5 minute read

Greenwashing the cloud: hyperscale providers and the climate crisis

CUDO Ventures

CUDO Ventures

The growing international consensus over the climate crisis is a major cause for celebration. As public support for environmental causes grows, so does the demand for corporations to do their part in averting disaster. This pressure has led to concerted action from both companies and governments. From the 2016 Paris Agreement to last year’s COP26 conference, we’ve seen a range of promising commitments to tackle climate change by the world’s nation-states. These commitments have been echoed by companies such as Amazon and Google, who have publicly pledged to pursue carbon neutrality over the coming decades.

But as promising as this shift in collective attitudes may seem, there is reason to be cautious. While big tech companies have succeeded in securing positive attention for their ambitious and deadline-driven sustainability goals, it’s important to look beyond the headlines. Climate catastrophe will be averted by bold action, not PR-friendly promises – especially in carbon-hungry sectors such as cloud computing.

Unfortunately, a peek behind the curtain reveals a somewhat different story. This post will look at how the boldest of big tech’s commitments are more reliant on creative accounting and quick-fix solutions than real and substantive changes. We need to pursue more transformative solutions that target the underlying economics and infrastructure of the tech landscape – and this is exactly what Cudos is looking to offer.

Carbon footprints and corporate responsibility

Beset by destructive weather, raging wildfires, and soaring temperatures, it’s becoming harder than ever to ignore the growing evidence that the Earth’s climate is in serious trouble. If we are to avoid succumbing to sheer fatalism, it’s important to ask how we can help avert an increasingly bleak future for human life. This starts with knowing just how much of an impact our own behaviour is making.

Luckily, it’s easy to find out just how much you individually contribute to the ongoing destruction of the planet. Organisations as diverse as the World Wildlife Fund, the UK government, and British Petroleum (BP) offer carbon footprint calculators, giving you a quantifiable sense of your own carbon emissions, along with advice on how to reduce them.

Of course, calculating your own carbon footprint can be more disheartening than motivating. The plain reality that everyday life results in huge amounts of greenhouse gases (GHGs) pumped into the atmosphere is difficult to acknowledge. And it may feel like the changes you make are fairly minor. For example, a car trip avoided here, a recycled plastic bottle there – does it add up to much in the grand scheme of things?

It’s also worth reflecting on how the concept of the carbon footprint itself pushes your focus toward your behaviour. But what falls out of sight are the larger-scale determinants of climate change. After all, no amount of cycling to work will compensate for the continued and widespread use of fossil fuels.

On this basis, you may be unsurprised to discover that the very concept of the carbon footprint is itself a brilliant piece of marketing by none other than BP. The company first unveiled its “carbon footprint calculator” in 2004 and hired the PR firm Ogilvy & Mather to help it popularise the term as part of its “beyond petroleum” marketing campaign. The campaign won BP a “Gold Effie” advertising award and helped to cement the concept of the carbon footprint in popular consciousness.

The upside for BP, was that those busy calculating and minimising their individual carbon footprints were paying less attention to the massive impact of fossil fuel extraction. By reframing climate change as an issue of personal responsibility, companies such as BP promote an environment in which everyone is equally responsible for tackling the issue – even if no personal choice could come close to offsetting the impact of the oil industry.

This is not to say that we shouldn’t take individual steps to live more environmentally conscious and sustainable lives. Small changes, if adopted at scale, can have massive impacts. But doing so at the expense of pushing for significant, large-scale changes by companies and governments is to miss the forest for the trees.

This applies just as much in the tech sector. In a recent post, we discussed the massive e-waste problem generated by companies such as Apple, whose economic commitment to planned obsolescence results in perfectly usable devices being discarded at an astonishing rate. While an individual commitment to repairing or repurposing older devices can help offset this impact, focusing on personal choice rather than on the underlying business model of the largest company on earth is hardly fair.

