The growing use of digital services is now affecting the global evolution of energy consumption and greenhouse gas (GHG) emissions. Between 2013 and 2017, the sector’s energy consumption grew by 50% <a class="footnoteLink" href="#footnote-1"><a class="footnoteLink" href="#footnote-1">[1]</a></a>, now representing between 6% and 10% of the world's carbon-intensive electricity consumption<a class="footnoteLink" href="#footnote-2"><a class="footnoteLink" href="#footnote-2">[2]</a></a>. Data centers are essential links in the digital value chain for data use and storage and are growing in an exponential way <a class="footnoteLink" href="#footnote-3"><a class="footnoteLink" href="#footnote-3">[3]</a></a>. However, the servers that make up these centers require a significant amount of electricity to operate. <a class="footnoteLink" href="#footnote-4"><a class="footnoteLink" href="#footnote-4">[4]</a></a> Their manufacture also requires a high consumption of raw materials with numerous environmental impacts. As digital giants, do the hyperscalers, Amazon, Google and Microsoft take these environmental issues into account? How can we understand and analyze their communication on climate?&nbsp;&nbsp;Historically hosted in the companies’ headquarters that use them (on premise solutions), data centers have been pooled by dedicated operators to whom companies and organizations now rent computing power and storage space.The specificity of cloud services, compared to ‘traditional’ data center digital services, is the ability of client organizations to apparently free themselves from physical server needs. To put it simply, we can distinguish between:<ul><li>on-premise data centers, where the servers are owned by their users,</li><li>traditional data centers for which customers rent physical machines that are dedicated to them,</li><li>cloud data centers.</li></ul>In the cloud, the machines in the different sites of the same operator are shared. The operator &nbsp;optimizes its physical machines by exploiting them to their full capacity. Customers’ uses are not attached to identified physical machines but are based on virtual machines allowing a greater variety in the range of services from which the uses of the Cloud benefit.&nbsp;Customers pay for their service on a per-use basis, which provides them flexibility and prevents them from having to anticipate their needs. These advantages explain the popularity of cloud services, which should continue in the coming years.

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Annual evolution of data center energy consumption in the European Union (projection between 2019 and 2025)[5] [TWh/year].

