Some of the world’s best-known tech giants are emitting more while presenting climate targets that cause a system error due to outdated accounting rules and the voracious appetite for energy of artificial intelligence (AI), according to the latest Corporate Climate Responsibility Monitor. Fixing this requires a major reboot of their climate strategies.
NewClimate Institute and Carbon Market Watch are due to release the latest instalment of the 2025 edition of the Corporate Climate Responsibility Monitor on 26 June, alongside the section on the fashion sector. The CCRM evaluates the tech sector based on a number of key parameters measuring the effectiveness of their transition towards climate-friendly and sustainable business models: renewable electricity for data centres and in the supply chain, prolonging the life span of devices, and utilising more recycled components in hardware production.
Billions of people around the world use and rely on the technology services and platforms offered by Amazon, Apple, Alphabet (Google and YouTube), Meta (Facebook and Instagram) and Microsoft. Yet these household names, despite some efforts and isolated examples of good practice, are all falling behind in the climate stakes. The climate strategies of these tech titans may fail to keep pace with their mushrooming energy demand, propelled largely by the less than smart rollout of artificial intelligence as they race for preeminence.
“The greenhouse emissions targets of these tech giants seem to lean on outdated emissions accounting rules that distort reality,” says Benja Faecks, a global carbon market expert at CMW who is involved in the CCRM. “Standard setters need to mandate rigid accounting systems to make emissions disclosure meaningful, and guide target setting accordingly.”
Doesn’t compute
Although these five companies have held on to net zero targets that are presented on paper as compatible with the goals of the Paris Agreement, only Apple, Google and Microsoft have further supported these pledges with specific emissions reductions targets. However, even where they exist, emission reductions targets are undermined by two factors.
Firstly, they too often rely on logic errors that would contribute to a system crash if left unchecked. One example of this is when companies use electricity sourced from a grid reliant on fossil fuels but compensate for this by buying electricity certificates from renewable generators not linked to those grids. These so-called market-based emissions appear low or falling while their actual location-based emissions have soared exponentially since 2019.
This reliance on standalone renewable energy certificates (RECs) is significant because it may not bring about additional investment in renewables, undermining one of the most important principles of climate action: additionality. To eliminate this problem, investment in renewable energy certificates should occur in a way that matches actual consumption in real time. Google and Microsoft have taken some strides in this direction through the deployment of hourly matching methodologies.
Secondly, the rapid expansion of AI, which is a voracious consumer of electricity and water, casts serious doubt on whether tech companies can actually deliver significant cuts in their emissions by the critical 2030 threshold.
About CCRM
First launched in 2022, the annual Corporate Climate Responsibility Monitor is a joint initiative between NewClimate Institute and Carbon Market Watch. NewClimate leads on investigating corporate climate strategies and CMW leads on the policy implications and recommendations of the research.
