By Ira Srivastava
1. Artificial intelligence is preventing Google from reaching climate targets. According to Google’s 2024 environmental report, the company’s emissions were 48% higher in 2023 than they were in 2019. The report cites the energy consumption of its data centres as the reason for this and specifically mentions the boom in AI development and usage. Google’s long standing target of net-zero emissions by 2030 is in jeopardy due to artificial intelligence, with the company admitting that “as we further integrate AI into our products, reducing emissions may be challenging”. Chatbots such as ChatGPT consume up to 33 times more electricity than a traditional search engine for a single query. While most of Google’s data centres in Europe, North America, and South America run mainly on clean energy, those in Australia, the Middle East, and Asia do not. Digital carbon footprints have long been overlooked, but companies will want to ensure that their AI implementation does not interfere with their decarbonization.
2. More than 400 companies have adopted the TNFD. Since the release of the Taskforce on Nature-related Financial Disclosures’ recommendations last June, 416 organizations have adopted their recommendations. There has also been an increase of 30% between January and June of 2024. The market value of the public companies combined is more than US$6 trillion, and the 114 banks who have adopted the TNFD standards have nearly US$16 trillion in assets under management. This coupled with the fact that jurisdictions around the world are integrating TNFD frameworks into domestic disclosure requirements shows that countries and organizations are eager to act on nature and biodiversity issues.
3. Deloitte’s Road to Net-Zero report. Here are some key findings from Deloitte’s report on how the finance sector is decarbonizing:
- Firms with ambitious targets see greater innovation, engagement, and perseverance to achieve that goal
- 75% of respondents placed responsibility for delivering net-zero commitments on the CEO, showing the importance of setting the tone from the top. Strong board oversight and management is key to implementing sustainability strategies
- Two years ago, 31% of firms surveyed had a Chief Sustainability Officer. This year, that figure crossed 70%
- Firms are focusing on new opportunities. 25% of firms shared that they launched new services for fossil fuel, transportation, and real estate customers
- 97% of respondents did not feel confident in their ability to evaluate a customer’s climate risk. This is a significant risk management skills gap for firms to close. Read the full report here.
4. Sustainability in the Spotlight. A collaborative effort between the Diligent Institute and Spencer Stuart surveyed 801 board members from companies around the world. Here are some key takeaways:
- 96% of respondents expect a consistent or greater focus on ESG by 2029
- Human sustainability and diversity was the greatest sustainability issue for 63% of respondents
- 66% of board members shared that their companies remained committed to ESG regardless of backlash
- 62% of companies are improving disclosure practices in the wake of ESG regulation
Read the full report here.
5. Denmark sets an agricultural emission tax. Carbon pricing mechanisms are in place in many parts of the world, however Denmark is making history with its newest carbon tax. The Danish government has approved the world’s first carbon tax on agriculture and livestock emissions. The tax will be implemented in 2030 with annual increases until 2035. The money made from this new tax will be invested into the agriculture industry’s net-zero transition. Denmark’s Taxation Minister, Jeppe Bruus, hopes that “other countries will be inspired by this”. The rate is proposed to begin at 300 Danish crowns — approximately US$43 — per ton of carbon emissions. Impacted farmers will receive tax deductions and subsidies to offset these costs.
Ira Srivastava is Competent Boards’ Program Coordinator. Follow Competent Boards on LinkedIn.