As the cloud grows and becomes dominant in the growing digital data management market, it is important to understand whether cloud providers are controlling the carbon footprint of their services and contributing to the goal of global carbon neutrality.The three largest cloud providers, which are also known as hyperscalers due to their size and growth, are: AWS, Azure, and Google Cloud <a class="footnoteLink" href="#footnote-6">[6]</a>. Are the communication and strategy of these companies on climate issues relevant to the objective of keeping global warming below 2°C?<h3>‘Net Zero’ objectives create the illusion of a carbon neutral company concept persist&nbsp;</h3>The first observation is that the three parent companies of the cloud providers analyzed communicate widely on "net zero" objectives, over various time horizons. More generally, this climate communication strategy (based on the achievement of immediate or future carbon neutrality by an individual company) is used by many firms However, these statements reflect realities that are more or less relevant regarding the climate crisis.&nbsp;<ul><li>Google, renamed Alphabet in 2015, has considered itself carbon neutral (for all its activities) since 2007<a class="footnoteLink" href="#footnote-7">[7]</a>, thanks to the purchase of carbon credits for its operational emissions <a class="footnoteLink" href="#footnote-8">[8]</a>. It recently decided to extend this objective to its entire carbon footprint by 2030, considering the upstream and downstream emissions of its operations.</li><li>Through The Climate Pledge, Amazon wants to reach the ‘Net-Zero Carbon’ goal by 2040 <a class="footnoteLink" href="#footnote-10">[10]</a>. This objective would correspond to removing from the atmosphere, in 2040, as much GHG as the company has emitted in the year.</li><li>Microsoft is committed to being ‘carbon negative’ <a class="footnoteLink" href="#footnote-12">[12]</a>, i.e. removing more carbon than it emits <a class="footnoteLink" href="#footnote-13">[13]</a>.</li></ul><figure class="image"><img src="https://carbone4.com/files/Cloudgraphs04.png"></figure>The terms ‘neutrality’, ‘net zero’ and ‘carbon negative’ suggest that if a company generates as many emissions as it absorbs, it simply cancels its carbon footprint, as if the greenhouse gas emissions linked to its activity had disappeared. That amounts to considering that the activity of these companies no longer contributes to the acceleration of the climate shift, and therefore that all climate impacts and transition risks have disappeared. Unfortunately, this view has no scientific basis and does not support climate action.From a scientific point of view, carbon neutrality cannot be defined at a company level <a class="footnoteLink" href="#footnote-14">[14]</a>, and even less at a product or service level. Only on a global scale can the balance of physical carbon flows (in emission and absorption) be observed, resulting in a stabilization of the atmospheric concentration of GHG.&nbsp; In practice, it is impossible to transcribe this global objective to the scale of a company by a simple set of additions and subtractions.Therefore, with the help of several dozens of partner companies, Carbone 4 has steered the development of the <a href="https://www.carbone4.com/projet-nzi">Net Zero Initiative framework</a>, which enables a company or organization to understand how to maximize its contribution to achieving global carbon neutrality. Sequestered carbon is obviously taken into account, but it is considered to be non-fungible with induced emissions.Thus, Microsoft, Alphabet or Amazon cannot be carbon neutral, even less carbon negative, regardless of the organizational or operational perimeter. Nevertheless, they can - and should - contribute to global carbon neutrality, in several ways.Behind the neutrality objectives, the three parent companies have decided to act on increasing carbon sinks:&nbsp;<ul><li>By purchasing carbon credits: in 2020, Google purchased 1.2 MtCO2e of carbon credits <a class="footnoteLink" href="#footnote-15">[15]</a>. Since the beginning of the fiscal year, Microsoft has contracted for nearly 1.5 MtCO2e <a class="footnoteLink" href="#footnote-16">[16]</a>.</li><li>Or by financing non-labeled projects like Amazon, which has committed $10 million to help forest owners sequester CO2 <a class="footnoteLink" href="#footnote-17">[17]</a>.</li></ul>To achieve global carbon neutrality, the development of sequestration will be essential. Thus, the three cloud giants are putting resources, of varying degrees of importance, into what the <a href="https://www.carbone4.com/projet-nzi">Net Zero Initiative</a> has called ‘increasing carbon sinks’, or Pillar C. However, contributing to global neutrality also requires acting very strongly on the other two pillars, which aim towards the reduction of global emissions.<figure class="image"><img src="https://carbone4.com/files/Cloudgraphs005.png"></figure>The company must first reduce its own direct and indirect emissions (pillar A), then help others reduce their emissions (pillar B). The second category corresponds to the sale of decarbonizing products and solutions (i.e., those that reduce - in absolute terms - the emissions of customers) and, under certain conditions, the financing of low-carbon projects outside the firm’s value chain.&nbsp;However, for the time being, the efforts undertaken by Google, Amazon and Microsoft do not lead to a sustainable reduction of their emissions in absolute terms <a class="footnoteLink" href="#footnote-18">[18]</a> (pillar A), and these companies have not published a convincing demonstration of the reduction of their customers' emissions, also in absolute terms, thanks to the services provided (pillar B).As a first step, it would be necessary for these companies to develop and implement an ambitious action plan to reduce their emissions in absolute terms. Currently, their reduction strategy is based mainly on the use of renewable energy.<h3>Reduction targets are mainly based on low carbon electricity, which is obscuring the range of possibilities</h3>At both the parent company and cloud service provider levels, electricity procurement is a major issue for Alphabet, Amazon, and Microsoft. Indeed, data centers require a lot of energy to run the servers and to cool them. Naturally, these three companies are seeking to use low-carbon and renewable energy sources (RE) to cover their own consumption <a class="footnoteLink" href="#footnote-19">[19]</a>.Three methods are traditionally used to claim the use of renewable electricity to power the company's operational activities:<ul><li>the purchase of RE Guarantees of Origin (GO) via a market system</li><li>financing additional RE capacity via a long-term contract (Power Purchase Agreement - PPA) with a producer of RE electricity (without necessarily having a physical link between the financing company and the location of the new capacity)</li><li>the creation of its own renewable energy production fleet.</li></ul>In the first two cases, the company continues to be supplied by the same physical network as before. Therefore, it contractually claims to be purchasing low-carbon electricity, but physically, the CO2 emissions associated with its consumption actually depend on the electricity mix of the network that supplies its facilities <a class="footnoteLink" href="#footnote-20">[20]</a>.Although cloud providers are among the main buyers of "renewable" electricity, such claims are not grounded in any real physical basis.

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Purchase of certified renewable electricity in 2020 from the 3 hyperscalers (own fleet, PPA and GO combined)[21] [GWh]

To purchase these volumes of electricity labeled as renewable, the 3 players are increasingly resorting to PPAs <a class="footnoteLink" href="#footnote-22">[22]</a>, which allow them to develop additional renewable energy production capacities. However, there is no guarantee of spatial and temporal consistency <a class="footnoteLink" href="#footnote-23">[23]</a> between the green electricity purchased and the electricity consumed by the infrastructure. There is no guarantee that these additional RE capacities will systematically replace fossil fuel capacities. It can be added to fossil fuel capacities or replace other low-carbon capacities.Moreover, market-based reporting <a class="footnoteLink" href="#footnote-24">[24]</a> allows Amazon, Alphabet and Microsoft to reduce their scope 2 emissions by ‘neutralizing’ the emissions of the kWh consumed <a class="footnoteLink" href="#footnote-25">[25]</a>. It is no longer necessary to monitor energy consumption and to activate energy efficiency and sobriety levers to reduce emissions. The need to reduce energy consumption cannot simply be concealed by a methodological trick that is based on the same scientifically flawed reasoning as ‘neutrality’ in terms of emissions. These companies have even more reasons to work on the efficiency of their energy use since it represents a major cost item for them.