Personal choice is even less of a solution when looking at the cloud computing industry. Given the market is dominated by a small number of large-scale providers, with Amazon Web Services (AWS) foremost among them, it’s hardly reasonable for an individual to “switch” to a greener provider. This is especially the case, given that several major websites, social platforms, and streaming services utilise AWS for their cloud needs, including Netflix, Disney, Reddit, and the New York Times. Any individual looking to limit their contribution to the carbon impact of cloud computing would be effectively required to abstain from internet usage entirely.

Again, this does not suggest that individuals abdicate their commitments to climate action but actively supporting far-reaching solutions can be highly effective. However, holding companies and governments to account must be at the core of any solution to the climate crisis.

Thankfully, both nation-states and corporations have displayed stronger commitments to tackling climate change in recent years. If we follow the headline-grabbing pledges and large-scale summits, we may have a sense of confidence that the climate crisis is finally taken seriously.

But as the subtle marketing behind the carbon footprint shows, one must be wary of environmental claims. Just as climate activists have cast doubt over the sweeping commitments made by developed nations, we need to be sceptical about the degree to which we can trust big tech to keep their often-impressive promises.

Big tech’s bold climate commitments

Last year, the United Nations Climate Change Conference (COP26) drew together delegates from over 200 countries, including 120 heads of state. Six years after the Paris Agreement, the conference saw participating nations make further pledges to mitigate climate change, including committing to the reversal of deforestation and reduction of fossil fuel usage. The Glasgow agreement was the first climate statement to highlight the need to limit coal power usage expressly.

While the measures agreed at COP26 fell short of the hopes of climate activists, they nevertheless represent a willingness to commit to climate action. The commitments made in Glasgow show widespread agreement that climate change is a pressing danger to human life and that something must be done to avert disaster.

This action on the part of nation-states has been mirrored by the world’s largest companies, many of which are in the tech space. And given the extensive evidence that consumers are increasingly willing to factor sustainability into their purchasing decisions, it’s unsurprising. As the impact of climate change becomes more visible, companies that stress their green credentials will have a critical competitive advantage.

But are these credentials quite what they seem?

If we turn to the major players within the cloud computing industry, we see a range of impressive-sounding commitments to limit climate impact. Google has made the boldest pledge, aiming to become “the first major company to operate carbon-free” by 2030. Microsoft has similarly far-reaching ambitions, aiming to be “carbon negative” by 2030 – that is, removing more carbon from the atmosphere than they add.

Amazon’s specific goals are modest in comparison. Their Climate Pledge commits to achieving net-zero carbon by 2040 – some ten years after Microsoft and Google will have made their far larger steps toward sustainability. Amazon’s major innovation, however, is to encourage other companies to sign up for their pledge. As of 2022, the website for Amazon’s Climate Pledge advertises 200+ signatories across 26 industries, including computing giant IBM, household products manufacturer Unilever, and automotive leaders Mercedes-Benz.

What is more, Amazon has taken steps to support signatories in achieving their climate goals actively. For example, in 2020, they launched the Climate Pledge Fund, committing an initial $2bn in funding to “support the development of sustainable and decarbonising technologies and services.” While Amazon may be more tentative when it comes to their timeframe for carbon neutrality, they’re willing to put their money where their mouth is. Amazon has highlighted the need for large-scale collective and collaborative action.

From initial appearances, it seems that big tech is quite willing to shoulder its responsibilities, but there are two key questions we need to ask when considering these superficially impressive commitments. Firstly, how are they going to be achieved? Focusing on the outcome and not on the process itself is great for Amazon’s publicity but less helpful for those wanting to hold them to account.

Secondly, and more significantly, there are questions about what is committed to and what would count as success. While we may be familiar with terms like “net-zero” or “carbon neutral”, understanding how these terms are defined and measured is more complex. Ultimately, the appeal of “carbon neutral” commitments stem precisely from this ambiguity.

