Apple ESG Report 2023 vs 2022 Breakdown
We spent HOURS digging (even the sidenotes) into the Apple ESG report for 2022 – and we have some questions that leave us wanting more information that we can’t seem to find!
(It makes us doubt Apple’s intent – is the report to come across as a company taking steps to bring change, or are they doing the bare minimum to comply)
First, let’s get some basics covered…
What is ESG?
Environmental, Social, and Governance is the abbreviation for ESG.
It serves as a framework for evaluating and assessing the sustainability and ethical impact of a company or investment by investors, companies, and other stakeholders. Every ESG factor reflects a different facet of a company’s performance and operations:
Environmental aspects
These include things like a company’s carbon emissions, waste management, energy use, and water usage that have an impact on the environment. Additionally, it takes into account the company’s initiatives to conserve resources, advance biodiversity, and lessen climate change.
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Social aspects
Social considerations include things like workplace rules, human rights, diversity and inclusion, product safety, community involvement, and consumer relationships. These elements have an impact on how a company interacts with its customers and the general public. Concerns including supply chain management, social responsibility programmes, and staff well-being are also taken into account.
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Governance aspects
The governance aspect in ESG focuses on the internal structures, practises, and regulations that affect an organization’s decision-making, accountability, and transparency. The board’s makeup, the CEO’s salary, shareholder rights, risk management, and corporate ethics are just a few of the things it takes into account.
Table of contents:
- What is ESG?
- What is an ESG report?
- Why is ESG important?
- Important terminologies in an ESG Report
- Understanding Apple ESG Report 2022 and the missing links?
- Apple’s ESG Report 2023
What is an ESG report?
A sustainability report or corporate social responsibility (CSR) report, also known as an ESG report, is a report that details the environmental, social, and governance (ESG) performance and procedures of a corporation. Companies typically release ESG reports to inform their stakeholders, such as customers, employees, regulators, and the general public.
Format, content, and amount of depth of ESG reports can vary, but they often contain data on the company’s ESG policies, plans, goals, initiatives, performance information, and results. ESG reports frequently contain the following components:
Environmental performance
This section usually discusses how the business affects the environment, including greenhouse gas emissions, energy use, water use, waste management, and environmental risks and opportunities.
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Social performance
This section typically covers the company’s social impact, such as its labour practices, human rights, employee health and safety, diversity and inclusion, community engagement, and social initiatives.
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Governance practices
This section typically covers the company’s governance structure, policies, and practices, including board composition, executive compensation, shareholder rights, risk management, and business ethics.
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Goals and targets
This section may outline the company’s ESG goals, targets, and progress towards achieving them, providing a timeline and measurable indicators to track the company’s sustainability performance over time.
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Reporting frameworks and standards
This section may disclose the frameworks or standards used by the company to guide its ESG reporting, such as the Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), Task Force on Climate-related Financial Disclosures (TCFD), or other relevant industry-specific standards.
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Verification or assurance
Some ESG reports may undergo third-party verification or assurance to enhance their credibility and reliability. This section may provide information about the assurance process and the qualifications of the assurance provider.
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ESG reports are considered important tools for transparency, accountability, and communication of a company’s sustainability performance and practices to its stakeholders. They can help investors and stakeholders assess a company’s ESG performance, understand its sustainability risks and opportunities, and make informed decisions based on its ESG-related interests and priorities.
Why is ESG important?
ESG (Environmental, Social, and Governance) is important for several reasons:
Sustainability
ESG focuses on a company’s long-term sustainability, taking into account its impact on the environment, society, and governance practices. It encourages companies to consider their responsibilities beyond short-term financial gains and make decisions that contribute to a more sustainable and inclusive future.
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Risk Management
ESG factors can help identify and manage risks that can affect a company’s financial performance and reputation. For example, environmental risks such as climate change impacts or social risks such as labour disputes or product safety issues can have significant financial consequences. By integrating ESG considerations into their business strategies, companies can proactively identify and mitigate potential risks, which can help protect their bottom line.