Google’s carbon-free electricityBy 2030, Google wants to be (contractually) supplied with carbon-free electricity 24/7 to cover its own consumption. Google defines ‘carbon-free’ as follows: ‘We define carbon-free power as any type of electricity generation that does not directly emit carbon dioxide. This includes renewables like solar, wind, geothermal, hydro and biomass, as well as nuclear power.’ However, these means of production emit GHGs, whether at the time of their construction, their installation, or their end of life. Rigorous accounting must consider the emissions induced by renewable energies. This makes it possible to really measure the physical impact of energy use. For instance, in 2019, Google's electricity consumption was approximately 12 TWh <a class="footnoteLink" href="#footnote-26">[26]</a>. Even if this electricity were to come from 100% solar photovoltaic energy <a class="footnoteLink" href="#footnote-27">[27]</a> via installations physically connected to Google's servers, which is not the case, this consumption would represent 530 ktCO2e, or roughly the emissions of a country like the Seychelles in 2016.

Furthermore, by focusing on their direct electricity consumption, these players forget a significant part of their carbon footprint: the manufacturing and operation of the equipment that is necessary for the service to be provided. Servers are necessary of course, but not sufficient. Indeed, there is no cloud service without an Internet network (which must be built and powered), without terminals (connected screens, computers, smartphones) at the customer's locations.However, few cloud players publish figures for these other items that are essential for the system to work, which by construction prevents them from thinking more globally about its role. Just by limiting themselves to their own fleet of machines, these companies could communicate on their progress concerning the extension of the life of servers, reconditioning or reuse, limiting redundancy, R&amp;D projects with server manufacturers...Finally, it seems that these companies above all consider their contribution to carbon neutrality via the financing of external projects concerning electricity or the development of forests, rather than through an in-depth transformation of their activity and their organization.Regardless of their potential need to reduce energy, raw material and resource consumption, cloud providers claim that the cloud is inherently more efficient than traditional solutions. But is this really the case?&nbsp;<h3>A supposedly better carbon performance of the cloud</h3>The three firms studied rely on several publications <a class="footnoteLink" href="#footnote-28">[28]</a>,<a class="footnoteLink" href="#footnote-29">[29]</a>,<a class="footnoteLink" href="#footnote-30">[30]</a> to justify that, for a comparable use, the use of their cloud platforms emits less than the use of on premise servers, i.e. hosted within the companies. The arguments put forward are the following:&nbsp;<ul><li>By sharing machines, hyperscalers use them almost constantly at their maximum capacity. However, in the on-premise reference situation, the servers are used much more frequently under their nominal capacity. The cloud would therefore lead to a material savings (fewer machines needed for the same requirement) and energy savings (because the machines do not necessarily consume much more if they are working at full capacity).</li></ul><figure class="image"><img src="https://carbone4.com/files/Cloudgraphs07.png"></figure><ul><li>Specialized in data center management, the three cloud giants claim to manage the energy consumption of their infrastructure more efficiently than on-premise solutions. In fact, they display the lowest PUE (Power Usage Effectiveness, which compares the total energy consumption of the data center to the energy consumption of the servers only) in the market. Especially Google, which was the first to post a record PUE of 1.1<a class="footnoteLink" href="#footnote-31">[31]</a>.</li><li>They use more renewable energies to power their servers (this point having been discussed above, we will not discuss it further here).</li></ul>While the arguments of cloud providers are based in reality, they are not sufficient to conclude that moving to the cloud necessarily leads to a lower digital carbon footprint in absolute terms:<ul><li>The use of the cloud creates a rebound effect: by paying a posteriori according to usage, cloud customers are under the impression of having unlimited capacity while no longer having as much control over their data consumption as they no longer manage capacity a priori. More generally, the cloud is as much a response to firms’ digital strategy, which is based on a strong inflation of processed data, as it is a response to limit the impact of this inflation.</li><li>Redundancy on the cloud is probably more important than in traditional solutions. This redundancy is partly driven by cloud providers who want to improve the quality of their services.</li></ul>In order to meet their customers' expectations in terms of controlling their emissions, cloud providers are making information available - as well as visualization platforms - that allow their customers’ to understand some of&nbsp;the greenhouse gas emissions of the services used. Not only do the coverage and calculation methodologies vary greatly from one player to another, but above all they lack overall relevance because they are based on a partial coverage and/or use an inappropriate emission factor (market-based, see above) for the electricity used.

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Coverage of carbon footprint measuring tools provided by the 3 cloud operators (situation in December 2021)

Google Cloud and Azure (Microsoft) offer tools for (partially) managing the carbon footprint of their services. For example, they give or will soon give their customers the possibility to choose the location of their servers according to the carbon intensity of the local electricity. Microsoft allows its customers to schedule the startup and shutdown of their machines. Google Cloud, via an application called Active Assist, identifies underused modules to help customers optimize their resources.&nbsp;Amazon's, Microsoft's, and Google's purchases of labeled renewable energy and energy efficiency efforts will not be enough to reduce emissions from their operations. To be aligned with the Paris Agreement, these companies should be leaders in creating a new business model that does not encourage overconsumption of resources. This approach would be part of a new global strategic positioning to contribute to global neutrality. However, their customers also have a role to play to implement sufficiency measures, in an effort to bring their digital carbon footprint in line with a 5% annual decrease in global emissions.

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France Strategy, 2020, Controlling digital consumption: technological progress is not enough. Energy consumption concerns consumption during the use phase and consumption linked to the production of equipment and infrastructure. This scope is defined in the document: On global electricity usage of communication technology: trends to 2030 Anders S. G. Andrae and Thomas Elder, April 30, 2015.

