companies 2024: Report on challenges to tech sector sustainability

Geneva, 30 September 2024

​​​​​The carbon footprint and energy consumption of the digital technology sector is growing with global demand for hardware, network services, data storage and emerging technologies, according to a report co-authored by the International Telecommunication Union (ITU) and the World Benchmarking Alliance (WBA).

Alongside commitments expressed across industry to embrace both digital growth and environmental sustainability, the report reveals an overall decline in progress towards climate goals. Greenhouse gas (GHG) emissions and energy consumption in the global tech sector have increased, while transparency and accountability remain a challenge.

Greening Digital Companies 2024 offers insights and best practices to help tech companies worldwide accelerate their emissions reductions, achieve low-carbon operations, and improve climate reporting.

“An effective green transition needs digital companies to drive progress and lead by example,” said ITU Secretary-General Doreen Bogdan-Martin. “This report is an important tool for understanding where to focus efforts to maximize digital technology’s immense potential to advance sustainability in the face of climate change for the digital future we want. The report’s findings formulate a clear call for action for leaders gathering at the Green Digital Action meeting at COP29’s landmark Digitalisation Day.”

Balanxcing benefits and costs

Digital technologies offer numerous socio-economic benefits and can accelerate progress on the UN’s Sustainable Development Goals (SDGs).

Tech can enhance weather predictions and climate-change monitoring, optimize energy use, and help integrate low-emission technologies.

But to advance sustainable development, industry must monitor and address its own environmental challenges, including carbon emissions, energy and water consumption, e-waste, and raw-material depletion.

Greening Digital Companies 2024 evaluates the greenhouse gas emissions and energy use of 200 leading digital companies around the world.

Of the 200 companies covered in the report, 148 reported electricity consumption totaling 518 terawatt-hours (TWh) in 2022, about 1.9 per cent of the world total. The 10 companies with the highest consumption levels – all headquartered in East Asia or the United States – consumed 51 per cent of this total, 9 per cent higher than in 2021.

Assessing the corporate value chain

The report’s 2024 edition provides the first comprehensive overview of corporate value-chain emissions. Often referred to as “Scope 3,” these make up most of the emission footprints of digital companies.

Scope 3 emissions include everything from material suppliers and outsourced device production to the use of a company’s end-products by consumers. Such end-products range from cell phones and computers to search engines and AI chatbots.

On average, these emissions are six times greater than the combined Scope 1 and Scope 2 emissions that a company produces itself or is responsible for indirectly, according to the report.

Many companies struggle to accurately calculate and attribute their Scope 3 emissions, with common challenges including lack of data from suppliers, double counting, and inconsistent application of emission-allocation principles.

“Digital companies need to do their part in the fight against climate change,” said Lourdes O. Montenegro, Director of Research and Digitisation at the World Benchmarking Alliance. “This report uniquely offers evidence-based insights on the sector’s state of play. We are bringing these data and insights to the attention of the international community to help ensure that the impact on people and planet is consequential to success in business.”

Managing emissions from emerging technologies

The rapid growth of artificial intelligence (AI) technologies will further strain energy resources and keep adding to emissions, the report makes clear.

The report also notes the contributions that AI and other transformative technologies can make to support sustainable development.

To help digital companies meet sustainability goals, Greening Digital Companies 2024 underscores the role of governments in implementing monitoring frameworks and accelerating the availability of green energy.

“From the development point of view, it is increasingly important for industry players to more closely monitor their own greenhouse gas emissions and act to reduce emissions and energy use,” said Cosmas Luckyson Zavazava, Director of the ITU’s Telecommunication Development Bureau. “GHG impacts can be devastating and include extreme and changing weather patterns and rising sea levels. If left unchecked, climate change will undo part of the development progress of the past. Governments can support the tech industry’s efforts to balance innovation with sustainability, fostering a twin transition towards digital growth and environmental responsibility.”

Liberalizing energy markets, reducing red tape for permitting, modernizing power grids, and investing in energy storage are all ways that governments can support industry sustainability efforts. Renewable energy investment is also critical.

Research and analysis to support green digital action

Greening Digital Companies 2024 reflects ITU’s wider push for effective climate action across the global tech industry.

ITU, the UN Agency for Digital Technologies, urges the industry to take responsibility for its own emissions; helps develop and promote technical standards to cut emissions in line with global climate goals; and encourages industry partners worldwide to support ITU’s Green Digital Action, aiming to strengthen the contribution of digital technologies to climate and environmental action.

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