Internet giants fail to grasp growing demand for carbon disclosure

The global internet sector, including Amazon, Baidu and Facebook, is failing to grapple with carbon disclosure demands and emissions reduction plans, according to new research published today.

A study by analyst firm Verdantix that assesses the carbon and energy management strategies of the world's 14 largest internet and social networking firms found that only a minority regularly reveal their environmental data and targets.

The report found that only four of the 14 companies in the study, including Akamai, Apple and eBay, disclose greenhouse gas (GHG) emissions from datacentres on a global basis.

Last week Google also revealed its carbon footprint for the first time. At around 1.5 million tonnes, the energy use of the online giant is on a par with the United Nations.

None of the 14 global internet giants covered in the analysis invest in assurance from a recognised independent verifier of GHG emissions data, despite the growing energy consumption of datacentres, which now account for about three per cent of total US electricity consumption.

China-based internet companies, Alibaba, Baidu and Tencent; travel booking sites Expedia and Priceline; movie and TV subscription site Netflix; customer relationship management software firm Salesforce; and internet consumer brands Amazon and Facebook do not disclose carbon emissions or data use, according to Verdantix.

Verdantix director David Meltcalfe said the study revealed an urgent need for internet firms to adopt a more strategic approach to energy and carbon management.

"Due to their rapid growth and global prominence, internet and social networking firms such as Facebook and Google will be confronted by a barrage of energy and carbon emissions challenges," he said.

"These include rising energy spend tied to exploding datacentre use, the potential negative impact of energy price volatility on financial results, and public criticism of sustainability commitments [by green groups].

"Big datacentre users such as Amazon and Salesforce cannot ignore the closing jaws of mandatory carbon reporting indefinitely."

Significantly, the report notes that, in several cases company boards have opposed shareholder requests for greater disclosure. In its June 2011 annual stockholder meeting, the board of Amazon rejected a proposal by socially responsible investor Calvert Asset Management for disclosure.

However, the report found that lack of disclosure does not always equate to lack of data. Some firms, such as Yahoo and, until recently, Google have measured their emissions since 2006, but refused to report them.

Verdantix also argued that internet firms making next to no effort to report data, such as Expedia and China's Tencent, must improve their strategies to remain competitive.

"Carbon management laggards in the internet sector should set 2010 as the baseline for GHG emissions and reduce brand risk by paying for assurance of their GHG inventory data," said Janet Lin, Verdantix senior manager in New York.

"Given their stellar growth rates, the 14 firms in this study cannot deliver absolute reductions in carbon emissions through energy efficiency. Instead they should track performance against intensity metrics... in datacentres. Risks from ignoring energy and carbon management will grow over time."