<a href="https://lejournal.cnrs.fr/articles/numerique-le-grand-gachis-energetique">https://lejournal.cnrs.fr/articles/numerique-le-grand-gachis-energetique</a> | This electricity consumption only concerns the operation of the appliances. To this, it is possible to add the energy consumption for the manufacture of the latter.

Anders S.G. Andrae, 2020, New perspectives on internet electricity use in 2030.

Servers require electricity both to power them and to maintain them in a temperature-controlled environment.

Edge data centers, which are not covered by this article, are small intermediate data centers between the user and the data centers, which limit the load on the networks.

AWS (Amazon Web Services) is a service of Amazon and has a 32% market share, Azure a service of Microsoft (20% market share) and Google Cloud a service of Alphabet (10% market share).

<a href="https://sustainability.google/intl/fr/commitments/carbon/#leading-at-google">https://sustainability.google/intl/fr/commitments/carbon/#leading-at-google</a>

Scope 1 and 2 as well as the part of Scope 3 concerning employee travel and telecommuting.

In principle, this new scope should cover a significant part of scope 3, but perhaps not all of it: will the carbon footprint of the excess activity generated by advertising on Google be taken into account?

<a href="https://www.aboutamazon.com/news/sustainability/we-are-all-in-on-the-climate-pledge-net-zero-carbon-by-2040">https://www.aboutamazon.com/news/sustainability/we-are-all-in-on-the-climate-pledge-net-zero-carbon-by-2040</a>

Scope 1, 2 and 3 (does not include the use of non-Amazon branded e-commerce products).

<a href="https://news.microsoft.com/fr-fr/2020/07/21/empreinte-carbone-negative-2030-microsoft-transform-to-net-zero/">https://news.microsoft.com/fr-fr/2020/07/21/empreinte-carbone-negative-2030-microsoft-transform-to-net-zero/</a>

ADEME shared this view: https://presse.ademe.fr/2022/02/lademe-publie-un-avis-dexperts-sur-lutilisation-de-largument-de-neutralite-carbone-dans-les-communications.html

Google, 2021, Environmental Report.

Microsoft, March 2022, "Microsoft Carbon Removal.

<a href="https://sustainability.aboutamazon.com/about/the-climate-pledge/nature-based-solutions">https://sustainability.aboutamazon.com/about/the-climate-pledge/nature-based-solutions</a>

The extra-financial reporting of these companies is often market-based (i.e., it does not take into account the physical reality of the emissions associated with electricity, see definition below) and/or has sometimes changed its methodology, which makes it difficult to analyze the reduction dynamics.

This electricity consumption does not cover the energy needs of the networks and terminals of the digital system.

<a href="https://www.carbone4.com/files/Publication_Electricite_verte.pdf">https://www.carbone4.com/files/Publication_Electricite_verte.pdf</a>

Amazon sustainability 2020 report, Alphabet FY2020 Envrionmental Indicators assurance letter, Microsoft 2021 Environmental Sustainability Report.

Google has for the past 10 years been among the top buyers of APPs globally. Amazon and Microsoft are also in the top 10 buyers of APPs over the past few years.

The means of electricity production can be located thousands of kilometers from the place of consumption or produce electricity in the middle of the day for consumption at night. The energy produced is therefore not physically linked to the energy consumed.

Market-based reporting combines electricity consumption with the emissions factor of the energy purchased on the market (via GOs, PPAs or via the supplier's mix). Location-based reporting, on the other hand, is based on the emission factor of the network to which the company is physically connected.

In the NZI benchmark, PPA purchases are valued as a financial contribution to the emission reduction of others, in this case the electricity grid (pillar B).

Google, 2020, Environmental Report.

Photovoltaic panel manufactured in China: 44gCO2e/kWh according to ADEME .

Microsoft, 2020, “The carbon benefits of cloud computing”.

Google, 2012, “Energy-efficiency in the cloud”.

AWS, 2021, «&nbsp;Saving Energy in Europe by Using Amazon Web Services”.

<a href="https://www.google.com/about/datacenters/efficiency/">https://www.google.com/about/datacenters/efficiency/</a>

Cloud carbon footprint: Do Amazon, Microsoft and Google have their head in the clouds?

With the development of ever more powerful computers and smartphones, the multiplication of connected devices in our offices and homes, and the promises of Artificial Intelligence and 5G, digital technologies have us ever more dreaming of a "dematerialized" economy, freed from the physical limits of the real world.However, the digital sector is becoming increasingly resource-hungry, and not just in terms of fossil fuels. Dependent on raw materials such as copper, gold and lithium, digital technologies also rely on much lesser-known metals such as indium, tantalum and gallium to manufacture the equipment that enables it to exist (computers and smartphones, but also transmission networks and data centers).In this analysis, we explore the question of the sector's resource consumption. More specifically: are there any raw material supply risks for the digital sector ? While we don't expect to come up against geological constraints (i.e., "emptying the reserves") in the next 10 years, other issues are likely to restrict access to the raw materials on which the digital sector depends: competing uses, geopolitical risks, environmental and social risks, and the illusion of recycling.<h3>Context: the strong growth of the digital sector</h3>The digital sector alone accounted for 4% of global greenhouse gas emissions in 2019. With strong growth, the digital sector's carbon footprint could increase 60% by 2040<a class="footnoteLink" href="#footnote-1"><a class="footnoteLink" href="#footnote-1">[1]</a></a>. It also accounts for 4.2% of primary energy consumption and 0.2% of water consumption worldwide<a class="footnoteLink" href="#footnote-2">[2]</a>.But the environmental impact of digital technologies is not limited to greenhouse gas emissions or water consumption. The industry is &nbsp;also dependent on a growing number of critical resources.&nbsp;On average, a smartphone is made up of 50 to 70 chemical elements<a class="footnoteLink" href="#footnote-3">[3]</a>, used in minute quantities for highly precise and complex applications. These elements are essential to achieve the record performances and costs seen today in tech.