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Stakeholder Expectations
Investors, customers, employees, and other stakeholders are increasingly interested in companies’ ESG performance. They expect companies to operate responsibly, consider social and environmental impacts, and uphold good governance practices. Meeting these expectations can enhance a company’s reputation, attract investment, retain talent, and maintain a positive relationship with stakeholders.
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Business Opportunities
ESG can also present business opportunities. For instance, companies that adopt sustainable practices and innovative solutions can access new markets, develop competitive advantages, and capitalize on emerging trends such as clean energy, circular economy, or social impact investing. ESG considerations can drive innovation, efficiency, and resilience, leading to long-term business success.
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Regulatory Landscape
ESG is increasingly being incorporated into regulatory frameworks around the world. Governments and regulators are introducing regulations and disclosure requirements related to ESG, which can have legal and financial implications for companies. Staying compliant with these regulations is important to avoid potential penalties or reputational damage.
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Ethical and Moral Imperative
ESG reflects ethical and moral considerations, promoting responsible business practices and responsible investment. Many stakeholders, including investors, customers, employees, and communities, expect companies to operate in a socially and environmentally responsible manner that aligns with their values and contributes to a more sustainable and equitable world.
Some important terminology in ESG reports you need to understand
Benchmarking
Comparing and measuring the performance of one entity against others in order to establish a reference point for evaluating progress or setting goals, typically used in the context of sustainability and environmental performance.
Carbon Offsets
Projects or activities that help reduce greenhouse gas (GHG) emissions, such as reforestation or renewable energy projects, are used to compensate for or offset the emissions produced by an individual, organization, or event.
Carbon Footprint
The total amount of greenhouse gases, typically expressed in carbon dioxide equivalent (CO2e), emitted into the atmosphere as a result of human activities, such as burning fossil fuels, manufacturing, and transportation.
CDP
CDP stands for Carbon Disclosure Project – An initiative that collects and shares information from companies about their environmental impacts, risks, and opportunities related to climate change, water security, and deforestation, to drive corporate transparency and action on climate change.
Consolidation
The process of combining or integrating multiple entities or activities into a single entity or activity is often used in the context of reducing redundancies, increasing efficiency, and improving sustainability performance.
CMAP
Climate Management and Accounting Platform – A system or tool that helps organizations measure, manage, and report their greenhouse gas emissions and other environmental data, typically used for tracking and reporting progress towards sustainability goals.
Decarbonisation
The process of reducing or eliminating greenhouse gas emissions, particularly carbon dioxide, from human activities and systems, such as transitioning to renewable energy sources, improving energy efficiency, and reducing reliance on fossil fuels.
Emission Factors
Parameters or coefficients are used to estimate or calculate the number of greenhouse gases emitted into the atmosphere per unit of activity or output, such as per kilometre driven or per ton of production.
Fossil Fuel
A non-renewable energy source formed from the remains of ancient plants and animals, such as coal, oil, and natural gas, which release carbon dioxide when burned and contribute to climate change.
EPA
Environmental Protection Agency – A government agency responsible for regulating and enforcing environmental laws and policies in the United States, including air and water quality, waste management, and climate change mitigation.
ESG
Environmental, Social, and Governance – A framework used to assess and measure the sustainability and ethical performance of companies and investments, taking into account environmental, social, and governance factors, such as climate impact, labour practices, and corporate governance.
Financed Emissions
Greenhouse gas emissions are associated with the investments or financing activities of an individual, organization, or financial institution, such as loans or investments in fossil fuel projects or companies.
Fugitive Emissions
Greenhouse gas emissions are released unintentionally during the extraction, production, transportation, or use of fossil fuels, such as methane leaks from oil and gas operations or coal mine fires.
GHG Sink
A natural or human-made process or system that absorbs or removes greenhouse gases from the atmosphere, such as forests, soils, or carbon capture and storage technologies, helps to mitigate climate change.
GHG Source
An activity or process that releases or emits greenhouse gases into the atmosphere, such as burning fossil fuels, deforestation, or industrial processes, contributes to climate change.
