AI's power boom tests Big Tech's net-zero promises

Camilla Naschert (0:03)

Welcome to Energy Evolution, the podcast by S&P Global Energy explaining the global energy transition.

I'm Camilla Naschert. This week we are returning to our Path to Net Zero series. Longtime listeners may know that that's the Energy Newsroom's annual deep dive into how energy companies are navigating the transition away from carbon. And today we're talking about a new industry's path to Net Zero. In this year's series, we looked at the companies powering the AI boom, so the hyperscalers, the semiconductor makers, and the data center operators who are now among the largest and fastest growing consumers of electricity.

The timing couldn't be more pointed. Just last week at Climate Week in New York, UN Climate Change Executive Secretary Simon Steele delivered some of his sharpest remarks yet on this industry, warning that, and I'm quoting here, energy guzzling artificial intelligence is driving up planet heating pollution from coal, oil and gas, while ratcheting up energy costs for households and businesses. He said AI leaders are, in his words, on thin ice when it comes to their social license to operate. Yet at the same time, these companies are signing some of the largest clean energy contracts in history and making sweeping net zero pledges. That tension is exactly what we're going to dig into today. To do that, our first guest is tech reporter, Stefan Modrich, who has been reporting on the tech sector sustainability commitments for the past net zero series. That meant surveying net zero targets, interviewing industry insiders about what those pledges actually mean in practice. Stefan, welcome to Energy Evolution.

Stefan Modrich (2:01)

Thank you, Milo. It's great to be here.

Camilla Naschert (2:03)

Stefan, can you tell us a bit about the kinds of companies that you surveyed there? What are the biggest names? I don't know if we are all familiar with them. Then obviously, we track scopes one, two, and three when it comes to emissions.

What does that mean in the context of the companies that you tracked?

Stefan Modrich (2:21)

Absolutely. For our story, we surveyed the top 30 information technology companies by MarketCap. There will be a lot of familiar names in there like Apple, Google, Alphabet, Microsoft, and Nvidia.

These are Microsoft, Google, or Oracle. These are what we consider the hyperscalers.

When you're thinking about how does this fit into across Scope 1, 2, and 3, those bigger providers are the ones who are directly using emissions. Then Scope 2 would be purchasing electricity on the grid to power that infrastructure. Then working your way down to Scope 3, that could be things like extracting emissions, even capital goods or waste. These are things that throughout our survey and across the wide range of companies that we spoke with, that all of them are facing unique challenges across the board.

Camilla Naschert (3:22)

Great. When you were doing your survey, what did you find?

Stefan Modrich (3:26)

Sure. The results were very mixed in the sense that a lot of these companies have made progress, and some companies have had very ambitious net zero targets. But at the same time, it's definitely unmistakable that there is an upward trajectory in carbon emissions as the infrastructure buildout for AI has been booming.

A couple of highlights I could point to, Amazon, for example, increased its carbon footprint 16 percent compared to 2025 to 80.8 million metric tons of CO2 emissions equivalent. But at the same time, they matched 100 percent of their electricity consumption with renewable energy for the third straight year. That's, I think, one of the best ways to illustrate the tension that you were referring to in terms of the ambition to maintain net zero targets while at the same time having these rapid infrastructure buildouts take place.

Camilla Naschert (4:18)

Can you tell us a bit about who you spoke to for this story and what they were telling you when it comes to the industry's commitment to renewables? I know you looked into both sort of near term and longer term operational targets. And I think it's fair to say that you also picked up some skepticism from some analysts.

Stefan Modrich (4:38)

Yes. So for my piece, we spoke to experts from RMI and the Science-Based Targets Initiative and both of them. Well, SBTI is widely accepted as sort of the industry standard for setting Net Zero Targets.

And, you know, they emphasized how critical it is that companies act upon their climate goals. Now, SBTI has actually introduced a standard which requires companies with what they classify as rapidly growing electricity demand, which is above a jump of 20% in electricity demand over a given target cycle. It requires them to set the scope to emissions reduction targets.