Tech Companies Underreport CO2 Emissions

Study reveals missing data for scope 3 greenhouse gases

Peer-Reviewed Publication

TECHNICAL UNIVERSITY OF MUNICH (TUM)

Companies in the digital technology industry are significantly underreporting the greenhouse gas emissions arising along the value chain of their products. Across a sample of 56 major tech companies surveyed in a study by the Technical University of Munich (TUM), more than half of these emissions were excluded from self-reporting in 2019. At approximately 390 megatons carbon dioxide equivalents, the omitted emissions are in the same ballpark as the carbon footprint of Australia. The research team has developed a method for spotting sources of error and calculating the omitted disclosures.

For policy makers and the private sector to set targets for reduced greenhouse gas emissions, it is important to know how much CO2 companies are actually emitting. However, there are no binding requirements for comprehensive accounting and full disclosure of these emissions. The Greenhouse Gas (GHG) Protocol is seen as a voluntary standard. It distinguishes three categories of emissions: Scope 1 refers to direct emissions from a company’s own activities, scope 2 refers to emissions from the production of purchased energy, and scope 3 to emissions from activities along the value chain, in other words all emissions from raw material extraction to the use of the end product. Scope 3 emissions often represent the majority of a company’s carbon footprint. Past studies have also shown that these emissions account for most reporting gaps. Until now, however, it was not possible to quantify these gaps or determine their causes.

Lena Klaaßen and Dr. Christian Stoll at the TUM School of Management of the Technical University of Munich (TUM) have developed a method for identifying reporting gaps for scope 3 emissions and used it in a case study to determine the carbon footprints of pre-selected digital technology companies. Their paper has now been published in the journal Nature Communications.

Companies publish inconsistent figures

Klaaßen and Stoll determined that many companies submit different greenhouse gas emission figures depending on where they are reporting them. They focused mainly on the companies’ own reports as compared with voluntary disclosures to the non-profit organization CDP. The annual survey of companies conducted by CDP is regarded as the most important collection of data based on the structure of the GHG Protocol. Most companies disclose lower emissions in their own reports than in the CDP survey. This could be partly due to the fact that the CDP report is intended mainly for investors, while corporate reports are addressed to the general public.

In addition, CDP leaves it up to the reporting companies to choose which of the 15 GHG Protocol categories – ranging from business travel to waste disposal – are relevant to them. The studies show that this discretionary freedom results in some companies ignoring certain categories or not fully reporting the related emissions. Most companies have reporting gaps simply because they do not receive emissions data from all suppliers and do not fill the gaps with secondary data.

To close the gaps, Klaaßen and Stoll calculate the emissions by applying the values of several comparable companies which report complete figures. They take into account whether these companies are from the same industry and are comparable in terms of key indicators such as sales, profits and workforce size. To apply a uniform benchmark, they assume that GHG Protocol categories are relevant to a company unless it specifically states that emissions are non-existent in this area.  

751 vs. 360 megatons carbon dioxide equivalents

Klaaßen and Stoll applied this method to quantify the scope 3 emissions of 56 digital technology companies. Due to its high energy consumption, this industry is seen as a major source of CO2 emissions, but has frequently claimed that it is committed to a low-carbon business model. The case study investigates software and hardware manufacturers which were included in the 2019 Forbes Global 2000 list, ranking the world’s largest public companies, and have participated in the CDP survey in the same year.

The calculations show that in 2019 the analyzed tech companies did not disclose more than 50% of greenhouse gas emissions along the value chain in their own reports and/or the CDP survey. Instead of the reported 360 megatons carbon dioxide equivalents (the standardized unit for all greenhouse gases), the study arrives at a total of 751 megatons. The 391 megatons discrepancy is comparable to the annual greenhouse gas emissions of Australia.

Significant differences between companies

Half of the companies submitted data to the CDP that did not agree with the data disclosed in their own corporate reports. It was especially common for these reports to ignore GHG Protocol categories that contribute substantially to emissions. For example, 43 percent of the companies neglected emissions from the use of sold products and 30 percent neglected purchased goods and services.

