NEW YORK--(BUSINESS WIRE)--Internet and social networking firms such as Amazon, Baidu and Netflix need to adopt a more strategic approach to energy and carbon management. This is the key conclusion in a new report from independent analyst firm Verdantix. The report, Carbon Strategy Benchmark: Internet Sector, assesses the carbon and energy strategies of the world’s 14 largest internet and social networking firms. Firms covered in the analysis include Chinese players Alibaba, Baidu and Tencent alongside Akamai, Amazon, Apple, eBay, Expedia, Facebook, Google, Netflix, Priceline, Salesforce and Yahoo!.
“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” said Verdantix Director, David Metcalfe. “These include rising energy spend tied to exploding data centre usage, the potential negative impact of energy price volatility on financial results and public criticism of sustainability commitments by groups such as Greenpeace and the Beijing-based Institute of Public and Environmental Affairs. Big data centre users such as Amazon and Salesforce cannot ignore the closing jaws of mandatory carbon reporting indefinitely.”
Carbon reporting laggards like Expedia and China’s Tencent also need to respond to a new challenge: how to use energy and carbon communications to achieve competitive differentiation. The research finds that Akamai, Apple and eBay outpace their global competitors on energy efficiency enhancements and transparent disclosure of carbon emissions. Salesforce is also making positive steps by communicating GHG reductions from cloud services and Google’s recent carbon footprint disclosure confirmed the pressure on the industry to act. By contrast, Amazon has rejected stakeholder requests for increased transparency on GHG emissions.
The Verdantix Carbon Strategy benchmark for the internet and social networking sector exposes a widespread lack of transparency. Only 4 of the 14 firms in the study – Akamai, Apple, eBay and Google – disclose GHG emissions from their data centres on a global basis. None of the 14 global internet giants covered in the analysis invest in assurance from a recognized, independent verifier of GHG emissions data such as DNV, KPMG or PwC. This is despite the fact that the US EPA estimates data centre energy consumption doubled between 2000 and 2006, and the Department of Energy estimates that data centres now consume as much as 3% of total US electricity.
“To remain competitive the world’s largest internet and social networking firms need to keep energy costs under control and protect the brand with transparent carbon communications” commented Janet Lin, Verdantix Senior Manager in New York. “Alibaba and Facebook should deploy energy management software to enhance energy cost control and facilitate GHG reporting. Carbon management laggards should reduce brand risk by paying for assurance of their GHG inventory data. 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 such as Carbon Usage Effectiveness in data centres. Risks from ignoring energy and carbon management will grow over time – not shrink.”
Verdantix is the fastest-growing, independent analyst firm focused on energy, environment and sustainability. Through our global primary research and deep domain expertise we provide our clients with strategic advice, revenue generating services, best practice frameworks, industry connections and competitive advantage. For more information visit: www.verdantix.com.