The problem with Salesforce’s new climate math
The opinions expressed here by Trellis expert contributors are their own, not those of Trellis.
AI’s energy use and carbon emissions are a red-hot topic in the climate space these days. The collision between AI and climate goals will be one of the defining corporate challenges of the next decade. And Salesforce — one of tech’s most visible sustainability champions — sits squarely at the center of that tension.
Salesforce has been outspoken about its ESG commitments for years. But as the business capitalizes on the AI revolution, its sustainability program will continue to contend with the environmental side effects of AI. The evolving strategy, highlighted recently in the Chasing Net Zero series, captures a broader question facing every company today: Can climate progress keep pace with technological disruption?
Just three years ago, Salesforce made headlines for entering the carbon credit business, with Christiana Figueres, former UN climate chief, leading the crowd in chants of “Climate neutral now!” at the launch event. In those days, corporate climate goals were borne out of the enthusiasm that companies’ actions and investments could contribute significantly toward reaching the Paris Agreement goal to reduce global emissions by half by 2030 and reach net zero by 2050.
Today, corporate targets and reality are diverging from those goals, not converging. The cracks in the model show up in every sector, from industrials to cosmetics. But the massive impact of energy demand from AI on the tech sectors’ emissions may be the most visible stress test of Paris-aligned reduction frameworks.
Moving the goalposts
As companies reengineer their net zero commitments, a fundamental question emerges: should advocates demand that business adapt to the targets, or accept targets that adapt to the business?
At issue in the case of Salesforce is what might be called the “intensity loophole.” For years, standard-setters have grappled with how to create a framework that leaves room for fast-growing companies whose emissions keep rising in absolute terms. Small, disruptive businesses should be afforded room to grow their emissions, the logic goes, so they have the chance to improve on the status quo — and to unseat high-emitting legacy companies?
In the early days of target-setting, most companies set absolute reduction goals, because intensity targets were seen as lower ambition. But as companies miss their targets, Salesforce and many others have moved the goalposts — either by dropping net zero altogether or by reshaping their targets to fit the business.
Just look at Salesforce’s annual impact synopses. Like most sustainability reports, they offer a blend of high level principles, long range targets and numeric ESG disclosures. The narrative describes a range of activities, but offers concrete numbers on the amount of investment and expected GHG benefits of their initiatives in only a few cases.
This makes it hard to tell if today’s actions will deliver on tomorrow’s promises. Broad concepts such as “business resilience” would carry more weight if paired with concrete data showing how specific mitigation projects are expected to yield emission reductions.
Standard setters have enabled this imprecision. Businesses undertake significant changes such as mergers and product launches much faster than the standards can adapt. Growth and governance operate on different clocks.
Intensity data isn’t a climate metric
To stabilize the climate, total global emissions must decrease. Only by reducing overall emissions can Salesforce and other companies contribute meaningfully to net zero progress. And intensity metrics make it hard to tell whether this is happening.
By adopting an intensity-based approach, Salesforce is using gross profit to normalize its emissions data. Other companies that track GHG intensity use metrics such as revenues, employees, units sold or the number of SKUs. Changes in non-climate metrics can easily create noise in the data. An intensity metric based on gross profit, for example, can improve if a company raises its prices – an action that has no bearing on global greenhouse gas emissions.
The real value of intensity metrics is as a management tool to push teams to deliver more output with less carbon. They can drive efficiency and creativity, but they fall short as a measure of global climate progress.
Risks in the ‘spheres of influence’ era
As the Salesforce profile notes, the company intends to tackle its AI emissions growth by achieving efficiencies in data center contracting and by setting standards and targets for suppliers. This is part of a broader trend across large, complex multinationals. Five years ago, companies were laying out targets to reduce Scope 3 emissions. But today’s supply chains are optimized for costs, not carbon — making Scope 3 emissions a wicked problem. Now, companies are replacing hard targets with intentions to influence their suppliers.
The rise of the “influence era” is evident in Oxford’s new Spheres of Influence framework, which seeks to systematically credit companies for their sway over others. It credits the effects of companies’ products, investments and policy advocacy, which are overlooked by traditional GHG accounting frameworks. The Spheres model is not meant to replace action, but to acknowledge that companies shape climate outcomes well beyond their Scopes 1, 2 and 3.
This shift broadens the definition of corporate climate leadership, but it also tempts companies such as Salesforce to highlight influence over impact — and to narrate progress without funding it. And in the worst cases, when companies exert influence rather than investment, the emissions reductions can be pushed down the supply chain, where the costs land on the world’s most vulnerable workers, who are least able to absorb them.
An unsteady bargain
Pressure from investors, employees and advocates has made companies aware that they are expected to pick up some of the responsibility for achieving net zero by mid-century. The groundswell of target-setting suggested that companies had accepted this responsibility.
The case of Salesforce shows that the bargain with companies is an unsteady one. And the lesson for advocates is clear: Climate targets offer a false sense of security. Far from being firm commitments on the path to net zero, more and more targets seem quaint aspirations. And if they are replaced by intensity-based alternatives, it could mask the uncomfortable truth that absolute emissions are still rising — and net zero is still far away.
The post The problem with Salesforce’s new climate math appeared first on Trellis.