The differences in the quality of companies’ disclosures was significant. Whereas some companies omitted only one GHG Protocol category, others ignored all classes of scope 3 emissions. In the biggest discrepancy found by the researchers, the publicly disclosed emissions and the figure calculated differed by a factor of 185. The closest amounts differed by just 0.06%. Hardware companies had omitted more than half of their overall emissions, and software companies somewhat less than half. Companies that have announced ambitious CO2 reduction targets were relatively accurate in their reporting. Here the difference between the disclosed and adjusted quantities was less than 20%.

“Consider adopting binding regulations”

“The often unsystematic and inaccurate reporting of companies’ carbon footprints is a problem for policymakers, stakeholders and the companies themselves,” says Lena Klaaßen. “The lack of transparency makes it difficult to set realistic targets and develop effective strategies to reduce greenhouse gas emissions and the proper assessment of companies.” In addition to further research on other branches, the authors believe, that a new regulatory framework is needed. “In light of the current underreporting we have observed, it seems unlikely that voluntary guidelines alone can bring about more accurate disclosures in the future,” says Christian Stoll. “Consequently, policy makers should think about binding guidelines with clear rules on how greenhouse gas emissions are reported.”

More information:
The study was conducted at the Center for Energy Markets at the TUM School of Management.
 
The open-access publication was funded by DEAL.

Lena Klaaßen is currently doing research at ETH Zürich.


JOURNAL

Nature Communications

DOI

10.1038/s41467-021-26349-x 

METHOD OF RESEARCH

Case study

SUBJECT OF RESEARCH

People

ARTICLE TITLE

Harmonizing corporate carbon footprints

ARTICLE PUBLICATION DATE

22-Oct-2021

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Tom Waeghe
November 20, 2021 6:06 am

But, but AlGore said they will monitor and police all CO2 emissions and sources and make them pay or be fined…Or maybe CO2 emissions are relatively meaningless in terms of the overall scheme of things. Everyone wants to talk about carbon footprint etc. and what’s really important is whether CO2 is driving global temperatures or not. If it’s not then who cares about anybody’s footprint.

Bill Powers
Reply to  Tom Waeghe
November 20, 2021 6:55 am

Increases in upper atmospheric CO2 is actually a byproduct of temperature increases in our climate brought on by increased radiation from our Sun during peak solar cycles. in other words heating increases the CO2 footprint not the other way around. Well, that and the hot air emanating from ALGORE and his CO2 hustling handlers.

Joseph Zorzin
Reply to  Tom Waeghe
November 20, 2021 7:29 am

I wonder if Gore is counting his own emissions?

David Kamakaris
Reply to  Joseph Zorzin
November 20, 2021 7:32 am

There’s a better chance that pigs will fly across the Atlantic Ocean at midnight tonight and the Sun rising in the West tomorrow morning than fat Al giving a rat’s ass about his emissions. .

In The Real World
Reply to  Tom Waeghe
November 20, 2021 1:06 pm

The whole global warming scam is about taking money from western countries , so this is all about wanting more carbon taxes .

What is very noticeable is that none of the greens or media will actually mention how much the human CO2 emissions are as part of the atmosphere .
About 97% of CO2 is produced naturally . If you take , for instance , the UK only does 1% of human CO2 emissions , then the final figure is just 1 part in 10,000,000 parts of atmosphere , [ or 0,000012% ]
So even if you believe that CO2 could affect climate , then that tiny tiny amount is much too small to have any possible influence .

Tom Abbott
Reply to  In The Real World
November 20, 2021 4:38 pm

It’s all about control. They want to control everything from beginning to end.

Scissor
November 20, 2021 6:07 am

Freedom of choice might be an option.

LdB
November 20, 2021 6:27 am

Only now it is beginning to dawn on them that compliance is problematic?
We see the same stupidity over and over again you can’t force other countries to meet compliance under a voluntary agreement.

Joseph Zorzin
Reply to  LdB
November 20, 2021 7:33 am

I wonder how many millions of people will be needed to count all the CO2 emissions? Will that become a new, official trade or profession? People will get PhDs in counting emissions? Write dissertations? What will be their titles? Doctor of Emission Counting? Sheesh, talk about “big brother” and Kafkaesque! Meanwhile, China is busy perfecting its hyper weapons.

