Can the tech sector be the ‘linchpin’ of a green industrial revolution?
With a new report from the International Energy Agency (IEA) claiming that the world is “at the dawn of a new industrial age” focused on green technology, edie explores the challenges the manufacturers, software providers and consumer-facing platforms will need to overcome to help deliver a decarbonised future.
“A new global energy economy is emerging ever more clearly, with the rapid growth of solar, wind, electric vehicles and a range of other technologies such as electrolysers for hydrogen. This transition is in turn changing the industries that supply the materials and products underpinning the energy system, heralding the dawn of a new industrial age – the age of clean energy technology manufacturing.”
That is the opening line of the IEA’s Energy Technology Perspectives 2023. The latest installment in one of the IEA’s flagship series was published on Thursday (12 January) and serves as a global guidebook for the clean technology industries of the future.
The new report notes that industries that were in their infancy in the early 2000s like wind, solar and electric vehicles have “mushroomed” into mainstream manufacturing markets today. This will only be mirrored by other emerging green technology sectors as businesses and nations step up efforts to embrace clean energy, reach net-zero and strengthen energy security.
The IEA claims that the energy world is entering “the age of clean energy technology manufacturing” that can create major new markets worth billions while also creating millions of green jobs. The report finds that the global market for manufactured clean energy technologies will be worth around $650bn annually by 2030 – more than three times greater than current levels. This depends on countries fully implementing current energy and climate pledges.
The report also highlights the many risks facing this new technological and industrial revolution, namely supply chain concentration, rising prices and the need for “healthy collaboration” in order to drive international collaboration between nations and companies.
“The world would benefit from more diversified clean technology supply chains,” the IEA’s executive director Fatih Birol says. “As we have seen with Europe’s reliance on Russian gas, when you depend too much on one company, one country or one trade route – you risk paying a heavy price if there is disruption.
“I’m pleased to see many economies around the world competing today to be leaders in the new energy economy. It’s important, though, that this competition is fair – and that there is a healthy degree of international collaboration, since no country is an energy island and energy transitions will be more costly and slow if countries do not work together.”
One such company striving to be a leader of the green technology revolution is that of software development company Globant.
While turbines, solar panels and EVs are likely to be the poster-children of the new industrial era – one that builds a net-zero economy – it is clear that a more digitalised and electric economy will rely on technology firms revamping their approach to corporate sustainability.
Late last year, Globant hosted an industry roundtable featuring sustainability experts from a range of technology giants, financial institutions and collaborative groups aiming to support green start-ups.
The roundtable focused on how green technology firms can act as an enabler, not just to help with global decarbonisation efforts but to collaborate to ensure that all parts of society feel they are part of the transition.
With a new report from Arup and Oxford Economics finding that a “comprehensive” new definition of what consists of the green economy would enable businesses and policymakers to better act in order to decarbonise while protecting society and the natural environment, with the benefits reaching more than $10trn by 2050, it is clear that this new industrial era will be built on collaboration.
For Globant’s head of sustainable business studio, Elena Morettini, decarbonisation can be delivered at a greater pace, provided the sector can unlock innovation globally by collaborating and supporting exciting new start-ups while leveraging the expertise of incumbent businesses that can finance change.
“For decarbonisation to take place at the speed and scale required, we need to actively commit to operating within a system of start-ups, large organisations/corporates and R&D institutions. It is less about ad hoc collaboration and more about consistently and transparently coordinating with each other to share ideas, learnings, innovations across all sectors globally,” Morettini says.
“The tech sector plays a pivotal role here: we are often the cornerstone providing the technology that underpins the largest companies (and so have access to key decision makers within those businesses) while simultaneously investing in and partnering with cutting edge start-ups and R&D institutions looking to leverage technology to create a more sustainable future.
“Our access to both allows us to connect key stakeholders from both ends of the value chain. The more people we can get together in a room to share and learn from each other, and the more often we can do that – the faster we will achieve this shift in mindset towards consistent, committed collaboration.”
