Key Takeaway: Google, Amazon and other companies announcing plans to source renewable energy appear to taking real measures to cut emissions, and moving away from the practice of taking small steps for publicity — known as greenwashing. Of course, there’s more to do.
September was a banner month for tech companies promising to boost renewable energy investment. Google and Amazon announced initiatives to reduce greenhouse gas emissions. Other corporations also took steps to become greener.
At the same time, these proposals are taking aim at another problem — that of corporate greenwashing, where companies announce environmental initiatives that seem more about boosting their image than environmental commitment.
Recent announcements include verifiable steps, unlike some past pronouncements that appeared to be empty rhetoric or based on falsified data, experts say.
“Google and other companies are doing good stuff,” Joshua Posamentier, co-founder and managing partner at Congruent Ventures, told Karma. “Now they are taking their renewable strategy to the next level by targeting a zero-carbon energy footprint on a region-specific 24-7 basis.”
“Going green is good business. Once you’ve made the upfront investment it’s almost free. You’ve paid for the ‘fuel’ up front.”
The latest initiatives follow a history of promises from big polluters trying to appear environmentally friendly. Automobile and energy companies have been particularly taken to task in recent years, marketing new products such as diesel-powered cars and investment in alternative fuels considered more eco-friendly even as their core businesses contribute major shares of the world’s CO2 gases.
Still, with the U.S. pulling out of the Paris Agreement and China and other industrial countries lagging in their commitment to reduce emissions, companies may be sensing a greater imperative to lead the fight against climate change. The United Nations Climate Action Summit of Sept. 21 was notable for the inaction of participating countries.
Nathanael Greene, a senior renewable energy policy analyst at the Natural Resources Defense Council told Karma that while “there’s always the risk of greenwashing,” a number of companies are already having a positive impact on the U.S. electric grid by switching to clean wind and solar energy.
Renewables were responsible for 17% of U.S. electricity generation last year, according to the Energy Information Administration. Renewable generation has surged 71% in the last decade while use of coal at power plants has tumbled 35%. The EIA said that renewables accounted for 28% of the world’s electricity in 2018. They will climb to 49% of the total in 2050, according to the EIA’s International Energy Outlook 2019.
“While both electricity producers and large consumers like technology companies green their power, the U.S. power supply continues to get cleaner,” Greene said. “This is only going to accelerate as the costs of renewable power continue to plummet, forcing old, dirty fossil fuel plants off the grid.”
Google and Amazon
On Sept. 19, Google announced the biggest so-called power purchase agreement (PPA) of renewable energy in history. The company will buy 1,600-megawatts of wind and solar energy in 18 separate deals with renewable providers. The pact will boost the company’s worldwide renewable energy portfolio by more than 40%, CEO Sundar Pichai said in a blog post.
Google will purchase about 720 megawatts of electricity from solar farms in North Carolina, South Carolina and Texas, shifting focus from wind, where it has made most of its previous renewable investments. In Chile, Google will add 125 megawatts of renewable energy capacity to the grid, which supplies a data center. In Europe, the company announced purchases in Finland, Sweden, Belgium and Denmark.
The new projects will spur more than $2 billion in energy infrastructure building, Google said.
A year ago, Google announced its intent to rely entirely on carbon-free electricity. Google says its data centers account for most of its electricity consumption, and while the company has made improvements in reducing energy needs, it still uses 10 terra watts of electricity a year (Washington D.C. uses over 11 terra watts).
“If you have a huge data center that’s got a PPA for solar power, it’s almost guaranteed to be using mostly non-renewable energy during the nighttime hours,” Posamentier said.
In a speech at the National Press Club in September, Amazon CEO Jeff Bezos said that he expects 80% of his company’s energy consumption to come from renewables in five years, up from 40%. Bezos said the online retail giant would achieve zero emissions by 2030, meeting a goal of the 2016 Paris Agreement on climate change 10 years early. The agreement aims to limit the global temperature increase to “well below 2 degrees celsius” from pre-industrial levels.
Bezos said Amazon will purchase 100,000 electric delivery vans from Rivian, deploying them by 2024. The new vehicles will replace the current fleet, which uses fossil fuels. Amazon has invested $440 million in Rivian, which also has backing from Ford.
Amazon is also pushing suppliers to cut carbon emissions, and on the day of Bezos’s speech pledged $100 million to The Nature Conservancy, the largest philanthropy in the U.S., to restore and protect forests, wetlands and grasslands globally.
“The climate science community is surprised by how quickly things are changing,” Bezos said. “We’ve been in the middle of the herd on this issue and we want to move to the forefront.”
In 2017, Google, Amazon and more than 1,400 other American companies including Twitter, Microsoft and IBM signed a “We Are Still In” declaration, promising to slash carbon emissions by 26% by 2025.
“The climate science community is surprised by how quickly things are changing. We’ve been in the middle of the herd on this issue and we want to move to the forefront.”
Meanwhile, retail giant IKEA’s holding company, Ingka Group, announced in the runup of the UN climate summit that it has spent $2.76 billion on solar and wind power over the last decade. The company projects that its supply chain will become climate positive by 2030. Climate positive means that an organization is removing additional carbon from the atmosphere beyond what would be necessary to achieve a net zero effect.
Corporations aren’t trying to become greener for purely humanitarian reasons; rather, climate change initiatives can also help their bottom line. An International Renewable Energy Agency report in June showed that unsubsidized renewable energy is often cheaper than fossil fuels. IRENA found that new wind and solar facilities will soon undercut the operating costs of existing coal-fired plants, while renewable costs consistently drop by more than projected.
“Going green is good business,” Posamentier said. “Once you’ve made the upfront investment it’s almost free. You’ve paid for the ‘fuel’ up front.”
Oil and Cars
Still, many corporate green initiatives are often dismissed as greenwashing because they appear to be little more than public relations spin lending the false impression that company products and services are environmentally friendly. For example, BP Plc.’s “Beyond Petroleum” campaign during the first decade of the century focused on the company’s wind and solar investments, downplaying that the vast majority of its business remained in hydrocarbons. The BP-leased Deepwater Horizon drilling rig explosion, which led to the largest ocean oil spill in history, served as a further reminder of BP’s fossil fuels focus.
In the auto industry, Volkswagen, Mercedes Benz and Fiat Chrysler touted their “clean diesel” cars for years. Diesel vehicles get better gas mileage, reducing their carbon output. But they also release nitrogen oxide, which leads to smog, acid rain and reduction of the ozone layer. Volkswagen seemed particularly aware of diesel’s downside when regulators found that the German auto giant had been manipulating emissions tests.