GHG Protocol
Greenhouse Gas Protocol – A widely used accounting and reporting standard for measuring, managing, and reporting greenhouse gas emissions, developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).
Global Warming
The long-term increase in Earth’s average surface temperature due to human activities, such as burning fossil fuels, deforestation, and industrial processes, leads to climate change.
GRI
The Global Reporting Initiative: A global standard for sustainability reporting by organizations.
GWP (Global Warming Potential)
Global Warming Potential: A measure of a greenhouse gas’s impact on climate change.
Kyoto Protocol
An international treaty to reduce greenhouse gas emissions and combat climate change.
IPCC (Intergovernmental Panel on Climate Change)
A scientific body providing assessments on climate change.
ISO 14064
An international standard for greenhouse gas accounting and reporting.
Materiality
The significance of sustainability issues to a company’s financial and operational performance.
Net Zero
Achieving a balance between greenhouse gas emissions produced and emissions removed from the atmosphere.
The Paris Agreement
An international treaty to combat climate change by reducing greenhouse gas emissions.
PCAF – Partnership for Carbon Accounting Financials
A global initiative for standardizing carbon accounting in the financial sector.
SASB – Sustainability Accounting Standards Board
A standard-setting organization for sustainability reporting by companies.
TCFD
Task Force for Climate-Related Financial Disclosures: A framework for disclosing climate-related risks and opportunities by organizations.
Value Chain Emissions
Greenhouse gas emissions are generated throughout the entire lifecycle of a product or service.
VRF (Value Reporting Framework)
A methodology for measuring and reporting the value created by sustainability efforts.
Understanding Apple ESG Report 2022 and the missing links?
1. Apple is carbon neutral for corporate emissions as of April 2020.
A screenshot from the report
❌ Our comment – Apple’s corporate emissions are just 0.52% of its total emissions. It does not include the product footprint!
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2. We retired 167,000 metric tons of carbon credits from the Chyulu Hills project in Kenya to maintain carbon neutrality for our corporate emissions in the fiscal year 2021. This project is certified to the VCS and CCB standards.
A screenshot from the report
❌ – This means they bought the carbon credits and then deducted the same from their footprint. This is like buying change.
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3. For the fiscal year 2021, we retired credits from the Chyulu Hills project in Kenya and purchased carbon credits from two additional projects to offset a total of 500,000 metric tons of direct emissions across our value chain. The first project, a REDD+ coastal conservation project in Guatemala, protects and conserves forests from deforestation and degradation.
A screenshot from the report
❌ – Oh wait so it doesn’t end at the previous one and there’s more?
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4. Because energy efficiency measures have lasting benefits, energy efficiency savings are calculated cumulatively since 2012……We also recognize that energy use at our employees’ homes likely increased during this period. We have not accounted for this energy use, because we anticipated this impact is small relative to our overall energy use and we are still evolving our methodology
A screenshot from the report
❌ – That last line is an easy way out. Wish we kept a count of how many times they used it!
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5. Total does not include construction and demolition waste or electronic waste. We’re refining our methodology for collecting this data and plan to include it in future years. We have also re-stated the total for 2018 without these categories of waste
A screenshot from the report
❌ – Again they are redefining their methodology. Also, they skipped Electronic waste. And Apple makes electronics!
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6. Water used for construction activities like dust control is not included in this total and represents 13 million gallons of water used in the fiscal year 2021
A screenshot from the report
❌ – Isn’t that a big number to not include?
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I am aware of the fact that I could be wrong about many aspects of this Apple ESG report or must have missed things and pardon me for that but from what I understand, I’d be a little sceptical of Apple’s claims from this point onwards.
What is your viewpoint towards Apple’s ESG strategy after reading this?
Apple’s ESG Report 2023
Although some questions still remain and Apple still does not get a clean chit, we all agree that we need to learn ‘HOW TO SHOW IT’ from Apple.
🔻 Watch this video and if you finish it, it means you know everything about its sustainability plan and you didn’t even have to read a report.
This is a good reference point for making sustainability and ESG digestible.
Please watch it till the end!
Apple’s First Carbon Neutral Product and 2030 Commitment