Globant started its Net Zero Roadmap in 2020 and moved to operating with 100% renewable electricity resources as well as becoming carbon neutral. Beyond those targets though, the company is embracing what it calls a “planet-centric design” – a strategic approach to problem-solving, considering the environment, social, and economical equality as the top priority.
The company is part of the Green Software Foundation – a collective of global organisations committed to sharing best practice to create sustainable software to reduce carbon emissions.
But, even as the demand for green technological solutions picks up, there are some common challenges that need to be addressed. During the roundtable, members spoke of a lack of interest and inertia in attempting to address the “scale-up gap” whereby investors are put off by projects and companies that are in their infancy and aren’t yet commercially ready or viable. While participants noted the need to collaborate across green tech sectors to support SMEs that can drive change, examples of this happening are still few and far between.
One key need for the sector is for its solutions to become more resilient. As more green infrastructure comes online, the software is needed to make systems more secure and resilient from the impacts of climate change, which could wipe out billions of pounds of GDP unless resiliency and adaptation is baked into this new green era globally.
This can be implemented in multiple ways, namely through enabling political support and smarter design processes, but also by gathering better quality data and more frequently. The same applies, Morettini argues, to any corporate approach to climate action regardless of the size of the sector. Data collection and management, it seems, will underpin climate action.
“Once organisations understand where their direct and indirect environmental impact is greatest, they can identify and prioritize the best partners to collaborate with to drive forward energy-saving opportunities and effect positive environmental change,” Morettini adds.
“In this way, technology can map collaboration in a way no other sector can – and help larger organisations find the best ways and places to invest in decarbonisation solutions. The tech sector has a responsibility to be the linchpin connecting our global stakeholders, and provide those same stakeholders with the technology they need to measure their environmental impact and where change needs to happen first – and fast.”
As the green software sectors grows it will need to address its own impact while also enabling other sectors to better manage data to uncover decarbonisation opportunities.
Progress is happening, but perhaps not at the pace required.
In September 2022, technology heavyweights Amazon, Meta, Microsoft, Samsung and Sky joined forces with the Carbon Trust to tackle emissions from internet-connected devices.
The group has formed a secretariat – led by the Carbon Trust – to develop an “industry-first” specification for measuring, accounting for and cutting the emissions associated with connected devices while they are being used by customers.
Globally, connected devices – which include any device that can connect to another or a network via the internet – have an annual electricity consumption similar to that of France. This product category includes devices like phones, speakers, laptops and other home appliances, which combined used 500TWh of energy in 2020, according to the International Energy Association.
As the number of these devices increases globally, as well as the demand for data, reducing their energy consumption and greenhouse gas emissions is becoming a key focus for the industry. A device’s ‘use phase’, or the time it spends being used by the consumer, accounts for up to 85% of its total carbon footprint throughout its lifecycle.
But climate action isn’t just shackled to decarbonisation and heavyweights within the industry are constantly accused of blocking greater action to address the climate crisis.
A briefing paper from December 2022, authored by barrister and digital human rights expert Susie Alegre for environmental charity Global Action Plan, accused the world’s biggest tech companies such as Meta, Twitter, Google and TikTok of “standing in the way of effective climate action”.
The report claims that technology giants are systematically exacerbating the climate crisis by driving emissions, driving consumerism, driving division and driving out democracy.
Namely, the technical processes behind advertising on tech platforms are criticised. The report states that an estimated 1% of total energy consumption on this planet is used in the process of serving online ads and that the majority of that energy is wasted. Indeed, Purpose Disruptors recently found that advertising now adds an estimated 32% to the carbon footprint of every person in the UK.
Alegre refers to big tech billionaires as the “oil barons of the 21st century” and that their “impact on climate change is no less destructive”. Glancing across this sprawling green tech sector – ranging from green tech manufacturers, software providers and to the giant, consumer-facing platforms, it is clear that a unified approach to climate action is required.
The Globant roundtable spoke of how software and green tech can contribute to wider decarbonisation, such as reducing travel due to the growth in online meetings, but it remains clear that the sector needs to improve on its efficiency and advocacy. As we approach this new green industrial revolution, technology acts as both an enabler and challenge to embracing a just transition.
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