Extreme weather is on the rise, and tech companies are increasingly feeling the impact. Early this year, Samsung was forced to shut down operations at its chip factory in Texas because of a historic winter storm, leading to $348 million in financial losses. Moreover, droughts, fires, and snowstorms are contributing to a global chip shortage, which has created a supply chain bottleneck for the tech industry.
East Asia has experienced a historic year for extreme weather, with record-setting floods in China and Olympic athletes collapsing amid heat waves in Tokyo. But while the internet sector is often seen as the industry of the future, the region’s biggest tech giants have made insufficient progress in responding to the crisis.
Across East Asia, the tech industry is in large part powered by fossil fuels, including coal, oil and gas, from chip manufacturing to the operation of data centers. As the industry grows, emissions have soared. In South Korea, the technology sector accounted for more than 5 percent of national greenhouse gas emissions in 2019, higher than Norway’s total emissions. Likewise, electricity consumption from China’s internet data centers and 5G is on track to nearly triple by 2035, with more than 60 percent of the electricity that powers China’s data centers generated from coal.
To date, only a handful of tech companies in East Asia have taken advantage of growing opportunities to utilize wind and solar energy, including on-site renewable energy generation, direct investment in large-scale solar and wind projects, and power purchase agreements between tech companies and electricity generators. Several companies, including Yahoo Japan and Chindata Group, have pledged to achieve 100 percent renewable energy within the decade, though they have yet to publicly issue the same commitment across their supply chains.
When tech companies work to increase their own renewable energy use, the impact can extend to government policy as well. In March 2020, members of RE100, including Panasonic, Sony, and Fujitsu, petitioned the Japanese government to increase its 2030 renewable energy capacity target. Likewise, Tencent CEO Pony Ma recently requested that China’s government remove barriers to corporate renewable energy procurement and encourage investment in large-scale renewable energy projects.
National climate pledges also act as an incentive for tech companies to increase their renewable energy use. Last fall much anticipation surrounded announcements from China, South Korea, and Japan that the three countries would achieve carbon neutrality by mid-century (2060 in China, 2050 in South Korea and Japan). But success in meeting these targets is far from guaranteed, and the commitments require follow-through on every level of society, including by private companies.
Potential financial losses that tech companies face due to climate change represent only a sliver of the crisis that looms before us. According to the latest report by the Intergovernmental Panel on Climate Change (IPCC), global heating of 1.5 C could occur within just 20 years, and sea levels are likely to rise by 1 meter within the next century. If companies like Samsung, Toshiba, and Alibaba are truly looking toward the future, they must lead the charge to reduce emissions, by leaving fossil fuels behind and committing to achieve 100 percent renewable energy across the supply chain by 2030.