Pflashgordon
Reply to  Joseph Zorzin
November 20, 2021 8:34 am

Yes, they are called university “sustainability” officers. They turn over every stone looking for those pesky phantom emissions. They are moving towards creating a “sustainability professional” (i.e., busybody) career. Meanwhile, environmental consulting firms are continually seeking new revenue sources, so they are quickly branching out into GHG accounting, “sustainability” and ESG reporting. I try my best not to hire any firm that pushes these services.

Lrp
Reply to  Pflashgordon
November 20, 2021 2:25 pm

These things are already growing from inside corporations; it’s a cancer

Tom Abbott
Reply to  Pflashgordon
November 20, 2021 4:40 pm

“They are moving towards creating a “sustainability professional” (i.e., busybody)”

Love it!

ATheoK
Reply to  Pflashgordon
November 20, 2021 4:43 pm

university “sustainability” officers.”

“University “sustainability” officers” count nothing nor measure anything.

Others are forced to do the tallies and hand them over Usually from somebody else’s estimates.

Anon
Reply to  LdB
November 20, 2021 1:45 pm

Given that they use every loophole and accounting trick in the book to reduce their tax liability, is anyone surprised? (lol)

In the upcoming years we will no doubt see headlines like:

”America’s top corporations have smaller carbon footprints than the average middleclass American family.”

Last edited 9 days ago by Anon
Hasbeen
Reply to  LdB
November 20, 2021 5:53 pm

It seems to me that they want emissions counted twice.

If companies have to count emissions generated in the production of the things they buy, that is recounting the emissions of the company who manufactured the product in the first place.

David Elstrom
November 20, 2021 6:33 am

But CO2 is plant food, not a pollutant. If all the human energy spent on hype, caterwauling, and control were directed to useful causes—say feeding/housing the poor—just imagine the good that might get done. But sadly, the war on plant food occupies the 100% of the energy of its hegemonic proponents.

bonbon
November 20, 2021 6:38 am

Published in time for FLOP26, but DEAL should ask for their money back.
It is amusing watching peer reviewed reports falling flat on their faces after the Glasgow Fiasco.

¨…it seems unlikely that voluntary guidelines alone can bring about more accurate disclosures in the future,” says author Christian Stoll, a Marc Carney wannabee, who uses much more eloquent language, such as ruthless, relentless, focused, not very marketable in Munich, what?

Joseph Zorzin
Reply to  bonbon
November 20, 2021 7:35 am

“Glasgow Disappointed, But It Inched the World Forward on Climate”
https://e360.yale.edu/features/glasgow-disappointed-but-it-inched-the-world-forward-on-climate

“The UN climate agreement reached in Glasgow fell far short of what scientists say is needed, angering activists and many delegates. But the pact achieved progress, agreeing to toughen emissions targets by next year and to compensate developing nations for “loss and damage.””

duh! The Ivy League has spoken!

bonbon
Reply to  Joseph Zorzin
November 20, 2021 8:28 am

‘I am deeply sorry’: Alok Sharma fights back tears as watered-down Cop26 deal agreed

https://www.youtube.com/watch?v=HLmaumUTqVE
Question is, for whom could he not deliver? I wager Marc Carney and the City of London. The tears may mean he knows what they intend to do now…

For once the Grauniad title is quite funny!

Last edited 9 days ago by bonbon
fretslider
Reply to  bonbon
November 20, 2021 9:49 am

Sharma is now blaming the tears on too little sleep

Alok Sharma says he got emotional at Cop 26 summit finale after barely sleeping for three days
https://www.independent.co.uk/climate-change/news/alok-sharma-cop26-deal-sleep-b1957428.html

You know how it is, all those partays….

ATheoK
Reply to  Joseph Zorzin
November 20, 2021 4:47 pm

Inched the World Forward on Climate”

They didn’t even micrometered one micron forward.

Joseph Zorzin
November 20, 2021 7:28 am

“For policy makers and the private sector to set targets for reduced greenhouse gas emissions, it is important to know how much CO2 companies are actually emitting.”

