Despite high-profile climate commitments of net zero or carbon neutrality, the tech sector is facing a credibility crisis, finds the Corporate Responsibility Monitor 2025. In a scenario where AI is becoming a central component in companies’ business functions, energy demand and correlated emissions are growing exponentially. Current accounting practices fail to provide a clear picture of tech giants emission profiles. Companies, regulators and international standard bodies must rethink how climate leadership in the tech sector can be assessed and credibly achieved.
The widespread use of market-based over location-based accounting to report scope 2 and scope 3 emissions, especially in the perspective of a rapid expansion of AI and soaring energy demand, casts a shadow on the meaning and relevance of tech companies’ GHG emission targets and neutrality pledges.
Progressive first movers, notably Google and Microsoft, present modes of hourly matched renewable energy procurement. Apple leads the sector on renewable energy employment in the supply chain. These efforts are heartening, yet isolated.
Tech companies often fail to report their use of third-party data centers or the associated emissions, despite this being a major emissions source of their footprint. Similarly, most offer only vague plans for sourcing renewable energy in their supply chains, including for server hardware.
Companies clearly lack targets to extend device lifespans or improve repairability, which constitute steps to reduce emissions from production. While recycled materials are acknowledged as important, emissions from sourcing minerals remain largely undisclosed.
“As tech companies pledge to achieve net zero or carbon neutrality, many of their targets risk becoming obsolete in the face of AI’s rapidly growing energy demands. Without robust accounting methodologies that reflect the full environmental cost of digital expansion, corporate climate commitments risk being more symbolic than substantive. Therefore, clear and rigourous reporting is essential and needs to go hand in hand with meaningful and measurable climate action.”
Benja Faecks – Policy Expert at Carbon Market Watch
Rethink and reformulate emission reduction and renewable energy targets and accounting
Companies should set separate both location-based emissions targets and 24/7 renewable energy procurement targets to ensure the most clarity about their climate impact. GHG-Protocol and SBTi should mandate location-based emissions reporting in their forthcoming guidelines and standards.
Tech transitions need guidance
While key transition measures are addressed by companies, guidance by standard setters or regulatory actors is needed, anchored in industry benchmarks and scientific evidence. This is essential to steer toward a 1.5°C compatible pathway.
Transparency on energy and growth challenge
It is the companies’ responsibility to transparently communicate on what the growth of AI and data centre energy demand means for their climate impact.
Commitment to key transitions
Key transitions need to be incorporated into companies’ climate strategies to ensure the sector decarbonises at a speed needed for a 1.5 degree aligned pathway. Companies as well as standard setters have to use their capacities to mainstream these measures.
You can find more information about the 2025 Corporate Climate Responsibility Monitor methodology here.
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