Achieving net-zero1 is a priority for many organizations today, and the technology industry is taking the imperative to heart. Deloitte Global predicts that in 2023, the tech industry will move faster on climate action than nontech industries. By “move faster,” we mean that more tech companies say they’re aiming for net-zero by 2030 than nontech companies. Deloitte’s 2022 CxO sustainability survey, which polled more than 2,000 C-suite executives worldwide, found that technology executives viewed net-zero as a more urgent priority: They were 13% more likely to target net-zero by 2030, and 24% less likely to push that goal past 2030 or have no plans (figure 1).2
That tech leaders are in a hurry to mitigate climate change may not be surprising, considering the attitudes and experiences they reported in Deloitte’s survey. Tech executive respondents were more likely to be worried about climate change than those in other industries, and more likely to report personal impacts (figure 2).3 Their direct experience with climate-driven adversity may be one reason they intend to act quickly.
Organizational impacts from climate change are growing—and quickly. Thirty-seven percent of surveyed tech executives reported that their organization is already experiencing a scarcity of resources such as water and energy—up eight points from a similar Deloitte survey conducted only eight months earlier. Thirty-eight percent said that they were feeling the cost of climate change mitigation—more than double the prior survey’s percent. And 42% percent said that their operations had been affected by climate-related disasters or weather events—up 18 points from the earlier survey.
These organizational disturbances are often consequential. For example, during London’s record-breaking July 2022 heat wave, two global tech companies’ cloud-based data centers experienced service disruptions due to cooling failures.4 In August, facing historic heat and drought that jeopardized the region’s power supply, China’s Sichuan province shut down factories, including electronics component makers that supply major tech companies.5 In 2019, US scientists were forced to power down one of the world’s most powerful supercomputers twice in two weeks due to preemptive multi-day power cuts intended to mitigate wildfire risk in northern California.6 And in 2021, severe winter storms in Texas triggered days of power outages and closed three major semiconductor plants.7
Stakeholder pressure is lending additional weight to these organizational and personal incentives. These include investors as well as customers, board members, and especially US and EU regulators that mandate more rigorous disclosures on greenhouse gas (GHG) emissions, environmental risks, and mitigation actions.8
Despite confronting these challenges and pressures, tech leaders aren’t throwing their hands up in despair. On the contrary: The 2022 Deloitte survey found that tech executives were more likely than executives in other industries to believe that immediate action could mitigate climate change’s worst impacts. Nine in ten of the surveyed tech leaders believed that their companies’ current sustainability initiatives will help mitigate climate change. And eight in ten believed their efforts would boost investor and customer satisfaction, employee morale, brand recognition, operating margins, revenue from new businesses, supply chain resilience, and innovation.9
What’s more, tech companies were more likely than nontech companies to have taken several steps toward mitigating climate change: creating a senior position to drive sustainability efforts, training employees on climate change actions, and publicly committing to a GHG reduction target through the Science-Based Targets Initiative (SBTi)—a coalition that helps companies set goals and timelines for reducing emissions (figure 2).10 As of August 2022, 338 of the 3,545 companies that have committed to developing net-zero targets with the SBTi were from the technology sector, making it the second-largest industry segment represented.11 More than four in ten of these tech signatories have already set emissions reduction targets.
Other signals also point to the tech industry’s sustainability leadership. For instance, a 2021 analysis found that of the top 10 US companies by market value, the five with the earliest deadlines for reaching net-zero were all tech giants.12 The tech industry is already among the biggest global buyers of renewable energy: In 2021, tech giants were responsible for more than half the corporate purchase agreements for clean energy.13 On the regulatory front, too, some large tech companies have themselves been advocating for mandatory disclosures on climate change.14
Such leadership is welcome from an industry estimated to be responsible for 2–3% of the world’s GHG emissions, mainly due to the enormous energy demands of technology manufacturing processes, billions of connected devices, and proliferating data centers.15 The good news is that the tech industry is starting from a smaller carbon footprint than others, and it has many opportunities to both reduce that footprint and help others do so.16 We’re seeing tech companies lead in several broad ways such as:
To meet the challenge of climate change, tech leaders can consider how their company’s mission, operations, business models, and products and services may need to adapt:
Like any industry, tech is vulnerable to climate change risks. But technology executives, more than most, seem to appreciate how vulnerable they are, and many are making strong commitments to do something about it. In 2023, the race to net-zero may see tech companies well represented in the vanguard.