Demand has increased not only in volume - but also in diversity

The digital sector contributes to the exponential consumption of raw materials in our economy - particularly that of metals. Between 1980 and 2008, global demand for metals almost doubled (87% increase)<a class="footnoteLink" href="#footnote-4"><a class="footnoteLink" href="#footnote-4">[4]</a></a>. Demand has increased not only in volume - but also in diversity, as shown in Figure 1, which traces the increase in the number of metals used with successive technological evolutions. Between 1980 and 2010, the number of metals used was multiplied by 6, mainly due to the ICT (Information &amp; Communication Technologies) industry. By 2050, to meet projected demand, the quantity of metals required could represent 3 to 10 times current production volumes. This would mean producing more metal over the next 35 years than we have produced since Ancient history<a class="footnoteLink" href="#footnote-5"><a class="footnoteLink" href="#footnote-5">[5]</a></a>.

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Figure 1 - Illustration of the increase in the number of metals used according to technological evolution.

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Figure 2 - iPhone 6 Composition (in grams)

Faced with this exponential consumption of raw materials, isn't the digital sector at risk of tensions over the raw materials on which it depends ? We explore this question in this article, focusing on a few critical raw materials for the digital sector, and the risks they face (economic, technological, supply, geopolitical, and environmental).<h3>Five critical raw materials for the digital sector</h3>Let's take a closer look at five critical raw materials for the digital industry : indium, gallium, tantalum, neodymium and germanium. By cross-referencing several studies (Bureau de recherches géologiques et minières - BRGM, European Commission, France Stratégie, etc.<a class="footnoteLink" href="#footnote-6">[6]</a>), these five elements stand out as critical for the digital sector, as they are at the crossroads of two factors :<ul><li>Demand : the use of these materials is essential if digital technology is to perform at current technological standards and costs. Alternatives to these materials would, for the most part, increase the production costs of digital equipment.</li><li>Supply : they face supply vulnerabilities, even though they are used almost exclusively in digital applications.</li></ul>

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Figure 3 - What is a "critical" raw material for the digital industry ?

<h4>Essential uses for the digital sector</h4>In terms of demand, our studied raw materials have a very specific use in user terminals. Although they are present in minute quantities - representing less than 100 mg<a class="footnoteLink" href="#footnote-7">[7]</a> of the total weight of a conventional smartphone - they enable high levels of performance to be achieved, both in terms of quality and cost. They are therefore poorly substitutable, as they have no equivalent in terms of cost and/or quality.&nbsp;

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Figure 4 - Use of critical raw materials in digital applications and examples of other uses