The limitations of carbon neutrality

Following the launch of their Climate Pledge in 2019, Amazon received a great deal of laudatory press coverage. But once the initial buzz died away, there remained lingering questions over what Amazon had actually committed to and how would it be achieved.

In January 2020, the environmental group Greenpeace issued a scathing report on the sustainability pledges of the major cloud computing companies. Much of their ire was focused on Amazon, who they criticised for offering an attention-grabbing and superficially appealing pledge without a concrete plan behind it. While they acknowledged Amazon had finally publicised their current carbon footprint – an astonishing 44.4m tonnes of CO2 per year – this made it even more concerning they had not given any details on how they aimed to reduce it.

In February 2022, an in-depth analysis by two climate action groups found that little had changed. The “Corporate Climate Responsibility Monitor 2022” reviewed the sustainability initiatives of 20 major companies and found persistent issues with both their transparency and integrity. In the case of Amazon, they noted that the company’s net-zero carbon pledge “currently remains unsubstantiated,” with no clear indication of which emissions will be covered by this target. Further, Amazon does not specify the extent to which the target will be met by reducing emissions or by offsetting them.

These criticisms cut to the heart of the issues around “carbon neutral” or “net-zero” pledges. These pledges refer to a balance between the carbon generated by a company and absorbed from the atmosphere through various offsetting schemes. Thus, carbon neutrality can be achieved in two ways: lowering emissions or increasing offsetting. This raises two immediate questions – how does a company measure the CO2 it generates, and how effective are the schemes for offsetting it?

In the first case, the most widely used tool for assessing GHG emissions distinguishes between three different “scopes.” Scope one refers to direct emissions from company-owned or controlled sources. In contrast, Scope two refers to emissions from the energy purchased by the company to power its operations. Finally, Scope three is a broader category that tries to capture the indirect emissions from a company’s whole value chain, from waste disposal costs to the use of their products after the sale.

These different ways of categorising emissions offer companies leeway in calculating their emissions – and thus justify their carbon neutrality claims. Amazon, for instance, does include Scope three emissions within their calculations but are not clear about what they specifically include or exclude. The Corporate Climate Responsibility Monitor Report notes that not only does Amazon not specify its Scope three emissions with any clarity, it’s also unclear whether it factors in the emissions of its subsidiaries. Given that Amazon has in recent years purchased several large-scale companies within the tech space, this is a vital question when it comes to understanding their specific commitments.

A lack of information about how a company calculates its emissions is concerning. Can we trust its claims to be carbon neutral if we don’t know exactly how it’s being measured? If Amazon’s carbon neutrality pledge relies on excluding some Scope three emissions and factoring out it’s subsidiaries, it’s hardly as impressive as it first seems.

Understanding how a company plans to achieve their goals by reducing emissions and offsetting them is also important. Particularly since the calculations around the impact of offsetting schemes are often controversial. For instance, a common offsetting scheme involves investing in reforestation projects on the basis that trees actively remove CO2 from the atmosphere as part of their respiration process. Thus, a specific number of trees planted can be translated into a specific quantity of CO2 and then discounted against a company’s current emissions.

However, such offsetting schemes allow companies to count decades’ worth of CO2 removal from each tree planted. This justifies continued emissions in the present by pointing to potential reductions in CO2 in the future and assumes that every tree planted will reach maturity – hardly a safe assumption. There was a grim irony in the fact that last year’s US wildfires, driven by climate change, burned down huge amounts of trees planted as part of carbon offsetting schemes. As a result, the claimed carbon offsets may never actually occur.

Further, many schemes are not directly invested in by companies looking to offset their emissions. Instead, the schemes sell “carbon credits” that companies can then deduct from their emissions totals. This effectively allows companies to buy their “carbon neutrality” with little direct investment in environmental projects or concrete attempts to reduce their emissions. It leads to a “pay to play” market for carbon emissions, where cash-rich companies have a significant advantage in meeting their environmental commitments with minimal effort.