While we’re busy counting CO2 molecules, China is busy planning to dominate the world- they must be laughing very hard watching us count these molecules.

Steve Case
November 20, 2021 7:34 am

Rules for Radicals:

Rule #4 “Make the enemy live up to its own book of rules.”

Oldseadog
November 20, 2021 8:15 am

Since CO2 has little or no effect on the climate, who cares where it comes from or how it is counted?
I suppose the paper has kept some of the otherwise unemployable TUM research people off the streets for a while, though, so not all bad.

DMacKenzie
November 20, 2021 8:36 am

Most companies think they can be “net zero” by paying for premium wind-generated electricity for their lights and computers…forgetting about heating their building, the tanks of liquid oxygen in the back yard, the cardboard in the dumpster, the heat to melt the metal in the recycle bin, employees driving to work, little things like that, which the carbon revenuers add in…

guest
November 20, 2021 9:00 am

Why wouldn’t this lead to double counting? A mining company’s emissions from its own direct activities is also part of the emissions of the value chain of the user of the mined ore.

AndyHce
Reply to  guest
November 20, 2021 11:44 am

As with “income”, who cares is the revenuer: how much tax can be extracted. Of course they want to know at each step so the tax can be applied at each step, over and over again on the same product as it moves along.

If there should be a reduction some day, OMG we need a new tax to offset the lost revenue!

Reply to  guest
November 20, 2021 3:33 pm

Exactly so! Consider a shipping company. It collects iron ore at a port and transfers it to another port.

On your definitions, “ Scope 1 refers to direct emissions from a company’s own activities, scope 2 refers to emissions from the production of purchased energy, and scope 3 to emissions from activities along the value chain, in other words all emissions from raw material extraction to the use of the end product.” 

So its scope 1 emissions include the fuel used in transporting the cargo, the food and wages of the crew, and the energy expended in loading and discharging the cargo.

Its scope 2 emissions include the energy expended in drilling for the oil used as its fuel, the production of the drilling rig, the refining of the oil and the production of the refinery. And how can these items be apportioned amongst the other users of the drilling rig and refinery?

Its scope 3 emissions include all the above, plus all the emissions of the users of the iron ore and the resultant conversion to steel and manufactured steel products. Cars, bicycles, tanks, guns, aircraft (steel is used in the tools needed to create the planes) – the list is near infinite!

Scope 1 is calculable. Scope 2 is estimable. It is not possible to even take a rough guess at the scope 3, which includes all scope 1 and scope 2. And the end user’s scope 2 includes all the shipping companies scope 1 and scope 2. Talk about fairies at the bottom of the garden!!

By comparison, calculating a Valued Added Tax (VAT or GST depending on local nomenclature) is child’s play.

fretslider
November 20, 2021 9:06 am

Companies in the digital technology industry are significantly underreporting the greenhouse gas emissions”

The tech giants are largely US based, right? Then they may escape the fines that accompanied another emissions underreport…. Dieselgate.

bonbon
Reply to  fretslider
November 20, 2021 11:34 pm

Curiously dieselgate was about Bosch digital technology – ECM firmware…
As Ed Snowden repeatedly warned the NSA does industrial espionage on demand. It is not rocket science to expect the entire board of management mobiles of auto firms to be fully tapped when the Chancellor herself said it is all new to me when her mobile was tapped.
The story of a test run is for the birds….

Last edited 8 days ago by bonbon
Felix
November 20, 2021 9:12 am

In other words, they aren’t reporting enough emissions to scare the public as much as the alarmunists want, so they must be wrong.

Wharfplank
November 20, 2021 9:15 am

I’d like to see the monthly electric bills of all Google (alphabet) office and server installations around the globe.

fretslider
Reply to  Wharfplank
November 20, 2021 9:22 am

Probably worse than BTC mining….

AndyHce
Reply to  Wharfplank
November 20, 2021 11:55 am

About 30 years ago I was doing some work for a large company that produced aggregates (sand and gravel) as well as cement and paving materials. While talking to the clerk in charge of monetary disbursements about some aspect of my small invoice, I saw an outgoing check to some oil company for this company’s monthly purchase of the heavy oil from which they made asphalt. It was just short of one million bucks. That put a somewhat different shine on my considerations of how much the company cared about the small details of how I charged them for what.

