Is there something dirty in your cloud?

The huge shift to remote storage may be powered by dirty energy.

By Wall St. Cheat Sheet Apr 20, 2012 2:11PM

Image: Clouds in a blue sky (© Purestock/Getty Images)Tech-savvy users are adding more and more data to remote online storage every day. But what else are they putting into the cloud? A lot of smoke and grime from non-green fuel, according to a new Greenpeace report.


The report, "How Clean is Your Cloud?", ranked Apple (AAPL) and Amazon (AMZN) among the worst of 14 companies in categories that included energy efficiency and infrastructure, but also in their unwillingness to publicly disclose energy data or talk about plans to improve it.


The report said Apple's iCloud service didn't rely enough on clean sources of electricity. Amazon and Twitter received even worse overall grades. Hewlett-Packard (HPQ), IBM (IBM), and Oracle (ORCL) were among other bad performers, while Google (GOOG), Dell (DELL), Yahoo (YHOO), and Facebook were the best performers.


Public image is becoming an increasingly important factor for major corporations these days, especially in the hyper-competitive world of technology. Last year, Apple faced scrutiny and threats of a consumer boycott following reports of malpractice and labor exploitation at its Chinese manufacturing factories. In March, after an independent audit found proof of unfair working conditions, the company announced immediately that it would work on changing its systems.


For a company like Apple, image is everything, so it should come as no surprise the tech giant was quick to react to the latest environmental report. "They are very brand-conscious companies," Gary Cook, the lead author of the Greenpeace report, told New York Times. "They want to be presenting themselves as responsible and innovative."


Apple said the figures Greenpeace used in its analysis were incorrect, but the independent environment protection organization said Apple had been given the opportunity to provide the right figures and did not.


Apple was faulted largely for its apparent lack of effort to use renewable sources of energy to power its data centers. The report estimated that the company got about 55% of its electricity via coal, with its main data center in Maiden, N.C., receiving most of its power from Duke Energy's (DUK) coal plants. Duke also fought back, saying the majority of its power now comes from cleaner nuclear energy.


Apple added that the Maiden data center only consumes 20 megawatts annually, less than the 100 megawatts that Greenpeace estimated. It also said that plans to power 60% of the center through a solar farm and a biogas fuel cell installation were progressing rapidly.


Apple, set to announce its second-quarter earnings next week, relies heavily on sales of devices that provide user access to the iCloud. Apple is thought to have sold almost 30 million iPhones and 13 million iPads over the last three months.


Amazon's Web Services got two F grades from Greenpeace for transparency and use of renewable energy sources. However, the organization appreciated Google's energy unit, which plans to buy wind power from NextEra Energy (NEE), adding in its report that Google had plans to source 35% of its energy from renewable sources. Greenpeace also appreciated that Google was involved in lobbying for clean energy policies in the country.


Greenpeace's report also praised Yahoo's new data center in upstate New York, which draws on hydro-power, and Facebook's center in Sweden that can run entirely on renewable energy.


In 2010, a Facebook-powered campaign against oil company BP (BP) after the Deepwater Horizon spill had consumers turning away from the company's gas stations. According to one estimate, sales for major BP distributors and retailers fell 10% to 30% early in the crisis. 


Consumer opinion also seems to have moved coffee retailer Starbucks (SBUX), which announced plans on Thursday to stop using insect extract as food coloring after receiving hundreds of petitions.


Even Hollywood has involved itself in campaigns against unethical environmental and labor practices, calling even greater attention to companies' missteps. Actor Ryan Gosling has been advocating for a charity that raises awareness about illegal activities associated with the mining of materials in the Congo used in electronics. The charity, Raise Hope for Congo, names Canon (CAJ) and Panasonic (PC) among the worst in taking action.


In fact, Raise Hope for Congo ranks many major technology companies, placing them each in one of four categories: a gold star for those considered "conflict-free"; green for "on the right track"; yellow for "room for improvement"; and red for "falling behind."


Not a single one of the 21 major technology companies rated by Raise Hope for Congo -- including Research in Motion (RIMM), SanDisk (SNDK), and Motorola (MMI) -- received a gold star. Dell, HP, Intel (INTC), Microsoft (MSFT) and Nokia (NOK) are the only six to be categorized as "on the right track."


Apple falls in the yellow category, which encompasses companies that have "taken some steps to investigate their supply chains, and are members of the industry-wide effort, but more action is required of them."


While Apple has built its reputation on quality products, the more environmentally and socially conscious consumer now threatens the company's dominance. Apple faced mass protests in Europe this week when Greenpeace activists staged an hour-long demonstration on the roof of the company's continental headquarters in Cork, Ireland. The protestors placed signs with letters spelling out the words "clean our cloud" and handed out pamphlets to company employees. Demonstrations were also said to have been held at Apple facilities in Turkey and Luxembourg.


With another public relations nightmare for Apple just as the Foxconn controversy had begun to wane, it's no wonder investors have become cautious. Though Apple shares are still up nearly 46% so far this year, they've actually declined 2.48% in the last month. One wonders when this trend will begin to show itself in sales. Quick action -- like that taken this week by Starbucks -- is necessary if Apple is going to maintain its once-pristine public image, an image that has made Apple products some of the most sought-after in the world.


Aabha Rathee is a writer at Wall St. Cheat Sheet. As of this writing, she did not own a position in any of the aforementioned stocks.


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5Comments
Apr 20, 2012 6:23PM
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Auto makers and consumer groups were not behind the catalytic converter. Or for getting the lead out of gasoline. Unfortunately the government needs to force many things that should be done voluntarily. Like solar water heaters. How many of those do you see on homes? Very few.  I have 1 on my house and love it. Its been there for 20 years. I have told 100's of people how great it is. Only 1 went out and bought one. Hawaii about 1 year ago became the first and only state to make solar water heaters a mandatory building code on all new homes. People would rather spend their money on an entertainment center. Human nature. Being irresponsible is funner than being responsible.
Apr 21, 2012 4:27PM
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What bothers me about the article is the reliance on Greenpeace and their data without questioning them or the legitimacy of their data.  For example, why did they claim that 100 megawatts was used by Apple in their Maiden data center?  Did this make this number?

Greenpeace is notorious for fabricating data and making false claims to bolster their views.  It would be nice if the author did a little more investigative reporting on the validity of Greenpeace's claims, and then take them to task for errors or invented numbers.

 

I am a big advocate of alternative energy and recycling and like articles like this that call attention to the problem.  However, I am also skeptical of certain advocay groups that attack with a suspicious agenda.

 

As to government versus private development.  A major independent study showed that in the US about half of the major innovations came from government supported research and development; half came from private industry.  I believe the study looked at 50 or more years.

 

If government was so bad, why are the Chinese spending hundeds of billions in R&D support while Western countries are crying foul.  If government involvement was so bad, then the private companies should be happy that the Chinese are wasting their money.  Instead, many experts predict that the Chinese will soon surpass us in many key areas of supercomputing and biotechnology.   Steve Jobs and Bill Gates show us what private industry can accomplish, while the auto industry and the 2008 recession show us how incompetent private industry can be.

 

Apr 22, 2012 1:14AM
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How many people even know what energy is? The market will not figure out the energy/fuel problem because the market is composed of "consumers" who don't know what energy is.
Apr 22, 2012 5:56PM
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and im supposed to care what greenpeace thinks  why?
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This is where the cleaning up of the environment is meant to come from - the consumer.   The Gov't should keep their noses out of it.  Let the market and the entrepreneur bring about the changes the consumers desire.  They will accomplish the goals as fast as possible with the available technology and cost the least to bring about.  
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