These approaches are evident in Google’s superficially impressive claim to have been “carbon neutral since 2007”. While this would put the company far ahead of its competitors, the truth is rather less compelling. Not only does the claim exclude scope three emissions – which constitutes 60% of the company’s emissions as of 2020 – it also relies on dubious offset schemes. Google invested extensively in carbon credits to support this claim, but many of these projects involved the installation of methane capture technology. Such technology is already attractive to companies for the captured gas’s resale potential, and many of these projects would have been pursued anyway for their inherent financial benefits. Google has also invested heavily in forestry-related projects, with similarly contestable outcomes.

Of course, this is not to say that companies such as Amazon and Google are entirely evading their environmental responsibilities. Amazon is proactively investing in electric cars for its fleet of delivery vehicles, and Google’s commitments to using renewable energy have influenced other companies to adopt similar approaches. However, these tangible successes are far more modest than the headline-grabbing goals. It’s perhaps unsurprising that both companies have backed groups opposing major US climate legislation.

Fighting for significant climate action in the cloud computing space

While big tech companies seem to be acknowledging the urgency of the climate emergency, their bold commitments to sustainability suggest their priority remains on their public image rather than the often-unglamorous work of pursuing greener business practices. While companies such as Amazon and Google are certainly taking important steps toward eco-friendliness, their ambitious corporate goals often disguise a preference for partial or misleading solutions that allow them to simply throw money at the problem without changing the fundamentals of their business models.

Given the scope of the emergency we face, this is simply not enough. Before COP26, the UN warned that the world was on track for a catastrophic 2.7°C temperature rise based on current plans to curb emissions. While the strengthened commitments achieved by COP26 are an essential step, the world’s largest and wealthiest companies must do their part. And this means doing far more than simply buying their way to notional carbon neutrality. It requires significant and far-reaching changes to how they operate.

But how realistic is this in practice? Amazon now makes much of its revenue from its cloud service AWS, which requires the continued construction of massive hyper-scale data centers. Such data centers are enormously energy-hungry and are still powered by coal in many cases. While Amazon’s business model relies on the economies of scale offered by these data centers, it’s difficult to imagine them taking significant steps to reduce their emissions.

We cannot substitute individual responsibility for large-scale corporate change or rely on purchasing decisions to influence such change. This is especially the case in industries such as cloud computing, where the average individual has little impact on corporate behaviour. But this does not mean we simply need to accept Amazon’s cavalier approach to sustainability. Instead, we can proactively support sustainable alternatives – and that is just what Cudos is offering.

CUDO Compute will provide a decentralised cloud computing solution allowing for the peer-to-peer sharing of computing resources globally. This will both prevent the need for hyper-scale data centers and allow for the utilisation of idle computing power – much of which may otherwise find its way into the environmentally damaging tide of e-waste.

By supporting CUDO Compute, you can help us work toward a truly sustainable future for cloud computing – one that goes far beyond the greenwashing promises of Amazon and others. Such decentralised solutions depend upon as many people as possible, so why not to see how you can help? Participating in the testing phase can help us ensure a smooth launch for CUDO Compute and give you free computational resources for your efforts.

About CUDO Compute

CUDO Compute is a fairer cloud computing platform for everyone. It provides access to distributed resources by leveraging underutilised computing globally on idle data centre hardware. It allows users to deploy virtual machines on the world’s first democratised cloud platform, finding the optimal resources in the ideal location at the best price.

CUDO Compute aims to democratise the public cloud by delivering a more sustainable economic, environmental, and societal model for computing by empowering businesses and individuals to monetise unused resources.

Our platform allows organisations and developers to deploy, run and scale based on demands without the constraints of centralised cloud environments. As a result, we realise significant availability, proximity and cost benefits for customers by simplifying their access to a broader pool of high-powered computing and distributed resources at the edge.

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