Apple: A Thousand Trees
On average a single iPhone contains 63 grams of mind material, 17% aluminium, 16% stainless steel, and 12% glass [1]. All three materials are mined and extracted from the earth which causes trapped carbon dioxide (CO2) to be released from the sub-surface of the earth. However, in order for miners to reach these materials, they require additional equipment that are heavily depend on energy which are contributing to the CO2 emissions as well. Furthermore, the main source of energy that is used in the extraction process is produced from fossil resources which in itself is a large contributor to emissions of CO2 that is increasing the carbon footprint [2]. Mineral mining is extremely sensitive to climate change since its fully reliant on the availability of natural resources. Change in climate could cause the cost of operations and excavations to rise given the increase in the unpredictability of the weather conditions such as droughts, storms, earthquakes, and rising sea levels that could cause severe damage to the deep mines, which will further limit the availability of mineral resources and increase the operational and safety costs to mine [2]. Therefore, as it gets harder and more expensive to mine for minerals due to the aforementioned reasons I believe Apple’s supply chain cost will rise as the carbon footprint increases, which will then have an impact on the company’s profitability. Furthermore, as more and more people become aware of the effects that climate change could have on their hometowns and life in general, Apple becomes more susceptible to criticism and blame, which could jeopardize their reputation and therefore the demand from retailers could decrease.
Apple’s plan
So far Apples total carbon footprint is 29.5 million metric tons of greenhouse gas emissions, with the lead contributor being manufacturing with a share of 77% of Apples total carbon footprint due to the large amounts of power needed during the manufacturing process [3].
Apple broke down the manufacturing carbon footprint to five main sources: 35% integrated circuits, 29% aluminium, 13% boards and flexes, 5% display, and 4% glass. Two of the five contributors are mined minerals [3].
In the past year Apple has committed itself to various efforts that will reduce its carbon footprint around the world in an effort to fight climate change and maintain its positive reputation. Apple has focused on four areas to reduce its carbon foot print [3]:
Manufacturing
Previously Apple limited itself from utilizing scrap aluminium. However, Apple has redesigned its production process to incorporate scrap aluminium, which caused a reduction in the use of aluminium [3].
Bonds
Apple has issued 1.5 billion dollars in green bonds, which are used to finance green projects that support the development of renewable resources [3].
Suppliers
According to Apple environment reports, 14 suppliers have committed to 100% renewable resources when producing apple products. The suppliers’ commitment should add 4 gigawatts of clean energy generation to the total power generation capacity in the world. However, that milestone is only halfway through and apple expects to meet that target within the next three years [4].
Facilities
Apple aims to power all its plants and buildings with 100% renewable energy and use the excess capacity to produce clean energy that will be distributed to the communities around its facilities. Apple is also in the middle of constructing the largest LEED platinum certified building that will be the home of 16000 trees [3].
Recommendation
Although apple has gone through great efforts to fight climate change, it pains me that there is no evidence that they have gone further down the supply chain to the suppliers of the raw materials (the miners) to ensure that they are imposing the same rules and regulations that would also help reduce the carbon footprint overall. Apple has taken the first step by controlling its actions, however a company as large as Apple can do much more. I recommend that apple puts a team from its end on the mining sight to ensure that the mining process is as clean as it can be at this stage. However, in the long term I recommend that apple builds a training facilities in the rural areas to educate the miners and mining companies about climate change. I would also recommend that apple rewards suppliers that mine using renewable resources by paying a higher price for their products, which is aimed to encourage miners to invest in clean energy equipment or to provide them with the clean energy equipment need to conduct the excavation process.
While Apple is incentivised to change its behaviour to protect its reputation, households especially the ones living in areas where energy is heavily subsidised do not see an added benefit or cost cuts. Is it possible that those people switch to clean energy regardless of the cost?
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Sources
| [1] | Apple, “Environmental Report,” 9 2016. [Online]. Available: https://images.apple.com/environment/pdf/products/iphone/iPhone_7_PER_sept2016.pdf.
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| [2] | adelphi, “Climate Change and mining,” adelphi, 6 2016. [Online]. Available: https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0ahUKEwjfn6m8oqPXAhUS_KQKHaRjClYQFggoMAA&url=https%3A%2F%2Fwww.climate-diplomacy.org%2Ffile%2F2366%2Fdownload%3Ftoken%3DpNCxjxXU&usg=AOvVaw0xt-WVsyzEplFSbJNtlM7-. [Accessed 3 11 2017].
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| [3] |
Apple, “Climate Change,” 2 2017. [Online]. Available: https://www.apple.com/environment/climate-change/. [Accessed 3 11 2017].
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| [4] | Apple, “Apple Supplier Clean Energy Program,” 4 2017. [Online]. Available: https://images.apple.com/environment/pdf/Apple_Supplier_Clean_Energy_Program_Update_October_2017.pdf. [Accessed 11 2017]. |
It is very interesting to see a complete supply chain view of Apple’s impact on climate change. Through the companies self-published environmental report and their often touted goal of powering all the facilities with 100% renewable energy, I had a relatively positive view of their environmental impact. I agree that the extraction of raw materials specifically for Apply products should be factored into their environmental impact but I question how you track and manage that through a supply chain as distributed as Apple’s. In general, I would not expect Apply to have a direct relationship with the raw materials providers working through at least one other manufacturing partner. However, given their size in the market they could start to apply pressure to create this change. To your suggestion of paying a premium for sustainable mining I’m curious if you think end consumers would be willing to carry the cost of that premium, perhaps as a special edition “carbon neutral” iPhone that consumers could purchase at a slightly higher cost.
I agree with AA about the fact that, giving its size and influence in the market, Apple could further increase its efforts to mitigate climate change risk. First of all, as AA mentioned, Apple could work more closely with its suppliers and monitor them to address areas such as manufacturing impact and responsible sourcing. Beyond auditing, Apple could further reduce its collective supply chain footprint by building suppliers’ capability to minimize their environmental impact and sharing best practices for reducing energy consumption and emissions. To extend its impact, Apple could also incentivize suppliers to cascade the information down to their own suppliers. The Partnership for a Cleaner Environment (PACE) program [1] led by Ford Motor can be a good example for Apple.
On another hand, Apple could also leverage 3D printing to reduce its environmental footprint. By combining materials into a product one layer at a time instead of reducing an initial rough shape to the desired dimensions, 3D printing enables more efficient manufacturing process. As a result, only the material needed is used to produce the final product, hence avoiding a lot of waste. Finally, Apple could also design more eco-friendly products with minimalist designs, prioritizing locally sourced materials and increase the use of recycled materials.
[1] Ford Motor Company, 2016/17 Sustainability Report, p.40
Great post! You brought up an interesting point: since Apply heavily rely on the co-manufacturers in foreign counties with different regulations, how can they manage their suppliers’ practice on CO2 footprint and other environmental issues. I think it will be challenges to engage suppliers to share the same level of responsibility, given that the majority of the suppliers are located in emerging countries where the regulation is less strict. Also, who will pay the practice is questionable.
I guess anther thing to do for Apply is to spend more efforts to recycle the unused phone. Now Apple launches new products twice a year. Consumers upgrade the phones more frequently than before. To recycle the used phone can reduce the waste.