Figure 3 gives an overview of the five raw materials and their use in the digital sector. Indium, for example, used in the form of tin-doped indium oxide, enables the quality of touch screens and LCDs we have today. Zinc or tin oxides are possible substitutes, but they do not deliver the same performance<a class="footnoteLink" href="#footnote-8">[8]</a>. This is a material with which we interact on a daily basis, without realizing the complexity of its value chain and its environmental impacts (detailed later in this article).Furthermore, these five raw materials are used almost exclusively in the digital sector - which conditions and sizes their demand (the sector accounts for between 30 and 95% of their consumption)<a class="footnoteLink" href="#footnote-9">[9]</a>. With the frantic race to bring out the latest models and the increase in screen size (e.g.: at 31 cm in 2010, the average diagonal of flatscreen TVs is set to increase to 65 inches in 2025<a class="footnoteLink" href="#footnote-10">[10]</a>), the trend shows no sign of slowing down.<h4>Raw materials subject to supply tensions&nbsp;</h4>The value chains for these metals are complex, especially because of the way mining projects operate. These projects span decades and include several phases : mineral exploration to find exploitable reserves, extraction, refining, and manufacturing stages. Our five raw materials face several supply tensions :<ul><li>Co-products or by-products : Like most mining resources, these materials are co- or by-products, substances that are not present in sufficient quantities in the earth's crust to justify mining on their own. Their production therefore depends on the production of other metals. There is no such thing as a mine dedicated to a single material. Only a few main substances, such as copper, iron or zinc, can justify a mine. The existence of co- or by-products ensures economic profitability. For example, indium is produced during the zinc refining stage. However, zinc refineries also depend on other co-products to achieve economic profitability. The mining industry is therefore linked to multiple markets, making them all interdependent. Producing more indium means producing more zinc and co-products, and finding markets for each.</li><li>Production monopoly : The refining of these materials is almost entirely concentrated in China (in 2022, China produced 58% of the world's indium, 98% of gallium and 70% of rare-earth elements)<a class="footnoteLink" href="#footnote-11">[11]</a>. This Chinese monopoly makes our five raw materials vulnerable to geopolitical tensions. It should be noted that China's share of global production of these materials has been partly reduced as a result of the US protectionism implemented by the Trump administration against Chinese products, particularly for rare-earth elements<a class="footnoteLink" href="#footnote-12">[12]</a>.</li><li>Strong social and environmental impacts : In addition to GHG emissions, extraction and refining have a strong impact on environmental and human health. Open-pit mining alters the landscape, the soil and the local hydrological regime. Ore extraction and element separation generate chemical effluents (cyanide, arsenic, lead, sulfates, mercury, etc.)<a class="footnoteLink" href="#footnote-13">[13]</a>,<a class="footnoteLink" href="#footnote-14">[14]</a>. In addition to these materials, which are harmful to biodiversity and human health, the production of digital raw materials generates a colossal quantity of inert waste, resulting from the crushing of rocks<a class="footnoteLink" href="#footnote-15">[15]</a>. As we cross more planetary boundaries, how long will we accept these harmful impacts, which are accelerating with the increased consumption of these raw materials ? Raw materials are therefore subject to transition risks as well<a class="footnoteLink" href="#footnote-16">[16]</a>. This also applies to social issues. A non-negligible proportion of the supply comes from illegal child labor operations<a class="footnoteLink" href="#footnote-17">[17]</a>. In the Democratic Republic of Congo, one of the main producers of Tantalum, armed conflicts over the exploitation of natural resources have been raging for 20 years. How much longer will we accept this exploitation ?</li><li>Virtually zero recycling : Finally, in the face of these raw material supply challenges, recycling is no panacea either. Today, these raw materials are neither recycled nor recyclable. Their end-of-life recycling rates are below 1%<a class="footnoteLink" href="#footnote-18">[18]</a>. The minute, mixed quantities used in terminals prevent efficient recycling methods at viable economic costs. This difficulty in recycling terminals also comes with its share of environmental and social consequences. Some of this digital waste ends up in landfills on the other side of the world. The Agbogbloshie e-waste dump in Ghana is one of the largest in the world<a class="footnoteLink" href="#footnote-19">[19]</a>.</li></ul>

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Figure 5 – Critical aspects of the value chains

<h4>Sufficiency&nbsp;as a means of action</h4>The current digital consumption model seems unlikely to be sustainable, given the nature of the tensions on raw materials. According to CISCO, the number of terminals connected to an IP address will be three times greater than the world's population in 2023<a class="footnoteLink" href="#footnote-20">[20]</a>. Structural changes will have to be considered to mitigate the sector's impact. With this in mind, several solutions can be considered, starting with user terminals:&nbsp;<ul><li>Influencing demand : Promote rational screen consumption (restrain the increase in the number of screens per person), promote longer lifespans, increase the operational life of applications and software, and encourage the use of refurbished devices rather than buying new ones.</li><li>Influencing supply (less resource-hungry) : Design devices with lower performance levels to reduce the material footprint, design devices that promote recycling at end-of-life.</li></ul>Moreover, this desirable sufficiency is not limited to terminals alone. We also need to question the models of other digital components such as data centers and network infrastructures (deployment of 5G across an entire territory, programmed obsolescence of 2-3G, growth in the number of data centers, etc.).&nbsp;Beyond questioning supply risks, digital technology must stop representing an ideal of conspicuous consumption, which hides the physical and geological realities. This is the paradox of the sector: the promise of digitalization as a means of optimizing other sectors of activity comes up against a lack of awareness of the unsustainable materiality of digital technology.&nbsp;

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Arcep, Pour un numérique soutenable, <a href="https://www.arcep.fr/la-regulation/grands-dossiers-thematiques-transverses/lempreinte-environnementale-du-numerique.html">https://www.arcep.fr/la-regulation/grands-dossiers-thematiques-transverses/lempreinte-environnementale-du-numerique.html</a>, 2020

GreenIT, Empreinte environnementale du numérique mondiale, <a href="https://www.greenit.fr/empreinte-environnementale-du-numerique-mondial/">https://www.greenit.fr/empreinte-environnementale-du-numerique-mondial/</a>

SystExt, Des métaux dans mon smartphone ?, <a href="https://www.systext.org/node/1724">https://www.systext.org/node/1724</a>, 2017

SystExt, Les métaux de la révolution 4.0, <a href="https://www.systext.org/node/1568">https://www.systext.org/node/1568</a>, 2019

Olivier Vidal. Impact de différents scénarios énergétiques sur les matières premières et leur disponibilité future. Annales des mines - Série Responsabilité et environnement, 2020, N°99 (3), pp.19-23. ff10.3917/re1.099.0019ff. ffhal-03426222f

Commission européenne, Critical Raw Materials for Strategic Technologies and Sectors in the E: A Foresight Study; France Stratégie, La consommation de métaux du numérique : un secteur loin d’être dématérialisé, 2020 ; Commission européenne, Critical Raw Materials and the Circular Economy, 2018; ONU, Digital economy growth and mineral resources:&nbsp; Implications for Developing Countries, 2020&nbsp;; The Shift Project, Lean ICT - Pour une sobriété numérique, 2018

Senate, 100 millions de téléphones portables usagés&nbsp;: l’urgence d’une stratégie, 2016

