A new report by three environmental groups says that tech companies that have promised to slash their greenhouse gas emissions have a big blind spot. Tech giants like Apple, Meta, and others are indirectly financing fossil fuel companies with their cash and investments.
Big Tech's profits are still funneled into heavily polluting industries despite the companies taking steps to cut down on pollution. The report finds that the emissions associated with financial activity far exceed the emissions from each company's operations.
Financial institutions they bank with still funnel Big Tech’s profitsinto heavily polluting industries
It isn't typically included in companies' assessments of their emissions, so it has flown under the radar. The report says that if emissions associated with the cash holdings were taken into account, it would increase their carbon footprints by between 91 and 112 percent.
The problem is caused by how banks decide to use funds. The banks put money to work when companies give them cash. The money could be used to finance energy projects or grant loans to other companies. According to the report, the 60 biggest commercial and investment banks in the world have collectively invested $4.6 trillion in the fossil fuel industry.
The pollution that is heating up the planet is a result of those kinds of investments. According to the report, every $1 billion in cash that a bank puts to work is responsible for pollution comparable to the annual emissions from 27,398 vehicles. The carbon intensity of the US financial sector is equivalent to 126 thousand metric tons of carbon dioxide per billion dollars according to a report. Projects and companies funded by the financial sector can lead to emissions from things like utilities, mineral exploration, or even real estate and IT projects.
For the first time, the report estimates the financial carbon footprints of nine different tech and media companies. Researchers got information on each company's cash and investments. The authors matched that to established measures of carbon intensity for different kinds of investments to estimate each company's financial footprint.
Apple reported $191 billion in cash and investments to the SEC. The report estimates that the billions of dollars generated 15 million metric tons of planet-warming emissions. It is three times as much climate pollution as the emissions generated from the use of every Apple product in the world that year.
Apple will reduce its carbon dioxide emissions by 75 percent. The company has pushed hundreds of its suppliers to reduce their own pollution. The authors of the report contend that companies like Apple that want to have a positive impact on climate change should apply the same pressure on banks.
“The lever we use the least turns out to be the most powerful tool we have”
The Climate Safe Lending Network, The Outdoor Policy Outfit, and BankFWD collaborated on the report. The groups enlisted the help of finance data experts from the social enterprise South Pole.
The data in the report tells us that the most powerful tool we have is the lever we use the least.
On the record, the companies declined to give comment. The other companies didn't reply by the time they were published.
Check out the full report to see how each company stacks up.