Cam
Reply to  Wharfplank
November 20, 2021 5:42 pm

I use Ecosia. The searches fund tree planting around the world and their renewable energy infrastructure produces twice the power required to run their operations.

Pflashgordon
November 20, 2021 9:42 am

In the US, except for certain major sources (e.g., power plants), greenhouse gas reporting is voluntary, a part of corporate ESG green washing. The dominant sources of emissions are combustion, and chasing down other insignificant sources is doubly a waste of effort. The premise of this article is that it is a sin to omit minor contributions and that, therefore, the “solution” is to create a government regulation (bureaucracy, sub-industry) requiring reporting of all sources, all for no useful result. I say, ABSOLUTELY NOT!

It is evident that, for all of the “sustainability” handwringing over “sustainable coffee,” cow flatulence, locavorism, phantom loads, short showers, trayless dining, costly and unreliable wind and solar, melting ice, ad infinitum, ad nauseam, the only means to achieve major reductions in emissions (as if we really care) is to reduce combustion. That means fuel switching, transitioning to gas and ultimately to some form of nuclear power. Were it not for the political agendas and power-driven influences that are distorting energy policy through the false climate change narrative, these changes would take place naturally over many decades without the pain and suffering being inflicted upon us all, rich and poor.

So it is plain to see that the “green” goal is disruption and massive depopulation making all of the world’s past wars pale in comparison. The plain goal of the banks, investors, and wealthy elites is to amass power and privilege for themselves at the cost of poverty, misery and loss of liberty to the masses. The goal of the useful pawns (e.g., Oreske, Mann, Hayhoe, the media, etc.) is to somehow gain favor of the powerful so as to not be cast out into the darkness with the rest of humanity.

Ed Zuiderwijk
November 20, 2021 10:05 am

Correction. ‘peer approved’. Not ‘peer reviewed’.

4E Douglas
November 20, 2021 11:12 am

I heard this on a radio broadcast but have been unable to find it elsewhere.
That server farm consumption
of electric power equals that of the now gone aluminum industry in the Pacific NW.

Lrp
November 20, 2021 2:16 pm

Australia is a carbon sink and Klaasen is another puffed up virtue signaling and overplayed moron

Waza
November 20, 2021 2:23 pm

Neo-marxists always need an issue where there is a villain and a victim.
The issue is irrelevant.
An important objective is not muddying the waters who is the victim and who is the villain.
The manufacturers Germans, Swiss, Japanese and Koreans would love the energy producers to be the villains while the resource nations Australia Middle East would love the end user to be the villain.

What ever you do don’t make the victim the villain.

But it’s all really stupid.
Unicorn farts are dangerous.
We need to punish people who use unicorn farts.
But first we must count how many unicorn farts each person uses.

Russell
November 20, 2021 6:23 pm

I can’t wait for these numbers to be “normalized” by number of customers like they do with countries and their populations. You know, COP folks scold Oz with bad per-capita emissions but they stroke China where total emissions are huge.
And why do I have a bad feeling about the word “harmonizing” – a bit like “homogenizing”?

TonyG
November 20, 2021 6:36 pm

Who is surprised by this?

Peta of Newark
November 21, 2021 3:31 am

Here’s a brainache for y’all, data-miners especially

Just exactly How Much Energy goes into making LSI (computer) chips
It’s not at all easy finding any up-to-date actual figures

Maybe why that is, is that everyone thinks about the melting, refining and physical processing of the silicon material itself.
What you will find out is that that is trivial. Even tho Silicon melts at near white hot heat, the amounts involved are next-to-nothing

The real energy consumption at fabs making large chips is in the air filtration – keeping the Clean Rooms ‘clean – and figures for that are near impossible to find

Maybe some sort of ‘trade secret’ among the manufacturers of Clean Room Cleaning Equipment and associated stuff?
From what little I’ve discovered so far about the energy involved, I think I can understand their recalcitrance. (green) heads really would explode

LSI= Large Scale Integration

Last edited 8 days ago by Peta of Newark
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