BRGM, L’indium (In) – éléments de criticité, <a href="https://www.mineralinfo.fr/sites/default/files/documents/2020-12/fichecriticiteindium170921.pdf">https://www.mineralinfo.fr/sites/default/files/documents/2020-12/fichecriticiteindium170921.pdf</a>, 2017

<a href="https://lelementarium.fr/">https://lelementarium.fr/</a>

USGS, Mineral Commodity Summaries 2023, <a href="https://pubs.usgs.gov/periodicals/mcs2023/mcs2023.pdf">https://pubs.usgs.gov/periodicals/mcs2023/mcs2023.pdf</a>

Jacques Delors Institute, Le protectionnisme assumé des Etats-Unis, <a href="https://institutdelors.eu/publications/le-protectionnisme-assume-des-etats-unis/">https://institutdelors.eu/publications/le-protectionnisme-assume-des-etats-unis/</a>, 2020

Ademe, Terres rares, énergies renouvelables et stockage d’énergies, <a href="https://librairie.ademe.fr/energies-renouvelables-reseaux-et-stockage/492-terres-rares-energies-renouvelables-et-stockage-d-energies.html">https://librairie.ademe.fr/energies-renouvelables-reseaux-et-stockage/492-terres-rares-energies-renouvelables-et-stockage-d-energies.html</a>, 2020

Environmental Law Alliance Worldwide, Guide pour l’évaluation des EIE de projets miniers, <a href="https://www.elaw.org/files/mining-eia-guidebook/Full%20French%20Guidebook.pdf">https://www.elaw.org/files/mining-eia-guidebook/Full%20French%20Guidebook.pdf</a>, 2010

Of the quantities of material extracted, the proportion recovered in equipment represents a small percentage. As an example, the production of a 300g smartphone requires the extraction of 220kg of material. (source: ADEME, Modélisation et évaluation des impacts environnementaux des produits de consommation et biens d'équipement, 2018). This ratio of 1/7 (220/300) is what is commonly referred to as the "ecological rucksack" or "hidden footprint" of an object, in this case the smartphone.

Transition risks for an organization are defined as "the financial consequences for the company of transforming the economy towards a low-carbon world. To comply with the Paris agreements, organizations must effectively reduce their greenhouse gas emissions. The consequence of this reduction is to call into question their initial business model by putting the decarbonization of their value chain at the heart of their strategy". (<a href="https://www.carbone4.com/article-2types-risques-climatiques">https://www.carbone4.com/article-2types-risques-climatiques</a>); In the case of raw materials, a high environmental impact can be seen as a risk to their long-term use, in a world that is keen to limit the extent to which planetary limits are exceeded.

Le Monde, En finir ou pas avec les supplices du Tantale, <a href="https://www.lemonde.fr/afrique/article/2017/03/25/en-finir-ou-pas-avec-les-supplices-du-tantale_5100708_3212.html">https://www.lemonde.fr/afrique/article/2017/03/25/en-finir-ou-pas-avec-les-supplices-du-tantale_5100708_3212.html</a>, 2017

UNEP, Recycling rates of metal. A status report, 2011

Franceinfo, La décharge de déchets électroniques d’Agbogbloshie, véritable défi économique et environnemental pour le Ghana, <a href="https://www.francetvinfo.fr/monde/afrique/societe-africaine/la-decharge-de-dechets-electroniques-dagbogbloshie-veritable-defi-economique-et-environnemental-pour-le-ghana_3863287.html">https://www.francetvinfo.fr/monde/afrique/societe-africaine/la-decharge-de-dechets-electroniques-dagbogbloshie-veritable-defi-economique-et-environnemental-pour-le-ghana_3863287.html</a>

CISCO, Annual Internet Report (2018-2023), 2020

Materials of the dematerialized:  are there raw material supply risks for companies in the digital sector ?

