The great green reckoning: Is tech the next target?

At N/N we’ve noticed an uptick in concerns about greenwashing recently, both among our client base, and more generally in the public sphere. When companies as large and diverse as Vanguard, Shein and Tyson Foods are being hauled over the coals, it’s no surprise research based on our iN/Ntelligence platform shows coverage of allegedly spurious sustainability claims is growing more comprehensive, and critical.

Amid all the data, debate and indignation, we’ve noticed a curious omission: mentions of the technology industry, and big tech in particular. Sure, it’s possible to find articles and commentary on greenwashing in the tech sector. But generally speaking, tech firms don’t come in for nearly as much stick as their counterparts in financial services, retail or manufacturing. For an industry that’s such an outsize presence in just about every other debate, in this context it’s conspicuous by its relative absence.

One possible reason is that tech companies are generally adept at managing their sustainability obligations, and aren’t prone to embellishment. Indeed we’ve commended Microsoft for its transparency in emissions reporting, and in some markets the tech sector leads the rest when it comes to setting and working towards concrete climate targets.

A double-edged sword

Such progress should be commended. But we suspect other factors might be at play. Not only are tech companies and greenwashing linked relatively infrequently; when the connection is made, it’s often in a positive sense, whether by regulators excited by the prospect of more data-driven compliance or consultancies employing GenAI to highlight possible danger zones in sustainability communications.

Even when the greenwashing-busting claims come from tech companies themselves, they’re picked up and amplified to a degree that helps balance out more negative associations. Especially, it seems, when it comes to AI. The relentlessness of its champions and the frequency with which it’s been touted as the answer to everything from healthcare to poverty, even the ‘downward spiral of human loneliness’ (yikes), makes drawing the conclusion easy enough: If AI can solve all those problems, why not greenwashing too?

But behind this enthusiasm lurk some very stark facts: the energy impact of AI will be colossal, and very likely highly destructive. London-based asset manager Polar Capital estimates the power needed to run data centres for AI training will surge from 5 gigawatts (GW) currently to 40 GW by 2027 – exceeding the UK’s total annual power consumption.

Mitigating factors could come into play. Renewables will take up a greater portion of the energy mix. Companies like Amazon and Microsoft are diligently buying up solar and wind capacity, and offsets to meet their net zero pledges. Advances in computing practices and data centre infrastructure might make it possible to avoid the worst-case energy consumption and climate scenarios. We should also acknowledge there is significant potential for AI and data analytics to contribute to energy efficiency, along with other worthwhile goals.

Poster child no longer

Nevertheless, it will be increasingly difficult for the industry to position itself as a ‘solution’ when some of its leading voices are blithely suggesting AI has to be made as abundant as possible, even if that “requires lots of energy.” Just as investors are starting to question the AI story, we’re betting the tech sector’s relatively easy ride may be coming to an end, as some of the contradictions between sustainability commitments and the massively energy-intensive services it’s pushing come under more scrutiny.

There are already signs the tide is turning. A new analysis by the Guardian estimates data centre emissions may be nearly seven times higher than the top tech firms estimate. The MIT Technology Review has challenged some of the offset and carbon accounting practices of firms like Amazon. Bloomberg has recently reported cases of tech majors actively obfuscating the impact of their growing power usage. Coverage of the recent defeat of California’s proposed AI safety bill has in some quarters highlighted the alleged willingness of some big tech companies to prioritise innovation over human safety. Where the media goes, the public, customers, investors and regulators are bound to follow.

Prepping for the spotlight

Many tech companies are already doing the right thing, or at least doing their best, and this doesn’t necessarily argue for a radical change of direction. But we recommend that as these trends gain momentum, tech firms, and particularly those within them tasked with explaining policies and decisions to the outside world, stress-test their sustainability messaging and get ready to answer some challenging questions before they’re put on the spot. Examples might include:

*Do we have policies, positions or achievements we can point to that show we develop, use and/or promote AI in a way that’s sensitive to environmental and social impact? Are we ready to provide evidence to that effect if required?

*If our net-zero commitments include offsets, can we explain why they form part of our strategy and the details of how they work? Are there any plans we can share to transition to a more direct form of emissions reduction?

*As technologists, do we provide advice or deliver tools to our teams, clients and partners that encourage the judicious use of computing resources? If not, are these capabilities we can develop?

As queries like this become more common, the response shouldn’t be panic, but proactive and careful consideration of how developments and data around climate or social impact goals are articulated and presented. It isn’t so much a matter of tech getting called out, as tech joining the club of enterprises forced to reckon with the gaps between statements of principle, and real-world outcomes.