How Companies Are Working To Reduce The Size of Their Carbon Footprint
“Scientific evidence for warming of the climate system is unequivocal.” ~ Intergovernmental Panel on Climate Change
The Earth’s natural greenhouse continues to change. Over the years, the concentration of greenhouse gases (GHG) in the atmosphere has increased, resulting in catastrophic changes in the climate. July 2019 was the warmest month in recorded history for the globe. The GHG emissions are traced in the form of a carbon footprint, which is the total amount of GHG generated by human activities.
Here’s a look at how these GHG emissions are at the country level and how are corporates are committing to lower their carbon footprint.
At the country level, China is the largest contributor to CO2 emissions with 28% (10.06GT) followed by the U.S. at 15% (5.41GT), India at 7% (2.65GT), and Russia at 5% (1.71GT). However, in terms of per capita emissions, Saudi Arabia is the largest emitter with 18.48T of per capital emissions, followed by Kazakhstan, Australia, the U.S., Canada, and South Korea at 17.6T, 16.92T, 16.56T, 15.32T, and 12.89T, respectively.
According to the U.S. Energy Information Administration, the burning of fossil fuels was responsible for 76% of U.S. greenhouse gas emissions. Fossil fuels were the source of about 75% of total U.S. anthropogenic greenhouse gas emissions in 2018.
One landmark environmental accord towards cutting emissions was the Paris Agreement signed by nearly every nation to address climate change and its negative impacts. The deal aims to substantially reduce global greenhouse gas emissions and includes commitments from all major emitting countries to cut their climate-altering pollution. As climate change and sustainability take center stage, many companies have set emission reduction targets for the next five, ten, twenty, and thirty years.
For the last ten years, Microsoft (MSFT) has made significant investments to reduce its historic carbon footprint. In January 2020, they announced their goal to be carbon negative by 2030, and ultimately remove its carbon footprint (has emitted either directly or by electrical consumption) since it was founded in 1975 by 2050.
BMW has been making efforts to reduce CO2 emissions and ensure sustainability over the years. The company has recently set new targets for the phase up to 2030. It includes the first-ever CO2 goals for full lifecycle up to 2030 and lowering of carbon emissions from production and sites by 80% per vehicle.
In July 2020, Apple (AAPL) unveiled its plan to become carbon neutral across its entire business, which will ensure that every Apple device sold by 2030 will have a net zero climate impact. Apple has set a target to reduce emissions by 75% by 2030 while developing innovative carbon removal solutions for the remaining 25% of its footprint.
In June, Cisco (CSCO) signed its first long-term wind energy power purchase agreement (PPA) as a part of its overall strategy to move towards renewable energy. Cisco is aiming at a 85% renewable energy target by 2022 along with a 60% GHG reduction.
IBM (IBM) has managed a 39.7% reduction in operational CO2 emissions since 2005. This puts IBM well ahead of schedule in reaching its current goal of a 40% reduction in CO2 emissions by 2025. The company plans to source 55% of its electricity from renewables by 2025.
Adobe (ADBE) set a goal to run its sites and deliver its products with 100% renewable energy by 2035, without the use of carbon offsets or unbundled renewable energy credits.
Amazon (AMZN) set a goal to reach net zero carbon across its ecosystem by 2040. During 2019, Amazon witnessed a 22% increase in net sales while its total carbon footprint increased by 15%. While the e-commerce giant has been making investments in solar energy and electric vehicles, it has further committed $2 billion in June 2020 under its Climate Pledge Fund to invest in companies, which will facilitate the transition to a low-carbon economy.
Back in 2017, Google (GOOG, GOOGL) became the first company of its size to match its entire annual electricity consumption with renewable energy. Today, Google is the largest corporate buyer of renewable energy in the world.
Disney (DIS) aims to reduce its net emissions by 50% by 2020 compared to a 2012 baseline. Disney recently bought a new solar facility, which will generate enough power to operate two theme parks in Orlando. It will equate to reducing annual GHG emissions by more than 52,000 metric tons.
Over the years, Intel (INTC) has addressed climate change by increasing use of green power to 71% globally and reducing its direct carbon emissions by 39% on an intensity basis from a 2010 baseline. The company set a target for 100% renewable energy use by 2030.
The initiatives towards reducing carbon footprint and climate change cannot show overnight results. However, these efforts can go a long way in ensuring the sustainability of our planet. In the words of Robert Swan OBE, “The greatest threat to our planet is the belief that someone else will save it.”
Disclaimer: The author has no position in any stocks mentioned. Investors should consider the above information not as a de facto recommendation, but as an idea for further consideration. The report has been carefully prepared, and any exclusions or errors in it are totally unintentional. All emissions from 2018. Fuel combustion only. GT = Metric gigatons and T = Metric tons
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.