The European Union is stepping up its efforts on environmental reporting with its new Corporate Sustainability Reporting Directive (CSRD). Adopted at the end of 2022, this demanding regulation will come into force in 2024, with the first reporting due at the beginning of 2025 for concerned companies<a href="https://www.carbone4.com/en/article-csrd-who-is-affected">, as we mentioned in our first article on the subject.</a>In this article, Carbone 4 takes a closer look at the regulation, to help you make sense of it and understand the benefits of following the CSRD. In particular<ul><li>What is the CSRD?</li><li>What does the CSRD require? Particularly when it comes to the climate!</li><li>What do companies need to do to prepare? What's in it for them?</li></ul>&nbsp;While many companies haven’t waited for regulations to come into force to communicate on their environmental strategy, this new legal obligation will make reporting an unavoidable requirement.&nbsp;<h3>Background: What is the CSRD? Why does it exist?</h3>The CSRD requires companies to share information on their risks, opportunities and impacts on various environmental (climate, biodiversity, water, etc.) and social (employees, workers in the value chain) issues.&nbsp;Compared with previous regulations <a class="footnoteLink" href="#footnote-1">[1]</a>, the CSRD concerns a larger number of companies, and requires more detailed and comprehensive reporting: it specifies precise information and indicators to be disclosed, on a larger number of subjects.&nbsp;The first objective of the CSRD is to help external stakeholders (notably investors, but also customers and the general public) gain a clearer understanding of the risks faced by companies, and to compare companies with each other in terms of their vulnerability and readiness for the transition. This information enables investors to protect themselves against the risk of <a href="https://www.lse.ac.uk/granthaminstitute/explainers/what-are-stranded-assets/">"stranded assets".</a>&nbsp;The CSRD also aims to create a more environmentally-virtuous economy. By requesting information on the environmental impact of companies, the regulation aims to create favorable conditions for good performers (i.e. companies that are less emissive and more compatible with a low-carbon world - or prepared to be). It should, in reverse, complicate conditions for low performers, for example through more costly access to capital or debt. &nbsp;In simple terms, the CSRD uses a double materiality approach to :<ul><li>understand the company's impact on planetary limits (e.g. climate, biodiversity, water) and social issues;</li><li>understand and "monetize" the impact of ecological upheavals on the economic sustainability of companies.</li></ul>Another major benefit of CSRD is that it enables companies to better understand their risks and opportunities with regard to environmental and social issues, and thus better prepare for them.&nbsp;&nbsp;<h3>What does the CSRD require? In general and on climate</h3>The CSRD is comprised of 12 standards: the ESRS (European Sustainability Reporting Standard)<a class="footnoteLink" href="#footnote-2">[2]</a>. These include :<ul><li>2 transversal standards (mandatory)</li><li>10 thematic standards on various sustainability topics (conditionally mandatory)</li><li>sector-specific standards (to come) &nbsp;</li></ul>

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CSRD Content: European Sustainability Reporting Standards (ESRS)

All companies subject to the CSRD must report on the two mandatory cross-functional topics, and must identify which of the 10 thematic topics they are concerned with. To do this, companies are asked to identify the double materiality of each of the 10 topics on their business: i.e. whether they have an impact on the topic, and/or whether it is likely to have a financial impact on the company. It should be noted that, for the climate topic, companies must justify their finding of non-materiality. &nbsp;

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If we zoom in on the climate topic, the CSRD asks companies to understand and report on their governance, strategy, risks and opportunities, and metrics in the face of climate change. These rigorous demands are an opportunity for any economic player to ask themselves vital questions. What is the company’s relevance and likelihood of durability in a world already facing the physical impacts of climate change; and within a society seeking to rapidly mitigate its environmental impact to maintain a habitable world.&nbsp;An overview of the important information requested by the CSRD on climate is presented below. &nbsp;

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The content of the CSRD is largely inspired by the philosophy of the TCFD <a class="footnoteLink" href="#footnote-3">[3]</a> and incorporates best practices for defining a climate strategy, on which Carbone 4 has relied for many years to support its corporate clients. Europe has sought to harmonize reporting requirements to a large extent with existing standards, including the TCFD but also the ISSB <a class="footnoteLink" href="#footnote-4">[4]</a>. The main difference lies not in content, but in the dual materiality approach: the ISSB recommends an analysis of simple materiality (i.e., financial materiality).&nbsp;<h3>How to prepare?&nbsp;</h3>To respond to the CSRD on climate, companies need to :&nbsp;<ul><li>Better understand their current impact and dependence on greenhouse gas emissions, by carrying out a carbon footprint,</li><li>Understand how <a href="https://www.carbone4.com/en/publication-strategy-scenario-analysis">to adapt their business model </a>for a low-carbon world, by projecting themselves into trajectories that limit temperature rise to 2°C, and</li><li>Identify their physical risks and adaptation needs in the face of current and future climate change.</li></ul>&nbsp;While the CSRD requires transparency, and guides reflection on the definition of a climate strategy, the relevance, ambition and success of this strategy depends heavily on the level of engagement within the company. Responding to the CSRD is therefore not just another extra-financial reporting gesture, but an opportunity to re-define one's strategy in the face of climate change, rallying management teams, in-house climate experts, as well as operational teams trained on these issues.&nbsp;The CSRD can therefore be seen either as an additional constraint for economic players (and therefore an additional transition risk), or as a fantastic tool to improve the relevance of their corporate strategy and make it compatible with a low-carbon world. &nbsp;

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NFRD, Non-Financial Reporting Directive, adoptée en 2018.

The CSRD is the framework directive that obliges companies to report, and the ESRS are the standards that define the 'what', i.e. what to report.

Task Force on Climate-related Disclosure

International Sustainability Standards Board

The CSRD: an opportunity to build a robust environmental strategy

Helene is senior manager at Carbone 4 since january 2018 and co-leader of the Climate performance practice which supports stakeholders in defining, implementing and promoting ambitious and enforceable policies to reduce greenhouse gas emissions.She contributes to develop and convey our 8 fields of expertise to our clients and prospects. She aims at supporting Carbone 4’s clients so they take the best strategic decisions for the pursuance and the resilience of their activities in a 2°C world path. She participates in the definition of Carbone 4’s strategy and its translation into operational execution and seeks to transform business opportunities into actual projects.Helene started her career in metal industry, implementing Quality, Safety and Environment Management systems, before consulting for a major car manufacturer, helping it improve the organization of its engineering and design core business unit. Then she ran for Assystem its nuclear business unit for the Paris area, until she became in charge of energy-transition strategies for the engineering firm.&nbsp;

Hélène Chauviré

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